In November of last year, Fortune magazine reported that unfilled job openings at U.S. businesses create an economic cost of roughly $160 billion a year. Yes, that’s with a B. The article attributes a part of this due to decreased production when positions remain unfilled. For example, when an open sales position exists a business literally leaves money on the table because of lost opportunity. Empty positions that facilitate efficiency, such as IT or administration assistance are also painful and costly.
Large companies have offered continuing education opportunities or tuition reimbursement as an employee benefit for a long time. Now, small and mid-sized businesses are taking a closer look at employee training as a way to combat skills gaps and plug holes within the organization.
Organizations that invest in employees’ continuing education find they can benefit and generate a return on investment. Let’s take a look at a few ways they make this happen.
Improve Employee Engagement – Employees who take advantage of educational opportunities tend to be more engaged in their work between classes. Not only do they acquire new, they are more eager to try them out. Companies with the highest levels of employee engagement consistently outperform their less engaged competitors.
Improve Employee Productivity – Savvy employers incentivize training in the areas that most benefit the business. Need to increase your sales margins? Develop training programs or send your sales team to courses that teach price optimization! One consultant who specializes in price optimization and sales training in the distribution industry shows that customers whose sales teams deliver a 1-point margin gain often see an increase in overall corporate earnings by 25-50%.  Other organizations find that they can reduce productivity loss due to employee turnover by cross-training employees to cover open positions.
Improve Employee Satisfaction – Employees whose employers support their professional development through continuing education report more job satisfaction and increase the likelihood to remain with the employer for longer.
Feed the Succession Pipeline – More interestingly, a Society for Human Resource Management (SHRM) report shows that 47 percent of surveyed employees report career advancement opportunity within their organization as “very” important to their job satisfaction, an opinion that has been trending in the last several reports. 41 percent indicate that job-specific training is “very important” and 39 percent report that career development opportunities are very important. And yet, only 20 percent of those surveyed said they are satisfied with career advancement opportunities within their organization.
This suggests that companies investing in career advancement can essentially kill two birds with one stone: Generate a more satisfied workforce while preparing employees for advancement to fill open positions internally.
Keep Your Workforce at the Cutting Edge – If satisfaction measurements feel subjective or “soft,” the cold truth is industries and the technologies to conduct business change at a phenomenal rate. Employees need constant training to keep up with their jobs at the same time they are doing them. If you let employees fall behind on skills you let your business fall behind.
Fortune Magazine’s article suggests that employers no longer have the luxury of waiting until a perfect candidate arrives. Instead, the challenge is to hire employees with a drive to learn and a profile for success and then invest in training them with the skills they need for current – and future – jobs.