According to a TAFE survey, over half of employers (48%) would prefer to hire talent over employee retraining. Surprisingly, 70% of organizations are having a harder time recruiting staff with the necessary abilities. With talent shortages on the rise, particularly in the IT sector, and nearly a third of positions at risk of being automated out of existence in the next 12 years, simply replacing employees isn’t an option.

When a company expands and requires more workers, it is vital to hire. It’s also required when outside experience is required, such as when starting a new department or bringing in a particular skill that doesn’t exist within the organization.

The problem is that many businesses believe that hiring is easier, less expensive, and faster than investing weeks or months teaching existing employees new skills that they are more than capable of mastering. But is this belief true? Does recruitment cost less than employee retraining? Let’s check this out:

Is Hiring Cheaper Than Employee Retraining?

employee retraining

The true cost of recruitment can reach up to half of a person’s income. An employer can lose half to two-thirds of an employee’s annual compensation due to a blunder in the recruitment process that leads to early resignation or firing. Hiring entails expenses like advertising, recruitment fees, interview time and resources, and induction and administrative training — all of which come with no promise of increased production.

Indeed, between 2010 and 2015, the time it takes to attract a new employee more than quadrupled, resulting in average productivity losses and recruitment expenditures of more than $34,000.

So, what do you infer from the above stats? Employee retraining does, in fact, pay off. Retention is becoming increasingly difficult, as younger generations are significantly more inclined to switch jobs than older people. Reskilling and retraining employees are what make a difference. In fact, training is the second most successful technique of retaining employees behind pay and incentives. Organizations that can consistently offer new and feasible avenues for individual advancement will retain employees and save money.

What Is the Value of Lifelong Learning?

According to a recent report, a huge percentage of existing university degrees will become obsolete soon. Professionals are being forced to adapt at a rate that the traditional university paradigm cannot keep up with. Degrees comprised of micro-credentials directly related to the work students desire to accomplish are projected to be the future of university education.

retraining employees

Workplaces will need to mimic this by abandoning the annual review and focusing on employee development as a “lifelong learning” process.

Today’s learners expect the same level of personalized, self-curated, and continuous on-demand learning from a learning platform as they do from Netflix or online shopping. This is critical to giving individuals a sense of ownership in achieving their development goals at their own pace and in a way that keeps them motivated.

Companies will be able to identify skills and competency gaps and give workers the ability to achieve genuine career mobility by retraining employees. This is irrespective of whether they are moving up the ladder, down, sideways, or even making a complete career change within a business. And all this is possible, thanks to a single, cloud-based data model that simplifies and streamlines staff assessment and training within an organization.

Thanks to leaps in technology, learning and development are now easier, more user-friendly, and more cost-effective than ever before!

By now, it is clear that employee retraining and lifelong learning are crucial for organizations to survive in the long run. Let’s now explore seven of the most vital reasons, which prove that retention supersedes hiring:

Why Do Employees Need Retraining?

Let’s now explore the importance of employee retraining and why it is so vital for workplaces — that it has become the new recruiting.

1. Ensuring Gender Equality

lifelong learning

Even though women make up over half of the working population, just a handful make it to the top of the corporate ladder. Despite having higher academic qualifications, women are more likely to be underemployed, working part-time, and earning less.

Embedded gender bias, parental leave provisions, childcare costs, and access to flexible work are just a few of the factors at play. Another issue is that many organizations fail to guarantee that training programs, particularly digital skills training, are suitably customized to and accessible to women.

One of the most effective methods to enhance diversity and equality is to provide access to employee retraining. Instead of focusing on short-term recruitment, companies should examine how they incorporate learning and development efforts to ensure that all employees have equal opportunities to prosper and advance their careers, including equitable access for part-time, disadvantaged, and casual workers.

They should also provide STEM training to employees at all stages of their careers, focusing on women. Too many firms are stifled by unrealized employee potential and a fill-in-the-blank hiring strategy. Individuals and their ability to adapt to change are important to the future of work.

2. Minimization of Employee Turnover

retraining examples

According to the Bureau of Labor Statistics, the number of people quitting their employment voluntarily has increased in the last year, particularly in professional and business services, manufacturing, and retail. Voluntary turnover rates like these have a detrimental influence on your company in several ways.

When you lose an employee, one of the first things you’ll notice is a drop in employee morale. As more employees leave, the remaining employees may have lost a valuable coworker, which is more important than you may believe.

As a result, if one of your employees leaves, your remaining employees’ culture and dedication to the company and their position in it can suffer.

When you have a small team, losing staff also contributes to lower productivity. As the surviving employees are overworked to make up the difference, their stress levels rise, making them less likely to perform at their best.

This kind of drop in staff productivity is also a financial loss for your company. One of the most significant concerns about employee turnover is the financial expenditures of recruiting and training new employees to replace those who have left. While the exact costs of employee turnover vary, there’s no denying that it’s an issue that employers must address.

So, how much does it really cost to lose an employee? The following are the major elements that influence the cost of replacing an employee.

  • Recruiting costs include the expenditures of advertising, interviewing, screening, and recruiting a new employee.
  • The cost of onboarding a new employee, which includes training and managerial time.
  • Lost productivity: It can take a new employee one to two years to catch up to a current employee’s productivity.
  • Employee disengagement: When there are a lot of turnovers, other employees become disengaged and lose productivity.
  • Customer service and errors: New staff takes longer to finish tasks and are often inept at problem-solving.

So, what can you do to keep your employees? The following are some suggestions for retaining employees:

  • Implement a health-benefits plan, such as a health-reimbursement plan (HRA)
  • Compare your employee retention rate to the national average.
  • Instead of relying on guesswork, use proven retention tactics such as a solid employee retraining framework and refresher modules.
  • Please don’t take it for granted that your employees are content (foster a high-feedback environment)
  • Organize exit interviews

3. Addressing the Skill Gap

retraining meaning

With technology advancing quickly, it’s no surprise that the labor market has a skills deficit. But what can be done about it?

According to most IT workers, women could help reduce the skills gap in IT, and experts think women are an “untapped resource.” Women in IT would benefit the industry in various ways, including greater communication skills, teamwork, and increased morale. For example, Apple, Facebook, Google, and Intel are already making progress on this issue. Since then, they’ve promised to increase women’s recruiting, employee retraining, and retention in IT jobs.

L&D teams can focus on retraining employees to fill skills gaps, reduce staff turnover, and add value to their organizations. The number of IT occupations has risen dramatically due to the digital era, cyber attacks on businesses, and new technologies being produced every day.

4. Increased Efficiency

employee productivity

Employees who understand their roles will spend less time on particular tasks and accomplish more while on the job. However, with time, employees may begin to go through the motions or forget what they learned in their initial training, signaling the need for a refresher. On the other hand, employers must know how to successfully train their employees so that they can hit the ground running once they’ve completed their training.

According to Learning Solutions magazine, people forget about half of any new knowledge they learn within an hour, and up to 90% of the material is lost within a week. That means that no matter how skilled a worker is, they will almost certainly require employee retraining at some point to ensure that they are providing the best possible service to clients.

Read More: How To Counter the Forgetting Curve Using Microlearning

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Employers who take the time to go over the specifics of an employee’s duties will reap the benefits of more thorough, informed employees who require less supervision.

Employee retraining has a good possibility of translating into improved customer service, which can assist in boosting customer loyalty and keep customers coming back to the company. Business owners who are concerned about the cost of staff retraining should not let this stop them.

5. Enhanced Adaptability

flexible workplaces

Retraining is a natural component of running a business in the twenty-first century in various ways. As technology becomes a more significant element of day-to-day business operations, owners will need to keep employees updated on the latest technologies in the workplace to keep things operating smoothly. Employees who do not know how to use a cash register or another piece of equipment will slow down operations and irritate consumers who expect quick, polite, and precise service.

Furthermore, retraining employees will reduce the amount of time business owners must watch or assist staff with their responsibilities because they are unsure how to operate store equipment correctly. This will enable each employee to fulfill their tasks on schedule, allowing the company to expand.

6. Boost in Employee Growth

employee growth

Financial growth is the bottom line of any organization. There would be no need for a workforce if one could do it alone. And every employee must be educated. Your company’s growth will be aided by greater employee retraining. Your most valuable employees are aspirational and have room for advancement. By providing them with the necessary training, they will achieve those difficult-to-achieve objectives that only the most brilliant and dedicated staff can.

Companies show their staff that they are appreciated and important by investing in employee retraining. Because training provides employees with access to information they otherwise would not have had, they feel rewarded with a sense of satisfaction lacking among employees at companies with weak training programs. This goes a long way toward helping employees feel valued and fulfilled in their jobs.

7. Increased Consistency

employee retraining program

A well-designed employee retraining program guarantees that staff has the same level of expertise and understanding. When it comes to understanding procedures, products, or services, consistency is critical. A strong customer service training program, for example, guarantees that your agents and reps are more likely to provide clients with a consistent experience. Alternatively, for a sales team, this means that everyone understands how to give a terrific first demo. This is an excellent technique to ensure that all employees are informed of their team’s standards and best practices.

Finally, employee retraining is an excellent method to boost your company’s brand and reputation. Employees want to be able to participate in continual training and development. As a result, by providing various training options, your organization is more likely to attract new talent.

Final Word

Retraining and reskilling your personnel have few drawbacks and many benefits. Despite this, many businesses continue to pass up opportunities to implement initiatives to reduce employee turnover, boost corporate performance, and aid the transition to a more autonomous economy. In a market where millions of job openings go unfilled, as an employer, you must focus on maintaining your best employees and getting the most out of them by providing them with the skills they require to accomplish their jobs.

Furthermore, with technological advancements destined to impact the global economy profoundly, your organization cannot afford to be sluggish to respond. Employees who lack the requisite skills to succeed may put your firm on the verge of bankruptcy as you try to find the knowledge you need to stay afloat.

Ad: PlayAblo’s Enterprise-Grade Micro-Learning platform is built for the corporate learner. Micro-learning, along with assessments and gamification features, ensures learning outcome measurement along with sustained engagement.
Find out more and request a custom demo!

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