Organizations that invest in employee Training help reduce costs in the recruiting and staffing process by 49% !
Nicolas BEHBAHANI
Global People Analytics & HR Data Leader - People & Culture | Strategical People Analytics Design
?? Like technology, talent requires continuous investment or it becomes obsolete.
Digital World Class? organizations - those that perform in the top quartile in both business value and operational excellence - are both more efficient and more effective in developing people and skills. They achieve 49% lower recruitment and staffing process costs than peers. These companies realize additional benefits from their investment in training in areas such as employee engagement, customer experience, internal promotions and turnover. But...while executives clearly understand the criticality of investing in talent, they are challenged to do so against the current backdrop of economic volatility and corporate cost cutting. In such environments, researchers believed that training is often one of the first areas targeted for cuts, according to a new interesting research published by The Hackett Institute using data from their internal clients.
?Spending more on training will elevate staff development beyond investment
Researchers found that for a typical $10 billion enterprise, Digital World Class organizations spend 38% more on training on average, an additional $13.65 million – compared to the peer group.
?? With this extra investment, they are able to deliver 45% more training hours, elevating staff development at a rate greater than the investment.
?Spending more on training contribute to lower recruitment and staffing costs
Researchers found that Digital World Class organizations which invest in talent development, have significantly lower recruitment and staffing costs (less that 49%) and, ultimately, overall general and administrative (G&A) costs.
?Benefits beyond cost and efficiency
In another research published last year, The Hackett Group Inc. researchers found that all Digital World Class GBS organizations saw improvements in employee engagement (+22%) and customer experience (+49%) from their investment in training.
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?? Researchers found organizations that provided more than 100 annual learning and development hours per GBS employee in 2022 realized superior returns in both Operational excellence and Business value – including measurable advantages in operating cost productivity, quality and customer service.
?? Finally researchers recommend three below steps leaders can take now to make sure their organization gets maximum benefit from its training investment:
1?? Develop a good picture of the skills you have today relative to those you do need and will need in the future. This is an important baseline that many organizations struggle to establish – often due to insufficient effort.
2?? Establish mechanisms for measuring training effectiveness. The most mature organizations understand that there is no singular metric for defining return on investment (ROI) in training. These organizations measure the outcomes of training using multiple metrics to assess the impact on an individual’s productivity, performance in a specific role, promotion and other areas. And they are prepared to take action and make adjustments based on what they learn.
3?? Work with your organization to take a long-term view of training – ensuring that stakeholders understand the central role it plays in enabling their major investments in technology and digital transformation, and the implications of cutting back temporarily to reduce costs. While training is an easy target for a short-term financial “win,” this can backfire down the road. Underinvestment can contribute to longer-term challenges such as increased attrition, unmotivated talent, lack of essential skills, and even negative impact on the employee value proposition and employer brand.
Thank you ?? The Hackett Group Inc. The Hackett Institute researchers team for these insightful findings: Ben Hartfield and Tony DiRomualdo
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1 年Thorsten Schaar
HR Strategist. Lecturer and International Speaker on HRM and Value Management.
1 年Great post Nicolas BEHBAHANI. Yes, training can be costly in time and expense but is essential if both the individual and the organisation is to be developed. However, how many employers are aware of the skills and experience that are already 'lurking' in their organisation? How often are we told by recruiters to tailor our job applications to the post for which we are applying? What skills are being left out that may be useful to the employer in the future? My advice to employers is to carry out a skills audit - if people already have the skills required then the cost can be reduced by allowing these skilled people to pass on their skills to others. We also need to be mindful of implicit learning (unstructured learning that takes place in the workplace) and to encourage employees to identify such learning, put it into context and pass it on to others. Thank you for sharing.
CEO at Knowme Global - I help people achieve their goals.
1 年An excellent way to keep doing training is in-house training done by the same employees. Also it is a very good way for people to connect,
Leadership Advisor | CEO | CFO | Entrepreneur | Creative Leadership and Talent Development
1 年?? Very insightful post! Thanks Nicolas BEHBAHANI for sharing! Investing in talent is absolutely crucial for business success. Especially investing in their leaders. Are businesses jeopardizing their future by cutting training programs? What are your thoughts?
CEO/Founder Building at the Intersection of Talent & Technology | 15,000+ Corporate Hires across 43 Countries | AI Optimist
1 年I don't invest in my employees so they can provide value to MSH. I invest in my employees so they can be free to do whatever they need to do to be their best person at work. And it should be the same in ALL organizations. Progression and development - BEYOND what they need to do for your organization - is what every employee wants.