Two managers are talking about training their employees. The first asks, “Yeah, but what if we train them, and they just leave?” The second responds, “What if we don’t train them, and they stay?”
You would think that training would be a corporate priority. And yet, it isn’t. If managers know training their employees is good for business, why don’t they do it?
For many companies, the advancing world of digital marketing means investing in employee training. Many training programs, however, don’t always have clearly predictable outcomes, which makes some in business wary of investing in training. Despite much of the struggle to nail down a specific training ROI, what is evident is that training typically results in higher employee satisfaction, reduced turnover, and increased productivity.
How much is spent on training?
A 2017 industry report by Training Magazine found that companies in the U.S. spend $90.6 billion on training, a 32.5% increase from last year. This fast growth in training investment stems from a number of factors, including the continued global economic recovery.
Another commonly cited training investment reason is a digital skills gap. This gap is perhaps best explained through a set of studies completed by Boston Consulting Group (BCG) and Google on Digital Marketing Skills. In the first study, conducted in 2015, the study found the average Digital Capabilities Index (or digital marketing skills) of surveyed companies’ employees was only 57 out of 100.
So what changed in the 2017 results? Unfortunately, not a lot. The average skills score stayed the exact same. In other words, current on-the-job training just isn’t working. It’s no wonder marketing departments continue to put more resources into improved training of digital skills like web analytics, content marketing, SEO, and digital advertising.
Where does all that money go?
Companies spend most of their training budget on industry-specific training. From there, companies spend the most on the following in order from the most dollars spent to the least: management training, mandatory compliance, executive development, and on-boarding.
But training budgets also include training technology and learning tools. For instance, in the 2017 Training Industry Report survey respondents on average spent 11% of their training budget on learning tools and technologies.
Many of these learning tools are also industry specific. For instance, Chris Ross, a research director on marketing management and leadership at Gartner, emphasizes the need for digital marketing departments to train workers in multi-channel marketing, technology, and collaboration, as well as foster business skills and leadership capability.
So why should you invest in training?
On paper, training seems like a high-cost expense with difficult-to-measure ROI. Unlike many marketing or sales ROIs, the return on investment for employee training can be difficult to determine. Often that return is highly specific to the needs of each company and the goals of the training itself. While a lingering desire for a determinable ROI may continue to make some companies wary, rest assured, employee training is worth the investment.
When it comes down to it, high-performing companies simply spend more on training. Why? Because companies that train their employees see increased productivity, reduced turnover (and thus less time training new hires), and ensure their workforce stays on top of the latest technologies. For instance, Fortune 100’s “Best Companies to Work For” list includes companies that typically offer an average of 73 hours of training per employee, as opposed to the average 38 hours at most businesses. Moreover, those same companies also saw a 65% lower turnover rate than their competitors that offered less training. In another study of Sun Microsystems training programs, employees who participated in a mentorship training program were 23% more likely to stay with the company than those who didn’t.
Not only does training decrease turnover and increase productivity, but there is strong evidence that effective training programs can increase company profits. For instance, an expansive study of Nations Hotel Corporation’s training ROI found that for every dollar spent on training $2.21 was returned. Of course, the study openly admits that company-specific nature of determining training ROI, and that those numbers don’t account for other benefits like increased job satisfaction, improved customer service, and improved teamwork.
In the technology driven field of digital marketing, training not only helps with employee satisfaction, retention, and increased profits, but it’s often necessary to stay up-to-date with new software, data analytics, and marketing techniques.
Fortunately, many digital marketing training occurs via e-learning platforms. That means marketers have the ability to access training anywhere, anytime and using laptops, tablets and mobile devices. Not only are many digital marketing training programs easily accessible, but they are quickly updated with the most current trends, like when Google rolls out new SEO algorithms, or when new technologies impact marketing strategies, like new AI platforms. Your investment in training show your hires that you care about their success and they ensure your company stays ahead of the competition. Can you afford to pass on this investment?