By Jake White, CPLP - Torch LMS
Many industries are facing a unique blend of human capital challenges. These include attracting skilled talent to the industry, retaining and engaging top performers, and ensuring that their people have the skills required to make the business successful. Most industries also face challenges in preparing the next generation of leaders to take on new responsibilities. To address their challenges, companies need to make employee training & development a top priority.
While the majority of businesses budget for training & development, some industries lag in their investment in employee development. For most businesses, the average annual expenditure for training as a percentage of payroll is about 3.2% (or $1,208 per employee).
Learning as an Investment
An investment in training & development has an impressive ROI. The Construction Industry Institute found a return of $1.30 to $3.00 for every dollar spent on craft training; the U.S. Department of Labor found that ongoing training raises productivity by 16%, and Caterpillar University saves an average of $87 per person for every e-learning course taken. We could identify similar returns with specific programs in safety, contractual risk transfer, systems training, etc. These returns are much higher when we consider training as an employee retention tool. Losing talent is very expensive, with the cost of replacement and training as high as 2.5 times a departed worker's salary. “Learning & development opportunities” is consistently listed among the top reasons high-performers stay with their companies.
Implementing a learning and development infrastructure—including resources, technology, and processes—in your organization also empowers your organization to quickly implement change initiatives. An organization’s ability to respond to the market and adapt quickly is the essence of competitive advantage. When you need to
If you are not sure where to start, here are a couple of suggestions. First, most companies need to have at least one full-time manager dedicated to learning & development. This should be someone who understands managing organizational change, instructional design and has management experience. This person will partner with your safety, compliance, and human resources people to prioritize training programs.
Second, you will also need a learning management system (LMS) to track, assign and deploy training in the cloud. This will allow your organization to move away from tracking on a spreadsheet to having a powerful way to assign, track and automate required training, with lots of powerful dashboards and reporting tools to monitor progress. It will also save your business a lot of time and money by moving many of your classroom training programs to eLearning courses, which includes providing interactive training from a mobile device. This kind of education will be second nature to your younger workers, who have likely taken college courses online. An LMS also gives managers powerful tools for tracking toolbox safety training, on-the-job training, and capturing best practices and more.
These two steps are a good starting point, but there is much more that can be done as you roll out an effective learning & development program in your organization. You should also conduct a needs assessment, align training with compensation and performance management, and make sure there are executive buy-in and an adequate budget. These steps will significantly improve your chances of success.
To attract and retain top talent, reduce risk, and drive greater results, businesses need to make employee training & development a priority. Our businesses will benefit, and your industry will be better prepared for future challenges that lie ahead.