What are the costs of hiring a new colleague, and how much does it cost to train an old employee? Can a company that does not have a training model be successful in the long run? How can you convince an employee that it will be good for them to learn while working? And how can all this help reduce turnover? We investigated the relationship between the labor market situation and employee training - we present the most important experiences.
When turnover in a company increases, the company's management immediately redeploys huge resources to recruitment to replace departing employees. However, a common mistake is that in the meantime, management does not pay enough attention to retaining old colleagues, which can lead to the company falling into an accelerating turnover spiral - outlined a situation that can be considered typical in today's labor market, József Nyisztor, CEO of Training360. That is why the workforce development expert believes that a good solution is for company management to place equal emphasis on hiring new employees and retaining old ones. However, retaining existing employees is often a greater challenge for company management than finding and training new colleagues. Training is a good tool for this, the expert said, but he immediately indicated that it does not matter who and how they are developed.
Foresight instead of firefighting
According to József Nyisztor, “the implementation of goals at the project level is the guarantee for a successful strategy”, meaning that the amount earmarked for training will only be a profitable investment and not wasted money if the company knows exactly what and how it wants to achieve. In most cases, however, the creation of a training system is only considered when the company is already facing a serious challenge. In such cases, the goal is “firefighting”, i.e. the rapid handling of current problems, which does not create an ideal environment for building the most appropriate training system. It allows greater room for maneuver if the goal is not firefighting, but rather its conscious avoidance and prevention: forward-looking company management already feels the need for development and progress when there are no particular problems within the company. “It is better for the company to have a well-developed, thorough training and development strategy that may seem unnecessary in calm times, than to have to rush when trouble has already struck. "This way, in the event of workforce problems, the steps on the road to a solution are immediately provided," explained the CEO of Training360.
Divergent interests?
Of course, the training system must also be accepted by the employees. Many of them often ask the question: why is this worth it to me? That is why, emphasized József Nyisztor, it is important to keep in mind not only the interests of the company, but also the interests of the individual, and training must be personalized. For example, as a first step – as a kind of teaser – it may be worth providing training that is not necessarily necessary for the current job of the given colleague, but that interests him. A given training structure can only work well if all of the participants are satisfied.
The success of the training system also depends on the openness and example of the management. Top-down organization, personalized training, leadership by example, and the coordination of seemingly divergent interests are the keys to efficiency, the managing director explained.
Training is a profitable investment
There are also serious financial arguments in favor of training. Ideally, the cost of the existing workforce correlates with the cost of replacing it: this is the value of the work itself. This can be several hundred thousand forints per year, and in key sectors, several million forints. If the company hires a new employee, in addition to the significant costs, it must also be taken into account that during the training period, they only have 30-50 percent of the knowledge compared to their old colleagues. Moreover, even in the simplest fields of expertise, it takes half a year to one and a half years for the new employee to truly perform their tasks confidently, independently and flawlessly, while in the case of more complex jobs, this time can stretch to one and a half to two years. “In comparison, training the existing workforce is a much smaller burden on the company's budget. Moreover, thanks to training, old colleagues who are already much more efficient than the newcomers become even better,” said the managing director. In addition to reducing costs and increasing efficiency, training can also have a beneficial effect on turnover. During company training, employees experience that they are cared for, which makes them feel good and makes them stay with the company longer, which creates a win-win situation for both parties.
Bad reflexes
According to József Nyisztor, for most companies, training expenses were for a long time just one of the mandatory cost elements, but now they have become one of the most important: although many would like to “get away with it”, more and more people are realizing that this is not possible without serious consequences. “Just as training new colleagues cannot be avoided, training existing employees cannot be avoided either,” the expert made it clear. That is why, in his opinion, we need to break with the bad habit that when costs are cut, training is the first area from which resources are withdrawn. According to the workforce development expert, this is a huge strategic mistake, if only because it is precisely during a crisis that renewal must be laid, and development can be best achieved when there is time for training.
Source: hvg.hu