Founder of the Ford Motor Company, Henry Ford, once said, “The only thing worse than training your employees and having them leave is not training them and having them stay.”
Your people are your primary assets and no matter what business you’re in, investing in your people is key. While a lot of organisations do have a training budget and recognise the value in training and development, in times of austerity it tends to be one of the first things to get cut. HR and Training and Development teams are having to fight harder for their budget and spend it more wisely than ever.
According to figures from the Greater Birmingham Chambers of Commerce’s Chamber Council’s (GBCC) Quarterly Business Report, at a national level, the UK’s productivity is 30% lower than the USA and 35% lower than Germany. As well as this, only 31% of organisations in the region are offering employees formal training opportunities in leadership and/or management skills and techniques.
Henrietta Brealey, Director of policy and strategic relationships at GBCC, said: “People are often a business’s biggest cost – and asset. The latest statistics show that many organisations in Greater Birmingham are not training their employees in leadership and people management, a key component of productivity which feeds into low productivity figures for the region.”
Bad Leadership Costs!
According to research by YouGov on behalf of leading HR and payroll solutions provider MHR, poor management is endemic in the British workplace, with 80% of employees having experienced what they consider poor management, or a poor manager, at least once during their career. The survey of 2,006 British employees also found that 73% of employees who have experienced poor management have considered leaving a job and, among these, a staggering 55% actually did quit because of bad management.
It is also well documented and proven that management style impacts employee engagement. A recent study by Gallup showed that engaged workers are 21% more productive than their disengaged peers, therefore, well trained managers are critical in achieving improvements in productivity.
Guaranteed Return on Investment
Rather than approaching the decision to spend money on training as an expense, it should be looked at as an investment. Unhappy people impact on morale and therefore productivity. And unhappy people leave organisations in search for a more fulfilling experience. But losing people doesn’t just cost the recruiters fee or what the initial training is; it costs the loss of productivity, the time of the co-worker to help and support and induct the new person and the time of the manager who brings the new employee to a stage where they are able to contribute to the organisation.
A report by Oxford Economics has estimated that the average cost of replacing a valuable employee is over £30,000, so this is definitely something that all businesses should proactively seek to avoid. Investment in training makes complete sense and pays back time over. Your people are your biggest asset – if you allow them to be.