Save Money by Skimping on Training!


My daughter is one of the most amazing people I have ever known. She is intelligent, motivated, and dedicated. What’s more is that she is an ideal employee. Why? Because, she is a very fast learner. She has the ability to watch someone do a specific task and can immediately do it. She can also be told how to do a new task and without hesitation is able to do the same tasks. Learning for her is easy. Training her, in any new job, is easy for her employers. If only every employee was like this.

Unfortunately, most employers are not that fortunate when hiring employees. In fact, training employees can be one of the more painstaking aspects of employing someone. Training is important, however, not only for the employees and any clients/customers, but also to the business’s bottom line.

Employee training can be costly, which is one of the primary reasons businesses decide to skimp on training. However, this is a huge mistake for several reasons:

  • Training increases productivity, efficiency, and motivation
  • Training reduces turnover
  • Training improves relationships with clients/customers and coworkers

In other words, training can save your business money, as well as increase profitability.

I have worked with businesses that didn’t see training as a priority; they would offer on-the-job training, however. This can be good, depending on who is doing the training. An employee in charge of training new employees, who was trained poorly, and who also doesn’t have stellar productivity, efficiency, or motivation might be more of a hindrance to training a new employee.

The primary reason I have discovered that employers don’t provide enough training is cost. Basically, employers believe:

  • Training costs too much
  • Training takes the employee away from doing their job, resulting in profit loss
  • Training is pointless if the employee quits anyway

These are definitely valid points. However, breaking it down monetarily might shed some light on the cost/benefit ratio to training.

The Society for Human Resource Management indicated that the cost of per employee training can be calculated using the following formula:

Training cost per employee = Total training costs / Number of employees

This is pretty basic; however, when looking at it this way, the idea that training is expensive is downgraded, depending on how many employees are being trained.

According to the Association for Talent Development, the average cost of training an employee, in a business with under 500 employees, is approximately $1800. Now, before dismissing this and saying it’s just too much, employers should look at the big picture.

If an employee is not trained well, the business can suffer significant financial losses.

  • Turnover costs a business approximately 16% of the employee’s salary they are replacing. This means that if the salary of the employee is $20,000, the employer loses $3,200 just trying to replace that employee. This cost is due to advertising for the job, time spent during the hiring process, cost of new equipment/uniforms, and potential training costs.
  • Loss of motivation for a job is directly related to intent to quit. When employees become demotivated in their jobs, they often look elsewhere for employment. The thing is that training helps to increase employee motivation. Why? Because employees begin to feel valued and as though their employer wants them to succeed. Most employees want to do well in their jobs. If they aren’t given appropriate training, however, they often don’t do well and this reflects in their work, attitude, and performance evaluations.
  • Loss of productivity can cost a business thousands of dollars per month. This is due to what employees are doing other than working, or how long it takes employees to complete certain tasks. When an employee is not productive, they take longer to complete their work. A task that might take a productive employee an hour to complete could take an unproductive employee two or more hours to complete.
  • Inability to do job correctly can cost a business more than just time and salary costs. When employees do not know how to do their jobs, or don’t know how to do them well, this costs the business in extra time needed to correct mistakes. However, it can also cost the business’ reputation. If mistakes are not caught before invoices, emails, or other communications are sent out, this can cost the business’ reputation and potential clients.

Training should be very high on a business’ to-do list. Any new employee should be trained well for their job. If management chooses only to use on-the-job training by seasoned employees, then it is imperative that those employees know how to do their jobs well, but also know how to train.

I have been trained by some very capable coworkers, but I have also been trained by coworkers who really didn’t know how to train and thought I should just know what they were talking about. In the latter situation, I really had no desire to stay in the job, because what was the point? I didn’t know what I was doing anyway. I was left to fly by the seat of my pants and was often reprimanded for not knowing how things worked. Thanks so much on-the-job trainer!

Skimping on training is never the way to go. If a business does skimp because of concern about cost, there is a risk of costing the business even more. Many businesses don’t see how loss of motivation, productivity, or efficiency can impact the business’ bottom line, however, this is extremely important for businesses to understand because the financial implications are huge.

Investigating different ways to train employees, and all the different resources out there, is one way to figure out how to lower costs for employee training. The primary goal for investing in training is not to cost the business an arm and a leg, but rather to help prevent other costs related to turnover, lost productivity, and lack of motivation. It’s an investment that no business should pass up, but if they do, they will likely see the implications in their bottom line.


About Author

Margaret Murrow

Margaret obtained her M.S. in Organizational Psychology and Nonprofit Management in 2014 after spending a decade focused on homeschooling her four children. She is currently pursuing a Ph.D. in Health Psychology and has earned a certification in stress management coaching. When she is not studying, she spends time working as a freelance writer and a certified stress management and business coach for employers around the world.