Company-Paid Employee Training: The Advantages & Disadvantages

Importance of Training

The emergence of technology-centric knowledge organizations has raised the importance of human resources. The quality of the human resources of an enterprise becomes the critical distinguishing factor among firms, and as such, firms compete with others to attract and retain talent.

Companies invested in the training of their employees even before the newfound importance of human resources. In the new context, this intervention has assumed even more importance. Company-based employee training is now an indispensable tool for organizations wanting to develop leaders for the next level of growth.

Image Credit: flickr.com/aflcio

Advantages

Company-paid employee training offers many advantages for both the organization and the employee.

For the employee, company funded education and training ranks among the most valuable long-term benefit offered to employees. It enables the employee to further their education, develop skills, and enhance competencies, invariably translating to all-round development of the individual and better performance at work, which in turn translates to career advancement. All this comes at no additional cost from the employee’s side.

Companies usually sponsor training programs most suited to their needs, and this ensures that their employees obtain specific knowledge or skills required to excel in their jobs. Employees training themselves tend to focus on generic skills that may not be relevant for the company-specific work.

Trained employees require less supervision on the job and gain competence to adapt to new technologies and theories in the workplace. Employees competent in their specific work domain also boost productivity and increase motivation.

Company-paid employee training is also one of the ways to retain talent, and this works in many ways:.

• The company, by sponsoring the training, can enter a contract with the employee requiring them to serve the company for a specified period, thereby reducing employee turnover.
• Even without the company specifying a contract, the trained employee has a moral obligation not to walk out of the company that sponsored his or her education or training.
• The prospect of further paid training encourages the employee to remain with the organization.

Inculcating organizational commitment by sponsoring training becomes an invaluable asset for the company in today’s business environment where human resources has become the major source of competitive advantage and the hunt for talent has reached cut-throat levels.

Disadvantages

Most companies, when sponsoring employee training, confine the topics to those which serve the company’s short-term interest. This goes against the long-term interests of both the employee and the company. The employee loses out on acquiring generic and broad based skills, and the company loses out on the opportunity of an employee using fresh knowledge to energize the organization out of the shackles of conventions by applying creativity and innovation.

Employee training provides the company with many benefits, but it can also cause financial strain for some companies. Employees taking time out for training on the company’s time and expenses may cause a short-term drop in productivity and create disruptions in the work schedule.

A bigger danger of company sponsored training is the discontent of employees not offered this benefit. Unless the company offers the training to all employees, a selection criterion that is not only objective but also seen as objective remains essential to prevent loss of morale, discontent, and consequently low productivity and high turnover from other employees.

Finally, the assumption of employees remaining loyal and committed in return for the company sponsoring the training need not always hold true. Contracts that bind the employee to remain with the company might not be legally enforceable, and the only option for the company might be to recover the training expenses from the employee.