This paper has a sole aim to connect the features of a good training program in relation to other factors like the returns on investment and budgetary considerations in a profit maximizing business. The paper presents that a good training is conscious of the budget, the returns and has its focus on improving productivity and output of the employee base. Through researching on existing literature, this paper will aim to get a better clarification and understanding of the impact good training has on both the employee benefits and the company’s long run agenda.
Training bears various considerable influences on the finances of the company. This is because there are different possible training costs that a company will most likely incur. There are various types of training costs. Among the most common is the direct cost. These expenses are those that must be incurred and cannot be avoided. They include salaries for instructors and facilitators, follow up supervision costs and cost for materials. Another type of cost that may be incurred during training is an indirect cost. These expenses are connected to the output of the worker and their related productivity upon and during completion of a particular training (Ednay, 2001).
On these lines, when the training program is thoroughly completed, the worker productivity is projected to be higher than before. Here, the business will enjoy the related benefits as well as the worker. To the business, there will be an increase in the output per worker as well as their productivity that will boost overall production. To the employees, output enhancement will translate to increases in wages and salary as well as opportunities for growth and development in career (Baker et al., 2012). Companies will measure the returns and costs incurred during training programs to weigh on the amount of investment required and whether there will be adequate returns to this investment.
Adding to the indirect, as well as direct costs discussed above, a significant position is held by turnovers in the amount of investments placed on training by a business. Where there are more opportunities for employee turnover, the probability that the business will make investments in the training program is reduced. A business stands at a complete loss if an employee decides to terminate their relationship with the company right after completing a particular training program. In the light of this issue, an employer must be in a position to make very sound and complex decisions about the degree of investments to make in a particular training program. In the development of a good training program, employers must not only consider the probability for employee turnover but also consider other important factors like the duration of training, relevance, options of payments, specificity of the training program, and the location of the training (Baker et al, 2012).
Analysis of Outcome Variables
There are a number of outcome variables that can be studied about training and the aim of the business in enhancing productivity and worker output. Training achieves a number of benefits to the employer and also to the employee. Variables that relate to wages, performance, satisfaction, absenteeism, motivation and productivity need careful review before implementation of a training program. Such variables have an enormous impact on the returns on investment where the training program is concerned. Development and training literature commonly scrutinize them, and this offers an excellent chance for employers to carry out studies in the said fields. Employee commitment is a critical issue to discuss where training is concerned. Training and worker relationship has an enormous effect on employee turnover.
Employee and Training Investment
Investments in business can be described as the contributions workers make on the present in anticipation that the gains and pay off may be achieved later in a short, medium or long run. These can be further described in lay man’s terms as side bets. In such, training is like a part time job that is not the sole focus of the individual but helps significantly in empowering the person to become better in their core objective. Per se, training increases employee commitment and investment to the business. However, it is not clear how a company comes up with a criterion towards this endeavor. In understanding the said relationship between the returns to investments, the costs incurred and the benefits expected, there is a need to define training in general or specific terms.
General training offers the employee with development of skill applicable today and in the future. It, therefore, focuses on the current employer as well as prospects all over the labor market. An example of general employee training includes general computer skills training, apprenticeship and surgical techniques. Since general skill training offers development in skills used for the whole labor market, employers rarely invest in it. This is based on the premise that in a labour market that is competitive, a worker is paid for individual levels of production. In effect, a business that provides general training to their employees will have to pay them a wage coinciding with the newly acquired skills and the newly enhanced production levels of the employees. A business that goes on to pay employees pre-training fee in rates of pay, risks being beaten by other firms in terms of turnover by firms that offer higher wages. Consequently, general training will lead to an increase in employee turnover. Through payment of higher wages, coupled with incurring costs for the general training, the employer will not be in a position to recover total investment (Ednay, 2001). Due to this, businesses do not need and have no incentive to cater for costs from general training, and this is left for an employee to do so from their own pockets.
Conversely, on the job training that is specific to a particular training increases the productivity of workers and their output in the business. The training is only relevant to the business only and cannot be applied elsewhere in the labor market for instance, operating machines are unique to the company. Additionally, the company is solely responsible for all costs incurred during a specific training. The employee’s productivity for the business is increased since the training offered is specific to the business and therefore only benefits it.
Training has gained essentiality to businesses that seek to gain advantages over other competitors. Additionally, every company that aims to maximize profits must embrace training, and the same has become an essential part towards this endeavor. A proper training is conscious of the budget, the returns and has its focus on improving productivity and output of the employee base. In the development of a sound training program, employers must not only find the probability for employee turnover but also consider other important factors like the duration of training, relevance, options of payments, specificity of the training program, and the location of the training. Forms of training are also a crucial part of the decision-making process as companies must invest in specific training programs so as to increase their returns on investments.
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