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Training and Development Leads to Higher Productivity and Retention

By: Gregory P. Smith

Greg Smith's cutting-edge keynotes, consulting, and training programs have helped businesses reduce turnover, increase sales, hire superior people, and deliver better customer service. As President and founder of Chart Your Course International, He has implemented professional development programs for thousands of organizations globally. Greg has authored eight informative books including Here Today, Here Tomorrow: Transforming Your Workforce from High Turnover to High Retention and 401 Proven Ways to Retain Your Best Employees. He lives in Atlanta, Georgia. For more information, visit www.ChartCourse.com or call (770) 860-9464.


Usually, the first thing out the window during an economic downturn is training and development. True during recent times as well. . .most companies have cut back on sending people to conferences and looked hard at cutting other expenses. Leading edge companies are still continuing to invest in training and development and will come out far ahead of those other businesses whose only management strategy is to cut, slash and burn.

Training, education and degree completion programs have become one of the most desired employee benefits available. Among younger job seekers, the opportunity to learn new skills is the number one benefit.

Gen. X and Gen. Y workforce view training and development as critical. They value the opportunity to advance and make more money. They also want to make a bigger contribution and have a fear of failing or falling behind in a competitive world.

Satisfying this desire with training accomplishes personal and organizational goals. Well-trained employees are more capable and willing to assume more control over their jobs. They need less supervision, which frees management for other tasks. Employees are more capable to answer the questions of customers, which builds better customer loyalty. Employees who understand the business complain less, are more satisfied, and are more motivated. All this leads to better management-employee relationships.

Last year the American Management Association (AMA) survey of 352 HR executives confirmed that certain enhancement issues were of top importance to employees and improved retention. “Investing in employees’ future is more important than immediate compensation,” said Eric Rolfe Greenberg, AMA’s director of management studies. “Programs that improve work skills and future career development are seen as particularly effective.” The AMA survey identified the following skill enhancement techniques and the percentage of companies employing them as a retention strategy:

Skill Enhancement Issue Used in Organizations
External conferences/seminars 78.1%
Tuition reimbursement 67.3%
Managerial training 66.8%
Company support for degree 62.2%
Interpersonal skills training 56.8%
Technical training 54.5%
Employability training 35.2%

Other facts:
  • In a study of more than 3,100 U.S. workplaces, the National Center on the Educational Quality of the Workforce (EQW) found that on average, a 10 percent increase in workforce education level led to an 8.6 percent gain in total productivity. But a 10 percent increase in the value of equipment increased productivity just 3.4 percent.

  • Another study by ASTD showed that “leading-edge” companies trained 86 percent of employees while “average” companies trained only 74 percent. Leading edge companies also spent twice as much per employee. Companies that invest the most in workplace learning, the study showed, yielded higher net sales per employee, higher gross profits per employee, and a higher ratio in market-to-book values.

  • In a study of more than 3,100 U.S. workplaces, the National Center on the Educational Quality of the Workforce (EQW) found that on average, a 10 percent increase in workforce education level led to an 8.6 percent gain in total productivity. But a 10 percent increase in the value of equipment increased productivity just 3.4 percent.
In addition to better productivity, organizations that emphasize employee development make a lasting impression and earn lasting loyalty. Years ago when I was in the military, I took the time to coach one of my soldiers on getting a college education. We would sit down regularly to discuss his plans for the future. When we were transferred to different organizations, we lost track of each other until years later, when Sgt. White called me.

Sgt. White had taken my advice and gone to college. Now the Army was promoting him, and my interest in his future had made such an impact on him that he wanted me to come to Ft. Bragg, North Carolina to pin on his new rank. This was a great honor. I’ve never forgotten what he told me: “Sir, you were the only officer who took the time to help. I can’t tell you how much that meant to me.”

© Copyright 2001 Gregory P. Smith

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