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Employee Retention Company Culture

The Training Fallacy and the Importance of Investing in Employees
Written By
On Jan, 20 2020
2 minute read

You’ve likely heard the old adage: a CFO and a CEO discuss training employees.

The CFO asks, “What if we train them and they leave?” The CEO responds, “What if we don’t and they stay?”

There are those that argue that the CFO has a point: training is a limited resource and employees could potentially abuse the system, using the company to gain experience before leaving to work for a competitor.

But if employees are leaving the company in exodus, tolerating only until they are able to break away and thrive elsewhere, then it’s much more likely indicative of a much deeper-rooted problem within the workplace.

Deciding not to train employees out of fear of their departure is in itself an example of a company with poor workplace culture. The CFO’s lack of trust for his workers will eventually be likewise reciprocated, and the clear lack of communication between higher up executives and entry or mid-level workers will help create to a hostile work environment, becoming a self-fulfilling prophecy and contributing to employee turnover.

Now consider the CEO’s answer. Untrained workers in themselves are a bane to the company’s potential revenue, potentially costing the company more in lost profits then if it had simply decided earlier to train them. Even with high turnover rates (13.5% annually in the tech sector) that result in inevitable departures, the profits brought by the number of trained and productive employees far outweigh the money lost by a skilled talent. Basic economics comes into play here: the opportunity cost of taking the risk and helping your employees grow is much greater than “playing safe” and choosing not to train any of them.

Furthermore, for a company, especially one in the tech sector, reputation is everything. In a competitive employment market with 2% unemployment, having a reputation as a stingy company with a hostile working environment turns away strong talents that could have otherwise brought valuable skills to the table. In that case, you’ll have much more to worry about than just your current workers (who, keeping in mind, are still untrained in this scenario).

As a senior-level executive, it’s easy to get lost in the numbers and calculations. Still, it’s important to remember that your employees aren’t just figures printed on paper. They’re people with career ambition and bills to pay. And one of the worst ways to retain these employees is to essentially suggest to them that they are untrustworthy and unworthy of being invested in.

Trust and loyalty are mutual. If you’re willing to believe in your employees and support them with training, they’ll have higher company loyalty and pay you back in kind with higher productivity and earned revenue.

Data collected by Ken Blanchard Companies, a management training firm, found that 60% of employers currently subscribe to the CFO way of thinking and undertrain their workers. With turnover rates higher than ever, invest in your workers and you’ll find that they’ll invest in you in return.

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