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May 24, 2019

Corporate training: impact on business growth, engagement and retention

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A recent survey conducted by Udemy looks at the link between training and business development, as well as a number of key business indicators.

The survey, whose full results can be downloaded, involved a large sample of HR leaders and Training and Development managers.

Here are the main conclusions one can draw from it.

Training and employee engagement

The respondents were asked to assess the level of staff engagement at their company.

The results showed that high levels of engagement were correlated with a significant investment in staff training and development.

As many as 52% of the companies with high levels of engagement offered between 31 and 50 hours of training to their employees in the past year, compared with just 20% of companies with a low level of engagement.

The data also showed that above 50 hours of training per year, the positive effects of further training on employee engagement seemed to diminish.

The same positive correlation with engagement was found both for companies that spend more money on training than the average, and for those which had significantly increased their budget for staff training compared to the previous year.

Training and business growth

Another interesting relationship that emerged from the study was the one between training and a company’s growth rate.

According to the survey results, 55% of companies with a high growth rate (defined as those which had increased their overall revenue by 50-100% over the previous year) had provided 30 to 50 hours of training per employee during the past year, and almost 20% of these companies had provided more than 50 hours of training.

On the other hand, 61% of the companies with a low growth rate (those whose revenue had increased by less than 10% over the previous year) had provided, on average, between 0-30 hours of employee training.

Similarly, 59% of companies with a high rate of growth are spending above-average amounts on training and development per employee, compared to just 18% of low-growth companies.

To sum up, the level of training provided appears to be a powerful driving force for business growth.

Training and staff retention

Somewhat surprisingly, the survey did not find any apparent correlation between the number of hours of training provided and the employee retention rate.

The Udemy research team pointed to two possible reasons which might account for this result.

First of all, career opportunities within the company have a greater influence on the rate of employee retention than training. Even a good training plan might not be able to keep an employee within the company for long if they don’t have any prospect, whether vertical or horizontal, towards which they can direct their career.

Furthermore, the sample for the survey mainly consisted of small and medium-sized companies, which are particularly affected by this problem.

There are numerous other studies that have found a link between investment in training and improvements in staff retention. For example, we would refer you to the data collected by Culture Amp.

Training and e-learning

Udemy also included a number of questions in their survey about the use of online training.

The results showed that most companies (58%) provide “blended” training (partly in a classroom environment and partly online), while 28% provide online-only training and 15% offer training exclusively offline.

The preference for hybrid modes of training shouldn’t come as a surprise.

While online training has a number of advantages that make it more efficient (it can take place anywhere and at any time, and at a lower cost), one should not forget that over the coming years, an aging workforce and the presence of several generations of workers at the same company will provide an extra push towards using a number of different and personalized training methods.

The ROI of business education

Calculating the ROI of corporate training can be a very difficult task if one is using tools that are unsuitable for the job, and, for most companies, this remains at the level of wishful thinking rather than reality. In Italy, this is one of the many reasons why investments in the area of training are limited.

Most of the companies that took part in the Udemy study claimed to be very satisfied with their ability to calculate the ROI for training activities—however, in reality, they are doing it in a very rudimentary manner.

For the most part, they are using metrics that are confined exclusively to the first level of the Kirkpatrick model: the level of employee satisfaction with the courses provided.

The Kirkpatrick model is a hierarchical model designed to evaluate the effectiveness of a training program, and has four levels, each of them building on the previous one:

  • Reaction (the employees’ opinion on the courses they attended)
  • Learning (tests to evaluate what they have actually learned)
  • Behavioral Change (the effect of what they have learned on their work)
  • Organizational Performance (the ultimate impact on the business)

Any metric that doesn’t go beyond the level of merely measuring employee satisfaction with the training courses is obviously unable to offer a reliable estimate of the actual ROI.

The simplest and easiest way to organize training within the company and track the real ROI is by using training management software.

These platforms allow you to track, integrate and analyze all data related to company training, preparing reports on the costs incurred, the skills acquired, the attendance rates, the grades, etc.

Reliable information on the effectiveness of the training plan is the best possible tool for HR management to be able to argue for the continuation, or the increase, of the company’s investments in this area.

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