Regardless of the size or type of an industry or business, training can have a measurable impact on performance and the bottom line.

Research shows that productivity increases while training takes place. Staff who receive formal training can be 230 per cent more productive than untrained colleagues who are working in the same role. Source: Smith A., 2001, Return on Investment in Training: Research Readings NCVER (PDF, 359kb)

High labour productivity increases business output and can open a greater share of the market or expand it by improving products, services and reputations.

Successful training is focused on supporting your business objectives.

Staff retention

Training increases staff retention which is a significant cost saving, as the loss of one competent person can be the equivalent of one year's pay and benefits.

In some companies, training programs have reduced staff turnover by 70 per cent and led to a return on investment of 7,000 per cent.

Improved quality and productivity

Training that meets both staff and employer needs can increase the quality and flexibility of a business’s services by fostering:

• accuracy and efficiency
• good work safety practices
• better customer service.

Most businesses provide on-the-job training, particularly during induction. Ongoing training almost always shows a positive return on investment.

The flow-on effect

The benefits of training in one area can flow through to all levels of an organisation. Over time, training will boost the bottom line and reduce costs by decreasing:

• wasted time and materials
• maintenance costs of machinery and equipment
• workplace accidents, leading to lower insurance premiums
• recruitment costs through the internal promotion of skilled staff
• absenteeism.

Staying competitive

Businesses must continually change their work practices and infrastructure to stay competitive in a global market. Training staff to manage the implementation of new technology, work practices and business strategies can also act as a benchmark for future recruitment and quality assurance practices.

As well as impacting on business profit margins, training can improve:

• staff morale and satisfaction
• 'soft skills' such as inter-staff communication and leadership
• time management
• customer satisfaction.

Other references

Doucouliagos, C & Sgrp, P., 2000, Enterprise Return on a Training Investment, NCVER (PDF, 483kb) Blandy, R., Dockery, M., Hawke, A & Webster, E., 2000, Does Training Pay? Evidence from Australian Enterprises, NCVER (PDF, 311kb)