Knowledge is Light and Ignorance is Darkness or How to Make Online Employee Training Effective

Every dollar invested in online staff training will save ten times more over the next few years, this is a statistical fact. But, as usual, this is not so simple, there are important nuances that you need to know, so that money, effort and time are not wasted.

The main facts

• 76% of employees believe that professional growth opportunities are one of the most important aspects of corporate culture.

• 87% of millennials (who are now the main workforce in most companies) consider workplace learning and development important.

• 70% of employees are willing to change jobs to move to an organization that invests in staff training. At the same time, the total losses for a company associated with the employment search and integration into the workflow of a new employee to replace a departed one can reach 200% of the annual salary for the corresponding position.

• The average annual training investment per employee in 2020 was $1,111.

• In large companies, training volume has grown from 42.2 hours in 2017 to 102.6 hours in 2020.

• 89% of employees want learning to be available anytime, anywhere, and demand for mobile learning platforms doubled in 2020.

• 60% of new information is forgotten within 48 hours, so training must be repeated regularly.

High dynamism is one of the characteristic features of modern business. It is vitally important for a successful company to keep track of the huge number of changes in the surrounding world and respond to them in a timely manner. The decisive role in this situation is played by education, the acquisition of which has already become a continuous process. Everyone has to learn continuously - both at work and outside the office. This is the knowledge economy. Knowledge is the primary source of money, if you look at the issue globally. At the same time, there is too much data today. Even if you cut off the obvious information noise, anyway, even so much useful information is created that employees of many companies, as a rule, are not able to cope with these information loads on their own.

This is the paradox - every day you need to know more and more, but at the same time, the cognitive abilities of a person, on average, has remained the same as those of the hunter-gatherers of the late Paleolithic. True, unlike ancient people, we have very effective training systems, but we still need to be able to use them correctly, and here difficulties can arise.

Learning as an incentive

What will help keep a great specialist in your company? That's right, money. Although it is clear that salary increases can only rise to some reasonable limit. On the other hand, if an employee receives new knowledge, constantly improves his qualifications, undergoes training, then, accordingly, his skills can be “sold” at a higher price, which should also affect the income of a specialist. But, an interesting sign of the present time is the fact that knowledge becomes a kind of end in itself. For example, according to a large study conducted by the education company Lorman, 87% of millennials (who now form the main contingent of employees in most companies) consider training and development in the workplace important. At the same time, 76% of people believe that professional development opportunities are one of the most important aspects of corporate culture. This same percentage of representatives of generation Y (that is, those born between 1981 and 1996) believe that a company looks more attractive if it offers its employees additional education in the professional field.

Approximately 70% of employees are willing to change jobs to move to an organization known to invest heavily in staff development and training. In addition, people who have recently settled in a new place were interviewed, and it turned out that 86% of them would have remained in their previous job if the employer offered training and professional development.

Research by IBM has also found that employees who do not see tangible career goals in their current organization are 12 times more likely to leave than those who see prospects. And this applies to long-term employees, for those who have just started a new job, the probability of leaving their employer for the same reason increases 30 times. So to say, employees who feel they are mired in a career “swamp” are almost guaranteed to leave their employer as soon as possible). This means that continuous development in the workplace must be ensured from the very first weeks, otherwise new, talented employees will not stay with the company for a long time.

In general, according to the previously mentioned Lorman study, in companies with a developed corporate training culture, the employee retention rate increases by 30 to 50% compared to other market participants.

And this is a remarkable competitive advantage, because today employees are often a company’s main asset, and the search for new qualified employees can lead to very significant costs. For example, according to The Center for American Progress, the total loss associated with finding and integrating a new employee into the operational workflow to replace a departed employee costs 20% of the annual salary for the corresponding position. And this is if we are talking about an ordinary employee. When it comes to highly qualified specialists or managers, the figure rises to 213%.

This data is for the US market, and the situation may vary significantly depending on the specific industry’s characteristics. But according to Gallup's data, the figure to look at, on average, is between 50 and 200% of the annual salary for the position the company is looking to fill. This includes not only direct costs, but also costs associated with reduced productivity, integration of a person into a team, loss of customers, etc. Either way, the numbers are big.

On the other hand, education is not free. True, yes, but its costs are incommensurable with the positive effect that education provides.

The price of knowledge

You have to pay for quality knowledge - hardly anyone will share valuable information for free. If the information is worth anything, then they will still bill for it - now or later, directly or indirectly. Therefore, most companies prefer to invest very specific amounts in employee training.

According to the Training Industry Report, a specialized resource, most companies in developed countries invested about $1,111 on average to train one permanent employee at the end of 2020. This figure differs significantly depending on the size of the organization. For companies with 100 to 999 employees, it was $1,678, for organizations with 1,000 to 9,999 employees it was $581, and for larger corporations it was $924. Based on these figures, it is difficult to identify a trend, but if you look at the situation in a different context, taking into account time costs, it becomes obvious that as the size of the company increases, the unit costs for training a single employee decrease.

In particular, according to the business data company Statista, all large companies in the US over the past three years have dramatically increased their investment in staff training. At the same time, the average training time per employee increased from 42.2 hours in 2017 to 102.6 hours in 2020.


How much time do employees spend on training, according to Statista

There is another significant trend. Despite the growing information load and the importance of educational programs, the budgets that companies are willing to commit to employee development have decreased over the past two years. This has obviously been caused by the consequences of the pandemic and the need to optimize costs. But according to The 2020 Training Industry Report, in 2020, education spending on average will decline by only 1%, while the level of actual wages fell by as much as 18% over the same period (data, again, for the US, but it can be assumed that in other developed countries the situation is similar). It is obvious that companies, especially large ones, are ready to cut salaries rather than disinvest in training.

In order to retain the effectiveness of educational programs and at the same time reduce their costs, companies are increasingly switching to a remote learning format. But even here there are important nuances.

The trend toward mobile education

A few years ago, the most popular training format was lectures, which were held as a personal meeting, where the speaker and the audience were physically present in the same room. However, the pandemic and the total transition to remote work required new solutions, and as a result, more and more training is being conducted online, in the webinar format. So, when compared with 2019, in 2020 (data for 2021 is not yet available), the demand for training in the virtual classroom format, with the presence of a lecturer online, increased by 8% (up to 23%), and the percentage of webinars and trainings conducted using mobile devices doubled (from 5 to 10%). It is also interesting to note that advanced technologies such as virtual reality and artificial intelligence have not been widely adopted on educational platforms as of 2020. At the same time, 54% of companies, after overcoming the pandemic, plan to completely switch to a blended learning format that combines both online seminars and classroom classes.

Learn anytime, anywhere

There is one significant problem - corporate training, which as a rule, is conducted during working hours, takes up productive working hours, all the more, it is quite natural that the same time for classes will not be suitable for everyone. According to a Udemy report looking at the top corporate education trends of 2021, lack of time is the biggest barrier to effective employee training. LinkedIn claims the same thing, stating that on average, almost half of all employees do not have enough free time for effective training. And it takes quite a lot of time.

According to the Lorman study, 89% of employees want training to be available anywhere and at any time, which would allow them to effectively allocate time for work and study. Therefore, 89% of employees want to independently choose their training time in accordance with their personal schedule. In addition, almost all employees want the information they receive to be up-to-date and personalized as much as possible (taking into account the experience, skills and information needs of a particular employee).

The second important point, which is often forgotten, is the so-called “forgetting curve” (as the German psychologist Hermann Ebbinghaus, who discovered this phenomenon, once called it). In short, the bottom line is that over the subsequent 48 hours we completely forget up to 60% of what we learned the day before. This means that the effectiveness of corporate training investment is reduced by the same amount. But, there is a way out - just repeat the training courses from time to time.

What is the result?

Continuous learning is an important part of corporate culture and an effective way to retain employees, especially skilled professionals.

Training does not require substantial investment compared to the positive effect it has on employees and company results as a whole.

However, most employees do not have enough time to attend traditional offline events and would like to have access to personalized professional courses anytime and anywhere, preferably with the ability to view on a mobile device.

In addition, the acquired knowledge must be regularly updated and reviewed, otherwise the effect of training is more than halved.

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Аuthor: Igor Kirillov

*Source: Blog Roi4Presenter