By Steve Swanston
Your staff impacts your profitability. The quality of an organization’s employees and their continued development through training and education are major factors in determining the long-term success of any financial institution.
To hire and keep good employees, invest in the development of their skills so they can increase their productivity and contribution to the organization. The most successful companies see themselves as “continuous learning organizations.”
Specific benefits organizations receive from training and developing their employees include:
Increased productivity: To ensure standardized, high performance, employees need to be properly trained. Training is not necessarily showing employees how to do each job, but helping them to acquire the necessary knowledge to perform their duties. Many times, supervisors take the small details of a position for granted, so they skim over the explanations of how and why a specific task is essential. This practice sets the employee up for errors that will later need to be corrected, causing excess work for other employees.
Reduced employee turnover: It’s a proven fact that employees want to contribute to an organization through a solid performance rewarded with recognition, pay increases and additional opportunities – including training. It is when employees are not properly trained or challenged by their work that they lose motivation, become disgruntled and begin looking for other employment opportunities. The cost of turnover is significant, including lost productivity; lost knowledge; and weakened customer relationships.
The extra costs associated with hiring and retraining a replacement can add up and are often overlooked. Many times, a new hire takes several weeks to get up-to-speed, which can significantly cost the organization.
Increased efficiency resulting in financial gains: The costs of training are really a return on investment calculation. A study published in the Harvard Business Review showed that companies that invested above the industry norm in their employees found their stock returns robust. This is in line with a growing body of empirical research showing that when organizations make extraordinary investments in people, they often enjoy extraordinary performance on a variety of indicators, including shareholder return.
Decreased need for supervision: Employees who are adequately trained and cross-trained need less supervision, freeing supervisors to concentrate on leading training seminars or building customer relationships. Plus, an employee who is able to perform a number of functions can be called upon to fill in when needed.
Training also assists in the development of your employees, ensuring you have qualified internal talent ready to be promoted as the organizations grows.
Increased innovation: Once employees thoroughly understand their position and perhaps have even been cross-trained on other positions, they begin to really understand the organization. Many times, this knowledge leads to process improvement initiatives or innovative product offerings.
However, training should not be done just for the sake of training. According to figures from the American Society for Training and Development, the average U.S. company spends between 2 percent and 10 percent of total payroll on training. So, if a training program isn’t helping to achieve its intended results, it should be revised or eliminated.
The end results for an organization willing to invest in its people will be better products, service and financial results. When management invests in its employees, they become a real competitive advantage that will lead to maximum performance for your organization.
Steve Swanston is executive vice president of sales for John M. Floyd & Assoc. (www.JMFA.com), a profitability and performance improvement consulting firm. For more information, call (800) 809-2307.