Employee training is an expense or an investment?

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Many employers are finally beginning to understand the importance of employee training. However, if you are one of those business owners who wonder whether the expense of employee development is worth it? Does the investment actually bring you benefits? Don’t worry we got you covered. Let’s explore whether employee training is an expense or an investment. Perhaps, we can convince you to invest in employee development. Check it out.

Executives debating whether employee training is an expense or an investment

As a business owner, you may wonder if employee training is an expense or an investment. There is evidence to support that employee learning keeps employees engaged. Moreover, it helps companies build an internal talent network. Additionally, it can help companies retain the best talent. So let’s dive into the debate whether employee training is in fact a useless expense or a much-needed investment below.

What is employee training & employee development?

Training and development refer to educational activities in a company designed to strengthen the knowledge and skills of workers, providing advice and guidance on how to perform different functions more efficiently and effectively.

Why is important to train your employees?

Training helps firms recruit top performers, increase job satisfaction and morale, increase productivity, and increase profits. In comparison, businesses with actively engaged employees saw 43 percent lower absenteeism and 17 percent higher productivity.

Training and providing professional development opportunities help you hire top talent that is ambitious and motivated. They don’t have to worry about being stuck in a role or position. As they will have a space to grow by learning new skills.

Close-up of blonde young businesswoman giving presentation in the meeting to show employee training is an investment

Why Training Your Employees is an Investment?

Let’s explain why training your employees is an investment not an expense.

When your employee gains knowledge will help you reap the profits

Employee development is not only useful for the employee themselves. The new skills they learn can be transferred over to your company and enrich your company. When you have ongoing training, you are keeping up with the times and this can help increase business success.

Offering employee training builds a positive employer brand

Successful companies have built positive employer branding. One way they have been able to do so is by offering employee training programs. Most individuals are ambitious by nature and want the opportunity to grow their skills. By proving that opportunity you are seen in a positive light because employees don’t have to worry about stagnation. They see you as a progressive business owner who is ready to keep up with the times.

It helps attracts top talent during the recruitment

If you are looking to attract job seekers and gain great employees, you should consider offering employee development courses. Job seekers will look for various benefits such as health insurance, laptops, co-financing for office furniture, etc. Another top benefit they will look toward is employee training and development.

Young people collaborating at meeting building a positive employer brand

It increases retention

If you are looking to reduce staff turnover, investing in employee development & training program is one strategy. Companies especially in the IT industry are constantly struggling to 👉 increase retention 👈. This is because software developers easily become bored. One way to keep them happy is by offering various courses. Through these courses, they can branch out and learn new things.

Higher employee engagement

Internal training can result in higher employee engagement. Employees that are able to constantly improve and grow their skills are more actively engaged in company matters. They will want to contribute to the company, take initiative and do their jobs well.

Keeps your company headed to the future

We have seen this time and time again, where a company that fails to reinvent and stay with the times, eventually has to close its doors. It’s important to invest in new skills and add them as a resource to the company. Using new skills you can offer new services. These new services can help you keep your company headed toward the future.

Some popular examples of companies that didn’t keep up with the times include Nokia. Nokia used to be the number one choice in cellphones but unfortunately, they never made the journey toward touch screens, apps, internet access, etc. in order to maintain their brand in the modern world.


Increases team productivity

If you are struggling with low productivity, you should consider investing in training programs. As one of the many benefits to offer employees, development can help 👉 increase productivity 👈. Employees who are able to grow their skills will be more productive. They will feel more and more like experts, due to ongoing training. Moreover, they will be appreciated that they have the ability to grow their skills or learn new skills.

Hand-create leadership roles

Offering skill development can also help you learn & create internal leaders. You can see who might make a good leader out of your existing employees. This way you can promote internally as opposed to hiring from the outside. Promoting internally is usually less expensive than hiring from external sources, Hiring leaders externally is more expensive as they have more experience and ask for higher salaries.

What are the risks of not investing in employee training?

Believe it or not, there are risks associated with not investing in employee training.

Poor employee performance

Employees that have been in your company longer without the opportunity to grow, may perform poorly. They may be unmotivated to perform as they get nothing out of it. They are looking for their employer to give them more than just a salary. Employees are looking for the opportunity to grow their skills in order to be more performative in the workplace. Poor employee performance may ultimately lead to layoffs, resignations, etc.

Medium shot men carrying box as they are leaving their job

Employee turnover

Employee morale may suffer if you don’t offer training. The feeling of stagnation and being stuck, can lead to an increase in employee turnover. Many employees when they do not feel challenged tend to look for opportunities elsewhere. A company that notes high employee turnover usually signals to the marketplace that something is not right. This can potentially lead to problems in hiring new workers down the road.

Fall beneath market standards

Many organizations stall on growing employee skills, they will fall beneath market standards. Digging in your heels that employee training is an expense and not an investment, may force you to close your doors. In less extreme situations you may just lose the opportunity to gain lucrative projects. You lose the opportunity to take on a certain level of customer.

Different types of employee training

There are some different types of employee training. There are training programs that you offer only to new employees. While ongoing training is offered to everyone. Let’s explore some of these training programs below.


The first type of employee training is the onboarding process. The onboarding process is crucial for any new hires. A strong onboarding will help make new employees feel comfortable in their roles. They will feel comfortable in your company. And if the 👉 onboarding process 👈 is done right, they will want to remain in your company.


Initial training program

Another popular training program is the initial one some companies provide after onboarding to prepare them better for the role. This can be an internal program that helps them learn your in-house custom-built software. Moreover, this can be then learning processes on how to handle customers are various levels. This can be learning certain skills that they were missing but would make them perfect for the role.

Professional development

As a form of ongoing training, or various one-off courses, many organizations offer professional development. Professional development can be in the form of e-learning courses and ebooks. These can also be in the form of mentors. You may send your employee to a workshop, conference, etc. Professional development can take on many forms, you should the best one for your business. Also, the best solution for your employees.

How can I save on employee training, but still gain the benefits?

If you want to gain employees that have the opportunity for skill growth, but without investing in it internally, you should try 👉 IT staff augmentation 👈. When you hire software developers using IT staff augmentation, you don’t have to worry about training. The vendor will provide training programs and professional development courses. The only thing you will have to take care of in this type of hiring model is ensuring that you take the new hire through an onboarding process.

You can save money with this type of hiring model as you only pay the daily rate. You don’t have to worry about the expense associated with training, health insurance, taxes, etc.

Colleagues work in office using computers to learn new skills thanks to professional development

TL: DR; Summary of Is training investment or expenditure?

Let’s summarize whether employee training is an expense or an investment. Most employers are starting to agree that employee training is an investment. Here are some reasons why:

  • When your employee gains knowledge will help you reap the profits
  • Offering employee training builds a positive employer brand
  • It helps attracts top talent during the recruitment
  • It increases retention
  • Higher employee engagement
  • Keeps your company headed to the future
  • Increases team productivity
  • Hand-create leadership roles

The risks associated with not investing in employee development include:

  • Poor employee performance
  • Employee turnover
  • Fall beneath market standards

Now if you want to try investing in various employee training, you can consider some of the following types:

  • onboarding
  • initial training
  • ongoing professional development

If you want to talk about employee development and why you should consider it an investment, 👉 drop us a line 👈. Let’s chat about why you see training as an expense or investment. Did we miss something in our blog post? Let us know.

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