The Surprising Cost of Not Training Employees

From a leadership perspective, it’s understandable that employee training can appear to be a burden. Not only does the training include extra costs – as much as $1,000 or more per employee for the average United States company – but it also takes time out of an employee’s work day, which can lead to short-term loss of productivity. Organizations sometimes try to find ways around this, like mandating training for off-hours or having employees handle training on their own, but these tend to create other serious workplace issues. 

So, what’s the solution when a company is already short on resources, but training is necessary? First, it’s important for HR teams to understand the importance of training, along with the risks of not continuing this training. Second, organizations can locate affordable, professional resources to augment training at low costs – and KnowledgeCity can help with that. 

Why Do Companies Fail to Train Employees?

We mentioned a couple of hesitations that company leadership expresses over training, but let’s examine a more complete list of the arguments we frequently hear that lead to canceled or failed employee training programs: 

• Training is too expensive, and our budget is already tight as it is.
• We need every employee we have, and training takes precious time out of their work day. 
• Our turnover is too high, and employee training just goes to waste when those employees leave our organization. 
• Training is a waste of time because new technology and regulations always come along, so we’ll wait until we absolutely have to do it. 
• No one at the company has the experience or qualifications to offer training and we can’t find outside help right now.
• We have enough money in the budget, let’s spend a bunch on training without wasting time on planning and research.
• Let’s train employees in this new technology that I heard about, instead of targeting training for what they actually want and need for their positions.

What Happens When You Don’t Train Your Employees?

Not training employees invites many problems into the workplace, some severe enough to lead to a downfall for companies. At a basic level, employees who aren’t trained will fall behind. Important skills will grow rusty, and they won’t learn about the latest methods and technologies used in their industry. That, in turn, halts plans for investing in newer, more efficient methods in the organization, slowing productivity while competitors race ahead. This also creates a workplace where employees can feel undervalued and stuck in their jobs. 

But there are worse issues: Avoiding certification and compliance training can lead to legal issues and trouble with local regulation enforcers. It also means an organization can lose many potential clients that are looking for the latest certifications and capabilities, reducing future business. 

The Surprising Costs of Not Training Employees

Expenses are a common issue when getting buy-in for employee training. But the truth is, not training employees for extended periods of time can also create serious expenses for a company. The problems mentioned beforehand can lead to serious issues, including:

Teams could lose the ability to perform certain tasks. As technology progresses, employees need to progress with it. It’s estimated that by 2025, half of employees will require reskilling to keep up with their jobs. 

If a lack of training causes businesses to fall behind on compliance, they could face fines for hundreds or thousands of dollars – even more, depending on what regulations aren’t being met. Safety, health, and food-handling certifications are important enough that, if employees don’t complete training, the businesses risk being shut down. If accidents occur, lack of compliance opens companies up for expensive lawsuits, as well. 

No training can lead to employees looking for work elsewhere. Employees who aren’t able to advance their career skills are 12 times more likely to leave their job. Hiring new employees also involves a lot of hidden expenses. Estimates report that hiring costs can be up to 30% of an employee’s expected salary – significantly more than it would take to invest in a training program for that employee. 

Failing to provide training leads directly to lost profits due to the problems we discussed. In the early 2000s, researchers found that companies that invested around $1,600 per employee in training saw 24% higher gross profit margins, and 26% higher price-to-book ratios, compared to firms that spent little or nothing on training. Today, the difference is likely even starker.

Training is Not an Expense, But a Long-Term Investment

As the data shows, training yields results: Like many kinds of investment, it trades certain initial costs for long-term productivity, success, and even savings. Talent growth and upskilling can help improve recruitment as well. 

Organizations that choose the right kind of training for the employees – without delaying it – have opportunities to capitalize on the latest market shifts and outpace their competitors. Additionally, millennials and other younger professionals see their in-house development opportunities as a significant factor when choosing whether or not to stay with a company.

If companies are still worried about finding the right resources, KnowledgeCity can help with our comprehensive library of training subjects. We provide whitepapers, ebooks, and comprehensive online training videos that are ideal for introducing new subjects to employees or helping them sharpen existing skills. 

Our compliance library covers important topics ranging from hazard communication in factories to sexual harassment prevention. And our safety courses include a variety of industry-specific safety programs and information. These courses are designed to be easily accessible, using shareable videos to go over essential, targeted information. KnowledgeCity can help employees prepare for exams, expand their knowledge, and achieve certifications. 

Learning More

Looking to expand your training programs, or start a new training initiative for specific goals? Download our free guide on How to Implement a Successful Employee Training Program, which includes the necessary tips to get started on the right foot. This guide will help you avoid potential pitfalls so you and your teams can reach new levels of success.