Marichelli Heredia

BUSINESSES BENEFIT FROM TRAINING

By John Ayala, senior vice president of service and operations, ADP TotalSource       

Business owners are struggling to do more with less in today’s changing economic environment and are exploring new ways to stretch their dollars while maximizing employee productivity. Many studies have proven that training is essential to running your business. The U.S Small Business Administration reports that most businesses recognize the importance of training employees and realize that as the marketplace becomes more competitive, training programs are both marketable to potential employees and critical to a business’ success. According to a 2007 report by The American Society for Training and Development (ASTD), an organizations’ investment in learning technologies pays-off through cost savings and efficiency gains. A study by ASTD of 540 U.S. companies concluded that those who invested more in training realized a 37 percent higher gross profit per employee. Training is an essential means by which employers can attract and retain quality employees, as well as increase the efficiency, output and production of a company.

As business owners know only too well, the days of employees remaining with one company for the entirety of their career is gone. Small- and mid-sized businesses are at a distinct disadvantage in attracting the best-qualified workers, as they usually are unable to offer or manage comprehensive employee training and professional development programs that larger companies present. Ultimately, the implementation of training programs can significantly further a company’s growth potential and profitability. Employee turn-over as a result of stationary career growth requires the company to continually hire and train new employees. Companies that spend $218 per employee on training have more than a 16 percent voluntary turnover, while companies that spend more than $273 per employee have turnover of 7 percent annually, reports Workforce.

In addition to the direct financial impact to a business’ bottom-line, there are other benefits to investing in employee training programs. For example, training increases employees’ skill levels, positively affecting performance and productivity. It provides employees with valuable tools to manage their activities more effectively. It also increases employee satisfaction, deferring the need to recruit, hire and train new employees, all of which adds costs to businesses. Also, a well-trained workforce can help reduce employer liability.

In today’s society, employers are at risk for a myriad of lawsuits, including discrimination, wrongful termination and sexual harassment. Companies are less likely to face these types of situations if employees and managers know their rights and responsibilities. Training helps to reduce the risk of inappropriate behavior and the resulting lawsuits while increasing productivity and employee satisfaction.
While the benefits of employee training may be clear, businesses often work under the misconception that it is too costly. However, any business can provide its workforce with the necessary tools to succeed. Depending on the investment level a business owner can make, there are several different training options available.

The most accessible training resource an employer has is its own workforce. Companies with limited budgets can conduct their own in-house training sessions led by employees with remarkable skills in specific areas. Employers can also provide access to books, videos and e-learning tools and encourage discussions between the staff. Another inexpensive training technique is to join a local business association, which may yield new avenues of training options, including governmental-sponsored seminars.

An alternative to in-house training programs is to work with a Professional Employee Organization (PEO). PEOs provide small- and mid-size businesses with full-service human-resource management and payroll services. A major benefit of a PEO relationship is the access to experts it provides its clients. PEOs are available to help employers through employment related situations. Many PEOs offer training programs that can increase employee productivity, some even offer specialized development programs to their clients. These value-added benefits include online and in-person training sessions for employees and managers, including pre-employment and hiring, regulatory compliance, workplace safety and terminations. The training seminars offered by PEOs benefit both the employer and employee providing them with the necessary tools with which to succeed.

Regardless of which training options an employer implements, there is a clear correlation between productivity and training. In order to survive the unexpected and all too frequent shifts in business, it is necessary to have a well-prepared workforce. Training strengthens an employee’s knowledge base, increases core skills that yield higher levels of productivity, creates a sense of loyalty and well being within the company and is an added benefit to help maintain and attract qualified individuals.

About Author:

John Ayala, senior vice president of service and operations with ADP TotalSource, the Professional Employer Organization of Automatic Data Processing, Inc. (NYSE: ADP). ADP, with nearly $8 billion in revenues and over 600,000 clients, is one of the world's largest providers of business outsourcing solutions. Leveraging more than 55 years of experience, ADP offers the widest range of HR, payroll, tax and benefits administration solutions from a single source. For more information about ADP TotalSource or to contact a local ADP TotalSource sales office, reach us at 1.800.447.3237 or visit the company's Web site at www.ADPtotalsource.com.