Scott Lidster talks about how training workforces can benefit everyone in the long term – especially when it comes to retaining employees in a competitive industry.
Off the back of a year that’s seen one of the most hotly contested talent markets in recent history, the money that was thrown around for operators was eyewatering – leading to an increased movement of people who are chasing the mighty dollar. Are the current hourly rates that are on offer sustainable? Who knows?
With that said, not everyone is driven by straight-up cash. For some it can be conditions, for others it can be greater responsibility. What I thought I’d do in this month’s article is spruik the benefits of training your workforce. Not only does it increase their safety, awareness and productivity, but it can be an extremely great tool to help retain individuals too. And did I mention how cheap training is, compared to the recruiting for turnover process?
After 30 years in the industry, from my observation there are a lot of people who thrive on the engagement an organisation can offer, and who see security in a workplace as equal to or higher than an hourly rate. Creating solid training pathways for your employees can tick both of those elements off. Thus, alleviating workforce turnover, which then equates to a stable business and less cash spent on recruiting for turnover. Bingo!
A study conducted by E.L. Goldberg & Associates out of the United States suggests that the real cost of turnover is often estimated to be 33 per cent, or two times the employee’s annual package, depending on the complexity of the position. Approximately 67 per cent of the cost is associated with soft costs — like lost productivity, lost knowledge, and errors — while 33 per cent of this is in hard costs related to recruiting, background checks and temporary workers needed in the interim.
Based on those figures and comparatively speaking, training costs are a drop in the ocean compared to the recruiting process. Depending on what’s being trained, you can expect to pay between $500 and $2500 per day for a trainer to come into your business to help upskill your people.
Let’s crunch a few numbers based on the E.L. Goldberg & Associates study. Say you pay an operator $100,000 per annum and they have chosen to leave your business to head across the road to Honest Joe’s Excavations for a greater opportunity.
It’s going to cost you $33,000 to (33 per cent of their package) to replace him.
Now think about this: let’s say the operator comes to you first and says, “I want to stay if you can provide me with greater opportunity.” So, you engage a training provider whose service fee is $1250 per day to come in and train said operator.
The $33,000 that you’ll drop recruiting for turnover will also buy you 26 days of training!
The value stays inside your company, it demonstrates that you do provide opportunity, and it creates a positive culture that will attract outside talent to your business. Picking up what I’m putting down?
Training is really valuable to all of your business efforts.
For more industry training information, visit: www.australianearthtraining.com.au