Why businesses should invest more in employee training to enhance profit margins


Many early stage startups expect new employees to acquire skills on the job, while some large corporates too generally don’t invest much in long-term employee training programs. Companies don't train workers anymore because of different apparent factors such as the changing nature of work and constant job hopping by employees.

But businesses should continue to invest in all their employees. In fact, these are the people who plan, process, and propel a business and help to achieve its ultimate goal, which is profit maximisation. Every person in every department works for this supreme objective, directly or indirectly. Many falsely presume that only sales and marketing people are responsible for revenue generation.

In practice, be it a production engineer or an account manager, a market analyst or an HR executive, all contribute immensely to maximise the business profit. Only those organisations where all people work with solidarity achieve annual targets and get success in the long run.

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As per the HR Magazine, companies that invest $1,500 per employee annually on Teaching and Learning (T&L) activities earn 24 percent more profit margins than organisations with lower training budget. A similar study conducted by The American Society for Training and Development (ASTD) reveals that out of 2500 companies firms which had provided comprehensive training to its employees availed 218 percent more income per employee than companies with less aggressive and non-comprehensive training approach.

Now, it is a firm belief of a majority of corporate giants all over the world that by leveraging technical and professional skills of the employees, businesses can make higher profits without endangering their sustainability.

How to gain optimal ROI from a training programme

Trainers and change managers should try to improve three personality attributes of the employees through a training programme. These are -- willingness to take initiatives, keenness to learn new technologies/methodologies, and eagerness to improve productivity.

Here, the HR manager should choose an appropriate leadership style only after diagnosing the development level of her/his team. Frequent meetings and conversations with the team members, facilitating group communication, active listening, feedback, problem anticipation, and finally resolving the problems with smart solutions are the qualities of a good HR manager that are pretty much essential to bring desirable changes in employees’ personalities.

Strategic training assures magical results in the productivity, performance, quality, and behaviour of the human capital. It narrows down the gap between managers and team members, and accentuates communication between them. It also motivates the employees for active participation in group activities, reinforces peer-to-peer coordination and instills a feeling of solidarity among the team members.

Related read: The inner workings of an effective team

What makes training a win-win exercise?

Training and Development (T&D) has great importance in making employees ready for a concentric task, understanding the importance of collective responsibility, accountability and teamwork. Various types of T&D activities help to strengthen a team’s efforts for enhanced productivity and organisational growth.

Innovative training approaches not only raise the employees’ competency level, but also leverage a culture of accountability, commitment, self-actualisation, and satisfaction. Scientifically developed yet crispy and engaging content, interactive games, role plays, informative videos, game cards, conversation starters, and streamlined simulation activities bring desirable behavioural changes and improve the overall productivity of an organisation.

That’s why organisations all over the world are realising the increasing demand of human resource (HR) training in the constantly evolving business world and for a majority of entrepreneurs employee’s training is the fuel of enhanced productivity and growth.

HR leaders are adopting novel approaches to employee training in the line of changing economic scenario and business objectives.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory)

Related read: 8 ways to keep your employees productive and motivated


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