What If We Didn’t Train?

What If We Didn’t Train?

Training can be expensive. Have you ever wondered whether or not your company would be in a position to save money if you simply skipped it entirely or would it cost you even more?

The Numbers

To begin figuring this out, let’s establish a baseline first. Educational needs are obviously going to differ depending on the type of work that’s being conducted and the size of the company, but there are fortunately some handy national averages available for us to consider. Training magazine, which specializes in professional development topics, serves as a great source for this data with its 2017 Training Industry Report.

According to their findings, on average, companies spent $1,075 per learner for training in 2017. The amount spent varies based on the size of the company though, with larger companies typically spending less ($399) than midsize ($941) and small ($1,886) companies.

Those figures don’t take into account time invested though, which we all know can be substantially expensive too. On average, employees received 47.6 hours of training in 2017. Midsize companies provided the most hours at 54.3. Large companies conducted 42.2 hours and small companies conducted 43.2 hours.


Companies spent an average of $1,075 per learner for training in 2017.

  • Larger companies spent $399
  • Midsize companies spent $941
  • Small companies spent $1,886

On average, employees received 47.6 hours of training in 2017.

  • Large companies conducted 42.2 hours of training
  • Midsize companies conducted 54.3 hours of training
  • Small companies conducted 43.2 hours of training

Source: Training Magazine


But, Should We?

So, now that we’ve established what your company can roughly expect to spend on training in a given year per learner, would your company have anything to gain from cutting your training programs?

Other than saving about $1,075 per employee and about 48 man-hours of their time in a given year, you wouldn’t really be getting very much momentum by being stingy with your training. Actually, your company would be losing a great deal of opportunity. Of all the various data points our team discovered while working to learn about this problem, one item alone stood out as by far the most shocking –

How much could you lose by not training? About 24% of your profitability.

That’s right. Companies that invest $1,500 per employee on education experience an average of 24 percent more profit than companies who invest less, according to data from HR Magazine and the Huffington Post. That figure alone is probably more than enough motivation for employers to invest in training, but the reasons to do so go further than that.

If profitability’s not your thing, then how about productivity? Investing 10 percent more into your training program can get you an average of an 8.6 percent boost to your team’s overall productivity, on average, based on data from the National Center on the Educational Quality of the Workforce. In a manufacturing-intensive state like Indiana, a humble 8.6 percent could equate to millions added to our GDP.

What your company spends on training can also go a long way to reducing another unfortunate cost of business – that being the expenses incurred by employee turnover. More than a third of younger employees consider professional development their top benefit they seek from employers, according to survey data from PricewaterhouseCoopers. To add to that, IBM found employees who feel stagnant in their careers, unable to advance, are as much as 12 times more likely to leave their companies.

Evaluating how much employee turnover is actually costing your company in an average year is a complicated thing to determine, and it’s likely to vary depending on who’s leaving. We know training costs an average of a little over $1,000 a year. When you consider data the Society for Human Resource Management published that found every time a business replaces a salaried employee, it can cost as much as six to nine months-worth of their salary on average to find a suitable replacement. One can easily see it’s just much cheaper to invest in that initial training.

Also, in general, more professional development opportunities help to foster a greater sense of engagement and involvement for employees. It gives them a greater sense of connection to their company’s culture and the overall direction that it’s heading, which effectively makes them a stakeholder as well as a paid employee. That’s huge. Think about it; you can pay an employee to be there, but you can’t make them care. When you invest in education, showing your staff that you care about their skillsets and willingness to improve, that level of care and interest is frequently returned in full – once again, thereby lowering turnover and boosting productivity for the betterment of all.

The Answer

The bottom line here is that professional development options are generally a great investment for any type of company to make. While we all understandably want to lower our costs of doing business, this is just one area where making cuts does carries more damage potential than savings potential. Be smart, invest in training, and build an even smarter company.

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