The only thing worse than training your employees and having them leave, is NOT training them and having them stay. -- Henry Ford.
The above quote from Henry Ford still holds true to this day. Successful organizations, invest in training and educating their employees. A few decades ago after employees were hired for a position, they were expected to remain loyal to that company and retire from the same company. Once you were hired, the company offered little to no training or continuing education. If the employee wanted training, he or she had to seek it out in the private sector. Today's workforce is much different, if you don't take care of the employees and meet their educational needs, they will find a company that will. If you don't think corporate training is a big budget item, consider the Wall Street Journal article from October 26, 2012, So Much Training, So Little to Show for It, that reports U.S. firms spent $156 billion on employee learning in 2011. The author reports that internal training is highly ineffective and therefore many organizations today are looking to outside organizations to help train their employees. This approach is the very foundation of strategic sourcing, that of leaving product and service delivery to the experts. If your specialty is building cars, build the best cars you can and leave the training of your employees to the people who specialize in it.
According to a report written by William Bliss, The Cost of Employee Turnover, the costs associated with replacing one employee is about 150% of their salary. This may sound extreme but Bliss takes the following into consideration; the loss of production during the replacement and rehiring phase, recruitment costs, training costs for the new employee, and new hire costs. As you can see these costs add up per employee. While this may be a cost larger companies can absorb, who, especially in the sourcing and procurement space, would want to? Some employee turnover can be expected annually however companies today are finding out that one of the most effective ways to retain employees and keep them satisfied long term is to make investments in educating them and keeping them current on industry best practices. Employees who feel that their company cares about them and is actively helping them become more successful are more likely to remain loyal to that company.
Corporations are always looking for the top talent within the industry. Everyone wants the best employees at their company, and frankly, who wouldn't? The best solution in this case is for employers to look at current employees, especially taking into consideration the statistic of 150% that I used above, and provide them with the training and education they need to be successful, not only in their current role, but also long term.
Training and development opportunities are consistently listed in the top five benefits on lists that employees look for in future employers. Spend Matters, published a report by APQC research specialist, Becky Partida, in which she states that many companies, especially in supply chain organizations are looking to retain their top talent, yet they don't have a formal talent management program for their team. It is essential that teams, especially ones that manage supplier relations, keep their top performers, in order to build long lasting and trusting relationship. Employee turnover, especially in supplier relations positions are very costly in both time and money.
Merck, who was a participant in this Spend Matters study, not only looks at hard skill development, such as, sourcing management processes, risk management and outsourcing, but also soft skills, like project management, cross-functional team development, and change management. Merck, not only offers internal training, they often look outside the organization for training as well. By establishing a formal learning path for employees, companies will not only improve their team, they will decrease the chances of employees looking elsewhere for employment. This is a win - win both for the organization and the employee.
Employees today tend to have a quest for knowledge, and to be lifelong learners; organizations need to keep this in mind, especially when it comes to hiring and retaining top talent. If their current organization won't take the time or spend the money to train them, another organization would be happy to. So in essence, you can't afford not to spend money to train and educate your employees. This is true, especially in sourcing and procurement where there is a known shortage in talent.
Back to the Henry Ford quote from the beginning of this article, it is imperative to the success of your organization to train and educate the employees that make up the organization. If you are given the opportunity to educate and train your employees, you should make it happen. By not doing so, you are putting unnecessary limitations on the team. You want your employees to be the best, most skilled group of people you know, not only is it better for them, it's better for you and better for the organization as a whole. This is not to say the more courses you offer employees, the better. It is important to offer course that are effective, relevant and develop current industry best practices. Creating an environment where training and education are an opportunity, not a requirement, is a win-win for everyone.
Amy Finnila is the Assistant Director of Student Services at SIG University. Her role is to create a successful student experience for all SIGU students. Amy is passionate about education, she is a former teacher and will soon have her Master's Degree in Education with a focus in Instructional Design and Online Learning. If you want to learn more about SIG University please go to the website www.siguniversity.org.