The base-level case for training your employees

Train Your Employees

Here’s what we do know: the companies that regularly appear on “best places to work” lists have one major thing in common, and that’s training their employees.

Here’s what we also know: budgets are tight, margins are slim, and most top dogs at companies are probably worried about 2008 recession V2. In those types of economic climates, training tends to fall by the wayside; often the argument is “Why would we spend to train people who might leave, and thus enrich a competitor on our dime?” I get that, although it’s pretty narrow-minded — although in reality, most management theory tends to be.

All jobs (and organizations) are different, but retail is a core industry, at least for America. So what if we analyzed retail research to see if it could teach us anything about the value of training employees?

Thankfully, UPenn did just that, baby!

Start here:

What that showed was that those sales associates who did any training at all were 46% more productive — [they had] 46% more sales per hour than those who didn’t train. Now, does that prove that Experticity is adding 46% value? Not quite. Because these people were not randomly assigned to train. They volunteered. And so the act of volunteering means they’re different from the people who didn’t volunteer. Among other things, they’re probably a little more zealous.

So then we looked at how much of that 46% was due to the individual themselves. How much was due to training? And we could do that because we could compare individuals after they trained with before they trained. And we could compare the individual who eventually trained, but before he or she had any training, to those who never trained. We found about half of the 46% was due to the individuals themselves, and the other half was due to the training. So would the other half, if they were encouraged to train and began to do so, increase their sales by 46%? We don’t know. But 23% is still a big improvement.

Alright, so … 23/46 percent improvement in sales (depending on how you look at it), and take into the account the context of people volunteering typically being a little more zealous about a process, etc.

Now check this, from the same article:

There were two things that surprised us. No. 1 was that the magnitude was so big — 46%, and half of that was due to training. A sales associate who spent an hour on training saw a 5% gain. From the sales associate’s standpoint, being paid on commission, that’s hugely impactful. You take an hour out of your day and you’re getting 5% more commission. Do the numbers, and it’s tremendously beneficial to a sales associate, as well as the retailer.

So 1 hour = 5 percent increase in commission?

If that even somewhat holds up across retail outlets, that’s a huge benefit to the retailer and the sales associate, as the article notes.

This is kind of the same concept behind the construction industry — which you wouldn’t expect, I bet — being a good way to consider happiness at work. A large reason for that? More training and more opportunities for growth.

Ted Bauer