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During the pandemic, the economy took a massive hit, and businesses suffered significant financial losses. For many companies, simply not going out of business was considered a win. A year later, with many companies still in survival mode, increasing productivity and revenue is vitally needed. A simple way to accomplish this is by upskilling your workforce.
Many business owners view upskilling as an expense rather than an investment. This mindset can end up costing them big time. Michael Leboeuf, the author of The Great Principle of Management, warns business owners of the dangers associated with ignoring training. He says, "If you believe that training is expensive, it is because you do not know what ignorance costs" [1]. Easily overlooked and undervalued, the cost of untrained employees can mount exponentially. Untrained employees lack the motivation and knowledge to do their jobs properly. This leads to waste and affect customer relations and retention, costing your company money it cannot afford to lose.
Not only does a lack of training affect customer retention, but it also affects employee retention. Not investing in upskilling leads to higher employee turnover rates because employees feel unappreciated, that their role does not matter, and fear their skills and jobs will be obsolete in the near future. This causes employees to look for a company that values them, invests in upskilling, and supports career development opportunities. An IBM study reports that employees who feel they do not have opportunities to develop at a company or fulfill their career goals are 12 times more likely to quit [2].
Turnover from dissatisfaction is not the only issue. The skills gap is widening, and many employees' skill sets are becoming obsolete due to quickly advancing technology. PwC's research shows that in the next decade, one in three jobs is likely to be severely disrupted or disappear due to technological changes. Almost half of all low-skilled jobs and a third of semi-skilled jobs could be affected [3]. The way to avoid turnover and expensive layoff costs is to upskill or reskill the workers you have and utilize them in other roles. Upskilling can save a company at a minimum between 43% and 66% of layoff costs alone, depending on the salary [4]. Train employees with phasing out skills in new digital skills that are needed to fill vacant positions in your company.
Using this approach to fill vacant positions in your company will help your business overcome a significant challenge in today's job market. In quickly advancing industries, finding qualified employees that know how to use the new technology and have the in-demand and required skills is difficult. The global average of difficulty to hire is at 45%. Even with a high unemployment rate, there are millions of jobs that remain vacant. In a recent study, the Korn Ferry Institute calculated that if the talent shortage and skills gap continue to expand as predicted, by 2030, the potential revenue loss could total $8.5 trillion in the USA alone [5]. If you choose to upskill your employees, you can avoid contributing to this revenue loss.
Turnover and recruiting are expensive and should be avoided at all costs. Hiring can cost up to 30% of a job's salary. Almost 70% of organizations report that staff turnover has a negative financial impact on their business. This is due to the cost of recruiting, hiring, and training a replacement and the overtime work required to compensate for the open position. In fact, rehiring costs represent between 12% to 40% of a company's expenses, depending on the turnover rate [6]. Upskilling employees costs a fraction of what companies are losing simply in turnover expenses.
Upskilling is a great benefit to offer your employees, but successful companies do not do this just because it is kind. There is a strategy in providing this service. Today's employees expect growth opportunities. Top priorities for Millennial employees that make a company compelling to work for are career advancement opportunities and excellent training and development programs [4]. Upskilling boosts morale, motivation, and overall employee satisfaction. This increases employee loyalty, productivity, performance as well as revenue for the company. A study by the National Center on the Educational Quality of the Workforce reports that a 10% increase in educational development produced an 8.6% gain in productivity [7].
Upskilling provides an impressive ROI for business owners and is valued by employees. PWC found that upskilling results in an ROI of at least 100%. For every dollar put into upskilling, at least 2 dollars is saved or generated [8]. Companies that prioritize employee development make median revenue of $169,100 per employee. Companies that do not prioritize make less than half of that, at $82,800 [9].
Additionally, according to HR Magazine, compared to companies that invest less, companies that invest $1,500 on training per employee can see an average of 24% more profit. An ATD study also found that companies that offer comprehensive upskilling reported more than twice the amount of income per employee than firms that offered less training. And these companies had a 6% higher return for shareholders when training per employee increased by $680 [10].
Upskilling clearly results in better financial outcomes for businesses who invest in it. It makes sense to spend less and make more by turning your current employees into top talent rather than opting for costly turnover and recruiting methods. Offering a comprehensive upskilling program in-house can be overwhelming and complicated. That is why the best and most cost-effective option is to partner with a company that provides online learning courses custom-tailored to your company's needs.
How Can Your Business Easily Launch an Online Learning Platform to Increase Productivity and Revenue?
Your company can't afford NOT to upskill. Untrained employees hurt the bottom line, and trained employees are loyal to your company and have higher productivity and performance, resulting in a larger profit margin for your company. Outsourcing the creation of an upskilling platform and course curriculum is the easiest and most cost-effective way to provide this needed service.
An online learning platform should include these key features:
This past year has been challenging for businesses, and if employers want to prepare for the future of work and have a successful future, they will decide to upskill their workforce. Companies must look at upskilling as an investment, not an expense, if they want to be prosperous and have a competitive workforce.
Amesite Offers a Single, Easy to Use, Scalable Solution
Launch an upskilling program that increases ROI, loyalty, productivity, and performance and reduces turnover and vacant positions.
Amesite is an easy-to-use, Artificial Intelligence software company that offers customized cloud-based scalable solutions to make world-class content creation easy and seamless. We create custom online learning platforms and content for businesses and universities.
Amesite's online learning platform is the key to providing upskilling programs that will help your company recover financially and get ahead of the competition. Amesite's high-tech AI-powered online learning environment is custom-branded to each specific company to build brand loyalty and meet the unique needs of the employer and their employees. We have subject matter experts who design innovative and custom content for courses that provide excellent value to your employees. A host of self-paced, highly engaging, and intuitive courses can be ready for your company in as little as 30 days.
Amesite creates outstanding learning experiences delivered on its advanced platform, providing an excellent user experience for employees. Using AI and advanced analytics to provide fresh content keeps learners engaged. Coupled with outstanding services, these experiences deepen professionals' interest in subjects important to their company's goals. Amesite's unparalleled retention rate in the enterprise sector is 100%.
Let Amesite help your company level up your workforce today! Request a Demo!
Check out some of our customer success stories: Michigan Works! Southeast, Wayne State University.
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Resources:
[1] Shift eLearning. Dec. 18, 2020. The True Cost of Not Providing Employee Training https://www.shiftelearning.com/blog/the-true-cost-of-not-providing-employee-training Accessed April 12, 2021.
[2] Shift eLearning. Dec. 18, 2020. The True Cost of Not Providing Employee Training https://www.shiftelearning.com/blog/the-true-cost-of-not-providing-employee-training Accessed April 12, 2021.
[3] Shift eLearning. Dec. 18, 2020. The True Cost of Not Providing Employee Training https://www.shiftelearning.com/blog/the-true-cost-of-not-providing-employee-training Accessed April 12, 2021.
[4] PWC. 2020. Preparing everyone, everywhere, for the digital world. https://www.pwc.com/gx/en/issues/upskilling/everyone-digital-world.html Accessed April 12, 2021.
[5] PWC. 2019. The Lost Workforce Upskilling for the Future https://www.pwc.com/m1/en/world-government-summit/documents/wgs-lost-workforce.pdf Accessed April 12, 2021.
[6] Shift eLearning. Dec. 18, 2020. The True Cost of Not Providing Employee Training https://www.shiftelearning.com/blog/the-true-cost-of-not-providing-employee-training Accessed April 12, 2021.
[7] Shift eLearning. Dec. 18, 2020. The True Cost of Not Providing Employee Training https://www.shiftelearning.com/blog/the-true-cost-of-not-providing-employee-training Accessed April 12, 2021.
[8] PWC. 2019. The Lost Workforce Upskilling for the Future https://www.pwc.com/m1/en/world-government-summit/documents/wgs-lost-workforce.pdf Accessed April 12, 2021.
[9] Shift eLearning. Dec. 18, 2020. The True Cost of Not Providing Employee Training https://www.shiftelearning.com/blog/the-true-cost-of-not-providing-employee-training Accessed April 12, 2021.
[10] Shift eLearning. Dec. 18, 2020. The True Cost of Not Providing Employee Training https://www.shiftelearning.com/blog/the-true-cost-of-not-providing-employee-training Accessed April 12, 2021.