There is a commonly held misconception among some small businesses that if they invest in training and developing their employees, they will lose them to larger businesses which are hungry for freshly trained talent. That very question is a false prison that has kept small businesses on the wrong side of the productivity curve. The truth is, the more those companies invest in developing their talent, the more likely they are to keep them. According to the ASTD Report 2012 “Bridging the Gap,” 41 per cent of employees in companies that invest little or nothing in training said they are likely to leave within one year. However, that number slipped to 12 per cent for employers who invest significantly in developing their people.
IBM recently did a study to examine the percent of capabilities that companies lose over time. When internal and external turnover, new technology and changes in businesses are factored in, the results are actually quite staggering. The study found that a company loses 10 – 30 per cent of its original capabilities every year. Within three years, each company loses 41 per cent of its staff, and by year six, only 24 per cent are still in place. Any business that doesn’t believe in training, evolving, and moving their people forward is paying a much heavier price than they often realize.
At the same time, the trends are not looking good. In 1993, the average spent on training each person was $1116. By 2010, that had gone down to $688, a reduction of 38 per cent. By contrast, US businesses still spend $1,071 per person on training. That difference has been pointed to as a part of the prevalent productivity gap between small businesses and larger businesses.
But why is this so – why are businesses investing less and less in training in this country? Well, I think the training industry and practitioners of training and corporate development have struggled to prove the ROI. Our industry speaks the language of helping and nurturing versus dollars and cents. In fairness, it is very difficult to quantify the benefits that accrue from training investment at a company level. If, for example, a sales team is given a comprehensive new training program and the following year sales skyrocket – was it because of the training or was it perhaps the Canadian dollar has crashed or a competitor has gone bankrupt? In order to answer assuredly, control studies are needed – and what business would invest to do that? Fortunately, there is a great deal of peer reviewed research that has documented the ROI of investing in training. People who are passionate about training need to speak to ROI more, or at least as much as they speak to softer outcomes – such as happier employees, better leaders and enhanced teamwork, etc.
In future blogs, I will zero in on the paradox of Quebec where training can essentially be free for businesses and yet adoption is still low. But for now, I think the best response I have heard to the business owner who is afraid that training is a path to increased turnover comes from Zig Ziglar. He once quipped, “What’s worse than training your people and losing them…. Not training them and keeping them.”
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