A recent study by economists at the University of Warwick found that happy employees recorded a 12 per cent spike in productivity, while unhappy workers proved 10 per cent less productive meaning the same is translated to the customer.
While it’s easy to view investment in staff development as a cost centre, statistics show that the benefits a company can accrue from a skilled manager are wide-reaching when considered wisely. There is indeed evidence that organisations investing in effective staff training and development tend to achieve both short and long-term benefits.
Productivity and customer satisfaction
Training increases overall client satisfaction because of professional service delivery by the staff, which can only be achieved through targeted customer service training focused on client-facing employees.
A recent study by economists at the University of Warwick found that happy employees recorded a 12 per cent spike in productivity, while unhappy workers proved 10 per cent less productive meaning the same is translated to the customer.
For instance, today Zappos — an online shoe and clothing shop based in Las Vegas, Nevada, is recognised as a legend in the customer service world.
The company has an employee culture with a singularity of mind-focused on customer service and not in some sort of cookie-cutter corporate way.
A unique thing about this company is that everyone that is hired, it does not matter what position, accountant, lawyer, software developer, goes through the exact same training as their call centre reps.
It is a four-week training programme and then they are actually on the phone for two weeks taking calls from customers.
At the end of that first week of training, Zappos makes an offer to the entire class about payment for the time already spent training plus a bonus of $2,000 to quit and leave the company immediately after the training. According to Zappos CEO Tony Hsieh, paying new hires to leave may seem counter-intuitive, but it makes simple sense. The goal of is to weed out the people that are just there for a paycheque.
Increased productivity
There is an interesting empirical study by the American Society for Training and Development on 540 corporations that utilised two samples whereby one invested about $900 in each employee per annum while the other invested about $275.
The results revealed that the group with high investment outperformed the other with 57 per cent more sales and 37 per cent higher gross profit.
Besides that, the study noted that increasing training expenditure by $680 improved shareholders value by an average of about six per cent.
The study makes a substantive conclusion that companies that dedicate more resources to training personnel enjoy more success and profitability.
A similar study on 575 companies in the US over a three-year period indicated a growth in shareholders return.
In addition, the study noted that investing in training and development yielded a 45 per cent return higher compared to the market average.
Employees retention
Retention of productive employees is a major concern for HR professionals and business executives.
HR data analytics show that it is more efficient to retain a quality employee than to recruit, train and orient a replacement staff of the same quality. Staff training is one of the few exercises most companies conduct to improve employee and business performance.
Training employees enables them to be able to perform diligently even in tasks they doubted they could when joining the company or business.
A good case study is Quicken Loans Inc., Michigan. The online mortgage lender offers its full-time employees an average of 350 hours of training every year and has a low 13 per cent full-time staff turnover rate.
Data from Kenya is scanty. One study published in the International Journal of Science and Research in 2012 on the influence of training and development on the performance of employees in research institutes in Kenya concluded that the correlation between employee performance and training and development were highly significant.
Bottom line
Training has always been a great option for an organisation to build a diversified employee base, with team members learning the ropes and company mores.
But many organisations throw the training programme to the curb after they feel new employees have become well-acclimated to the organisation. But this notion could not be further from the truth.
Companies need to develop a consistent training programme to allow employee growth.
