Why you need to care about staff development

 

Posted 26th August 2016 by Matt Knight


 

Henry Ford once famously said,

"The only thing worse than training your employees and having them leave, is not training them, and having them stay."

Staff development can pay huge dividends to your business. It is something that you need to invest time and money in.

Of course there is a risk that developing staff will see some of your best and brightest move on to other opportunities, but a development program will always ensure that there is someone to take their place.

 

 

"The only thing worse than training your employees and having them leave, is not training them, and having them stay."

 

 

Research shows that company profitability is linked to a happy workforce.

A consistent focus on staff development and training will create a motivated, skilled workforce capable of delivering the results that you need. Well - trained motivated staff will feel you are committed to their development and they will return the commitment back to you in spades.

As former Xerox CEO, Ann Mulchay once said, “Employees who believe that management is concerned about them as a whole person – not just an employee – are more productive, more satisfied, more fulfilled. Satisfied employees mean satisfied customers, which leads to profitability.”

Viewed in this context, staff development becomes a critical element in your business planning and operations. It will deliver benefits to you in the following key five areas.

 

Greater Staff Engagement

Extending the skills of your existing staff makes them feel like a more valuable commodity to the business. It engenders greater confidence in their abilities and their potential for advancement.

This confidence and understanding leads to more “buy in” , all of which promotes a more harmonious and effective workplace.

This engagement provides flow­on benefits in several ways. Engaged, motivated staff want to come to work. They are happy in their job and are more likely to be an advocate for your business to potential customers and employees alike. This makes them much more likely to suggest new innovative ways of completing tasks, adding even more unexpected value.

 

Improved Efficiencies

An obvious benefit of greater skills and improved knowledge is a lower error rate, which results in greater profit margins.

Perhaps a greater long­term benefit is the potential to adapt more quickly to changing circumstances by having a workforce capable of quickly adopting new technologies and work methods.

An engaged team will be much less likely to resist change and will be more open to new methods. What’s not to love about that?

 

Reduced Employee Turnover

The old saying that retaining a customer is much more profitable than attracting a new one, can be applied equally to staff. Retaining staff and keeping turnover to a minimum is critical if you intend to maximise the returns on your business.

 

The costs of employee turnover are massive when you take into account the associated direct and indirect costs. Direct costs could include such line items as:

  • costs of advertising the vacancy
  • recruitment agency fees,
  • possible fees to consultants for conducting aptitude tests, reference checks and medicals examinations.
  • termination payout amounts, such as pro rata long service leave and pay in lieu of notic

Indirect costs can be even more costly when you take into account such factors as:

  • Loss of productivity caused by other employees having to cover duties
  • Initial induction costs including training and administration aspects
  • Termination costs including processing of final payments and superannuation administration processing times
  • Initial loss of productivity. It will take some time for any new employee to “get up to speed”. While this will vary from individual to individual and from job to job, you realistically have to factor in that it may take some time for the employee to be at least 75 percent as effective as the person that they are replacing.
  • Inevitable loss of productivity in final stages of employment. Once an employee gives notice, there will be a drop in output. It's difficult to quantify, but they will already be focussed on the next stage of their life and making plans for that. 

Their obligations to you are no longer high on their priorities list.

With these costs in mind – the costs of an ongoing staff development program that aims to engage and motivate employees should be seen as an investment in the business rather than a simple expense.

 

Better risk management

The resultant greater engagement of staff brought about by staff training and development creates tangible benefits in the areas of risk management and safety. Engaged staff are more likely to identify risks of a financial and physical nature.

Risk identification, reduces the likelihood of costly incidents. Innumerable studies have also shown that disengaged staff are twice as likely to have an accident at work. You can also ensure that employees are up to date and informed on such issues as sexual harassment and equal opportunity.

 

Improved Business Profile

The best form of advertising is word of mouth.

Employees who appreciate being treated well and given the opportunity to improve will share their positive experiences about your business. Every time they cast your business in a positive light they do two things.

They give your business free advertising as an ethical business committed to staff development and they also make your business an attractive place to work at for potential new employees.

Seems to me that Henry Ford knew actually what he was talking about, way back when.