The Financial Impact of Inefficient Training: How to Address Turnover, Quality, and Operational Output Training is a key element of any successful business. Likewise, identifying and eliminating potentially inefficient training methods is also a necessity. In a world where technology is constantly rewriting the...

Training is a key element of any successful business. Likewise, identifying and eliminating potentially inefficient training methods is also a necessity. In a world where technology is constantly rewriting the playbooks, the need to stay up-to-date and efficient with the latest tools, processes, and methodologies has become essential to ongoing success.

While training is essential, it isn't easy. Trainers in every industry face unique and significant challenges.

Let's examine the cost of inefficient training for the average company as well as the factors making it hard to invest in effective training almost a quarter into the 21st century. From there, we'll look at how companies can enhance the employee experience, accelerate onboarding, and ultimately improve operational efficiency by embracing the cutting-edge methods and technological tools available to them.

The cost of inefficient training

Training takes place in every sector of the market. However, there are some areas where it is more of a focus. The industrial market, for instance, prioritizes safety and efficiency. From operating heavy machinery to using AI for inventory management, the sector involves a lot of training.

But the need extends further. Accountants are using increasingly sophisticated software. Food service employees are utilizing technology to take orders and run restaurants. Sports teams are aggressively investing in statistical analysis.

Everywhere you look, work is changing, and humans must keep up with that evolution. This has put a new emphasis and urgency on the need for training, not just when you onboard an employee but on an ongoing basis.

Companies are aware that upskilling a workforce requires serious investment. In 2019, Harvard Business Review reported that globally, companies were spending $359 billion on training. A year later, Training Mag added, "On average, organizations spent 16 percent of their budget or $708,255 (up from $445,434 last year) on learning tools and technologies."

While this number sounds impressive, TeamStage claims that, on average, companies waste $13,500 on inefficient training per employee. That is millions of dollars for a mid-size company.

Even if this number is much lower for your business, there is another financial threat to inefficient training. HBR adds that 40% of staff—both employees and managers—aren't satisfied with on-the-job training.

If workers and leaders alike are dissatisfied with the quality and impact of ongoing training, it becomes an open invitation for them to leave their company. And when that happens, the cost of turnover can soar.

SHRM reports that technically speaking, the average cost to replace an employee (according to its own benchmarking data) is $4,700. However, that number is misleading, as it only takes into account measurable "hard" costs. When holistically considering the entire impact of losing and replacing a worker, employers must take into account nuances, such as the emotional toll on their remaining staff and the resulting potential for a decrease in productivity. Add it all up, and the cost can be upward of three to four times a position's salary — which, in many cases, is hundreds of thousands of dollars.

Employers should also consider the fact that added time and investment in training new employees is an expense, which brings us full circle to the original problem. Why spend money on inefficient training with new employees after navigating expensive turnover when you can invest a more modest sum into effective training with your existing workforce?

The natural follow-up question is: How can you do that? The answer isn't as easy as it may seem. You can't just up your budget and call it a day. There are very real challenges facing modern training efforts in 2024. Let's consider a few of them.

The challenge of training in the industrial market

What is holding up effective training in 2024? According to a recent report, there are a few key items that are making it harder than usual to train workers in the post-pandemic era.

The Wakefield Research Report from BILT dives into the state of technical training in 2024. The report provides insights and for our purposes here, looks for trends and challenges facing corporate trainers. The report found three key areas that are driving forces in the market when it comes to training. These are:

The Silver Wave

For many companies, a significant portion of their workforce is either already or about to age out. For years, many individuals, especially from the Baby Boomer generation, have remained in their positions as companies navigated things like the pandemic, the Great Resignation, and the shift to remote work. Now, they are preparing to retire en-masse, and it could create a skill gap unlike anything we've ever seen before.

Talent and turnover inconsistencies

The average tenure at a company has plummeted to 4.1 years per position. Younger candidates are staying in their jobs for shorter times than their older coworkers, too. That means as Baby Boomers make their exits, the speed of turnover will likely increase. BILT sees recruiting, training, and retaining candidates as a significant challenge in the present, especially in key areas of need, like the industrial market.

Reshoring in manufacturing

It's no secret that America's top leaders (especially those in politics) want to bring jobs back home to America. While there are many benefits to this, one unintentional side effect is that it puts a fresh and urgent need on America's industrial sector to provide a skilled workforce in sufficient numbers to meet the sudden surge in demand for "homegrown" products.

These three factors are only exacerbating an already difficult job market. Competitive pressure is fierce as the business world continues to globalize and financial markets draw closer together.

Add it all together, and the need for effective training programs is at an all-time high. Leaders cannot afford to sit back and watch, nor can they blindly trust what worked in the past. They must seek new, more effective ways to keep their workforces effective and productive.

Addressing the issue of inefficient training in today's labor market

If you're a leader considering how to upskill or reskill your workforce to meet current needs and avoid turnover, here are a few suggestions to get you started. Use these to begin creating training initiatives that meet the needs of the modern workplace.

1. Go beyond AI — use XR to improve training

Technology may be creating the need for ongoing training, but it can also be part of the solution. Generative AI, in particular, has made increasingly complex technology understandable for humans who use it. But trainers can go further.

Extended Reality (XR) technology (the blending of the virtual and physical worlds through hardware and digital applications) can bring a greater sense of realism to a virtual training session. It allows trainees to experience real-world environments with unique digital and interactive guidance. According to a recent survey of training leaders, 76% say XR training allows trainees to complete training faster.

HR and training staff should assess the potential inefficient processes and challenges with their current training programs. From there, they should look beyond basic AI tools and consider more immersive XR solutions whenever possible.

2. Create cleaner, more accessible training material

Most trainers are concerned with the right curriculum. However, they often neglect to consider the accessibility and effectiveness of the delivery and format of that information.

It's important to develop clean, thoughtful training materials that are easy for every member of your staff to use as they learn. BILT, for instance, has a range of next-gen guides and 3D interactive digital work instructions delivered via mobile app on iOS and Android and now Apple Vision Pro.. These present information in a visual format and help accommodate different learning preferences and language different learning styles and native languages..

Trainers should start by evaluating the unique needs of their workforce. Then, they should develop their training curriculum using delivery methods and tools that help their participants grasp each technique and piece of information.

3. Carefully consider your learning model

The kind of learning model you use makes a difference. In a world that is simultaneously embracing in-person, hybrid, and remote work, you need to look past specific technological tools. You also want to seriously consider what delivery model works best for your training needs.

For example, you can use synchronous, asynchronous, or blended learning models when training a remote workforce. In-person training also has nuances.

BILT accommodates three different learning styles that are classically associated with different ways people learn. These are visual, auditory, and kinesthetic learners, and they each have different influences on how someone learns in a classroom setting. No one is better than the others, but you want to have all three in mind when training. Optimal results come from a combination of learning techniques because we remember approximately 10 percent of what we read, 20 percent of what we hear, 30 percent of what we see, but 90 percent of what we see, hear and do.

Each situation is different. Corporate trainers should resist a one-size-fits-all instructional approach. Instead, they must evaluate what methodology works best, not just for their brand but for each training setting and individual need.

Improving training, turnover, and operational output

Training is the key to the future workforce. Effectively training workers helps them optimize the tools they use. It improves the quality of their results and maximizes their output.

At the same time, training helps employees feel valued and relevant. This improves loyalty and can help with retention. Lowering turnover indirectly prevents the need for an even greater investment in onboarding and training down the road.

The case for improving the efficiency of corporate training is clear. The question is, what will leaders do about it?

If you're in charge of training at your company, consider the challenges above and how they impact your particular industry and company. Then, review the recommendations and start looking for ways to improve the quality and impact of your training programs so you can set your workforce on a sustainable and effective course for the foreseeable future.

The post The Financial Impact of Inefficient Training: How to Address Turnover, Quality, and Operational Output appeared first on Due.