Understanding the role of internal and external training in employee development

Utilising the resources at your disposal and building upon the human resources a company possesses is integral to business development. Employee development in the forms of training, qualification and skill development is integral to getting the most value out of your employees and ensuring they remain motivated and loyal. In this article we examine the role of employee development in business and the benefits it can bring to your organisation.

                Initially the benefits can be broken down into a cost analysis to demonstrate the value of employee development. If we use integrated training structures within our organisation we can efficiently build the employees we need and ensure that we fill new positions from within our own organisation. In terms of costs this a much more efficient way of building an organisation as training and qualification costs can be set against employee wages and pay rises. For example, say we want to train a new personnel director. We can hire a fully qualified director for say $40,000 a year. We could train an existing employee over the course of 2 years for $15,000 whilst paying them their standard wage - $20,000. This saves us initially $5,000. However a person trained in house can be then redeployed at a lower wage than we would have to hire an external candidate – say $30,000 a year moving to $35,000 a year after 3 years. This means we save a minimum of $5,000 a year from the point of rehiring. However, the cost benefits are not the only ones worth considering in terms of employee development.

                Employee development may be cost effective but it is also people effective. By this we mean that it will help you retain employees whilst providing career development opportunities and the incentive to continue working with the company. Many employers will make trainees sign a contract forcing them to stay with the company for 1-3 years after they complete their training but often this is unnecessary; as by building people we build their loyalty to our organisation. Career development opportunities are incredibly helpful in employee development and organization development and allow us to engender opportunity and loyalty whilst simultaneously allowing us to pay less for our staffing. It is easy to attract high grade workers to lower bands of payment if we can offer them career development.

                This focus on employee development also has a number of less tangible benefits that many organisations are able to experience. If you select the right candidates for training you can create a much more interlocked community within your organization. Whilst some people respond badly to co-workers who are promoted above them the majority do not – meaning that you can build a better working environment within your office. New staff have a tendency to rub existing staff the wrong way whereas internal redeployment means that your new level employee already has a grassroots feel for your business. Taking advantage of these benefits can most easily be achieved by careful selection of candidates and screening of office environments.

                Overall then the role of employee development is clear; it boasts financial incentives as well as organizational development benefits. Integrating training, qualifications and new opportunities for your employees will help them feel part of your business increasing both value and productivity.