“Where do you see yourself in five years?” This interview staple rarely gets an honest answer. One might be: “Without employee training and development, I see myself working somewhere else.”
The average person stays at a job for 4.2 years, and millennial employees are especially likely to leave if they’re unhappy. If you want to know how to reduce employee turnover, you need to start thinking about employee training and development. It’s not usually at the top of the list — most people think about salaries and benefits first — but making room for growth can work wonders on your turnover rate. According to Training Journal, on average, the organizations on Fortune’s “100 Best Companies to Work For” list provide close to twice as many hours of training (73) as other companies (38).
Small businesses don’t have the luxury of large HR departments that dedicate themselves to the question of how to reduce employee turnover, but that doesn’t mean you can’t effectively develop your employees in ways that make them want to stick around.
The Cost of Turnover
Because many small businesses don’t do as much hiring as their larger counterparts, they may not think about turnover as a core part of their budget, but it can have a huge impact on your bottom line. The cost of replacing an employee who leaves is estimated to be 33 percent of their salary — that’s $15,000 for a worker who was paid $45,000 annually. While of course that number will vary from job to job and industry to industry, it’s certainly not cheap.
While they’re high, the costs associated with recruiting, hiring and training someone before they can operate independently are often hidden. This means that companies may not spend much time thinking about them. That’s a mistake. Say you hire a new assistant at $15 an hour but you have to spend half your time helping her learn her new job. That’s time you could be putting toward other things, and those trade-off costs are as real as any others.
And don’t forget that being a revolving door for employees disrupts the culture of your workplace. Especially if you’ve put time and energy into cultivating a great wellness culture in the office, a high turnover rate could mean health that initiatives are getting squeezed out or forgotten altogether — which could spell danger for your employees’ ability to perform on the job and your insurance premiums alike.
What It Takes to Create a Training Program
Depending on whether it’s done in-house, at a seminar, through a formal education program or by other means, the costs of employee training and development can vary. That said, they’re likely to be less than the cost of turnover. Employees want a chance to grow and develop, and training offers this.
When considering how to organize your employee training, especially if you’re building a program from scratch, ask yourself:
- What are my needs? While it’s nice to consider what your employees want, you need to prioritize what your business needs now and in the future. The goal is to match employees who have specific interests or underdeveloped skills with important gaps in your business. But even though helping employees reach their training and development goals is a way to help keep them on your staff, some turnover is inevitable. So consider succession planning, too. Who will replace your office manager when they move on? It might be practical to start training their replacement now, while you can still draw on the current employee’s experience.
- What resources are available? You don’t have to look far to find great tools to help you build a training program. Khan Academy, for instance, offers free courses; and while you may think they just help kids with algebra, they host classes for all sorts of business-related things. If you’re willing to spend a little money, Udemy and Coursera offer low-cost courses. Spotting educational opportunities offline should be just as simple: Professional organizations offer seminars. Consulting companies will come in and train. Your local college or university may offer a course. And you can always consider helping with tuition for an employee to earn a certificate or a degree.
Even Small Businesses Have Room for Growth
You may think, “I only have 10 people! I need them to do their current jobs, not different ones!” But wouldn’t you prefer that they do a better job? With proper support, people can become better at their jobs — leaving more space for you to focus on things like growing your business and increasing your revenue. Sure, you only need one salesperson, but if the office manager knows how to do sales as well, they can provide valuable backup.
Keeping employees from growing stagnant is a key part of keeping them happy. With good planning, you can make it possible for your employees to meet your current and future needs. Employee training and development will keep your workforce skilled, efficient and engaged — and constantly moving forward.
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