Benefits and Costs of Worker Training - Essay Example

BENEFITS AND COSTS OF WORKER TRAINING By Benefits and Costs of Worker Training There has been increased focus on worker training in the recent years with many organizations undertaking programs and policies that facilitate worker training. Although most organizations prefer hiring experienced workers, others prefer taking young people who in most cases do not have experience. However, even with experienced workers there is need for training in order to improve individual performance. Additionally, organizations have different systems regardless of the similarities in operations undertaken. Therefore, worker training at current organization is essential to improve conversance with the systems regardless of the general experience. Moreover, Acemoglu and Pischke argue that worker training is important especially with the ever changing technology in organizations (1999, p.2). In a bid to increase productivity and retain relevance in competitive industries, organizations have to constantly change and adopt to new technology. As a result, workers need to attend trainings on how to effectively use new technology. Studies show that highly skilled workers easily and effectively adapt to new tasks and technology compared to low skilled workers. Furthermore, highly skilled workers were found to be more innovative hence yielding better performance (Blundell, Dearden, Meghir, and Sianesi, 1999, p. 14). This implies that worker trainings ensure that the entire workforce is always in conversance with organization equipment and technology thereby maintaining high productivity. In addition, the basic education attained in institutions of higher learning and other basic education providers is arguably not enough to produce optimum results. As a result, there is need for continued worker training to impact the essential knowledge required for maximum productivity. According to Preffer and Fong a consultancy firm can produce a two-year learning experience in colleges in three weeks (qtd. in Xie and Steiner 2013, p.3). This implies that worker training can be considered more effective than the basic education learnt in schools since people already have first-hand experiences in the course of work. However, this is not to say that basic education is irrelevant but it is to lay emphasis on the need to promote and incorporate worker training in organizations. This is further emphasized by Acemoglu and Pischke who argue that ‘most lines of business require a set of skills that cannot be impacted by the basic education (1999, p. 2). This implies that for maximum efficiency, worker education should be incorporated to fill in the loop holes that may be left by the basic education. Moreover, worker training boosts the morale of employees due to the feeling that the organization has invested in them. Employee motivation is key in attaining the best performance from the workforce. Worker trainings may be done over long periods of time or gradually with regular trainings. Additionally, worker training can be catered for by the organization or by individual workers. However, it is the role of the organization to motivate the workforce to engage in trainings. Regardless of the sponsor, worker training has been proven to increase employee satisfaction and increase commitment to the success of the organization (Batool, A and Batool, B, 2012, p.2). Workforce satisfaction is further contributed by the feeling of conversance that employees get after undergoing trainings. This is because it becomes easier to handle work related pressures and problems that may arise. Furthermore, continued success and improved performance promotes confidence among workers thereby facilitating even better performance. Commitment levels do not necessarily improve the performance of an organization through direct individual performance. Organizational performance can also be due to organization’s ability to retain its employees. This is to say that there will be hardly any cases of employee transfer. As the people work in a given area over long periods of time, they are expected to gain more experience thereby increasing efficiency. This is especially with regard to highly productive workers. No organization wishes to lose some of its best workers hence by creating organizational commitment, they can be assured of reduced worker loss. A research study showed that with increased commitment there was approximately 19 % chance that workers would not look for work elsewhere (Brum, 2007, p.2). The aspect of organizational commitment was further supported by Groot and Brink who argued that organizations that offer worker training improve employee commitment due to increased employability in that particular organization (qtd. in Ashar, Ghafoor, Munir, and Hafeez, 2013, p.4). On a more individualistic level, training increases workers income due to the fact that raising education levels comes with increase salaries. One of the main reasons for workers to engage in training is to get promotions that are accompanied by income increase. For instance, studies focusing on the impact of training in relation to individual income in the UK revealed that there were expected an income rise of between 5 to 10 percent (Blundell, Dearden, Meghir and Sianesi, 1999 p.4). This implies that improving education levels has a positive effect in relation to improving employee salary. However, income increments may differ among men and women and also depending on the area of expertise and the type of training obtained. For example, men who complete at least five O levels get an average return of 21% compared to women’s 26%. However, on advancing to A levels men are expected to get an average return of 13 % against women’s 11 % (Blundell, Dearden, Meghir and Sianesi, 1999 p.4). This shows that there is a difference in impacts of worker training in relation to income increment based on gender lines and levels of education attained. In addition, worker training is important to organizations in reference to recruitments. Effective recruitments are essential and crucial to the success of organizations. This is especially in relation to recruitments for higher ranks. Organizations tend to prefer high skilled workers with experience and some form of conversance with the organization’s system. This is because such workers promote and ensure stability in the organization (Blundell, Dearden, Meghir, and Sianesi, 1999, p.18). There are numerous advantages that accompany internal recruitments such as saving cost, time and a chance to employ people who are already conversant with the organization. Internal recruitments are considered cost effective by many organizations. In partaking internal recruitments, cots are reduced since no extra costs are used up in advertising for jobs. Internal recruitments only require internal advertising that is mainly advanced through use of internal memos and or together internal communication channels depending on the organization. Additionally, internal recruitments may be considered time saving. This is because the number of available potential employees to fill the available position is smaller compared to external recruitment. Moreover, internal recruitments increase chances of getting better and more qualified workers. Since worker trainings are closely related to the operations of the specific organization in play, there are higher chances of getting a more appropriate worker. Moreover, internal recruitments boost the morale of other workers within the organization. This is because recruitments especially to higher positions are mainly awarded to workers with great working records and excellent performance. As a result, employees are motivated to improve their performance with the aim of getting a chance for promotion. The end result of a highly performing work force is the success and improved production of the organization. However, the cost of worker training is relatively high but the returns are arguably similar. The cost incurred for training can be viewed from two different perspectives (Rosholm and Skipper 2009). In the process of incorporating worker training, organizations incur direct costs that arise from charges imposed for training. This may include trainer salaries or in other cases tuition fees. This implies that organizations may opt to introduce worker training sessions in work places where trainers are invited to carry out the trainings. There are other costs also that are incurred indirectly and these include charges that come about due to reduced worker participation during the training. Organizations may also decide to pay for fees incurred by employees in the course of their training. In such a setting, employees may join institutions of their choice and these trainings are seemingly individualistic since they are aimed at advancing a particular area of expertise that an individual would like to advance. This is to say that such trainings are dependent on individual career goals and are not necessarily prompted by organizations. Nevertheless, many organizations have invested more in worker training programs. For example statistics show that US organizations spend approximately $126 billion annually in worker training programs (Aguinis and Kraiger 2011, p.2). This implies that the cost of worker training are relatively high. However, the returns of training workers are significantly high and this justifies the costs incurred. A research study comparing performance of organizations engaging in training against those not engaged in training gave a positive result in in favor of worker training (Arthur, Bennett, Edens, and Bell, 2003). Such positive results have facilitated adoption of worker training programs by many firms with the numbers increasing gradually each year. For example a research by the American Society for Training and Development showed an increase of $135 per employee in 2004 compared to 2003. Additionally, time spent in engaging in training rose per employee from 26 hours in 2003 to 32 hours in 2004 (Brum, 2007, p.1). This shows that worker training is gaining more acceptance and this can be attributed mainly to the success associated with worker training. According to the statistics it is evident that training is not only gaining acceptance in organizations but also from individual employees. In advancing and promoting worker training, issues surrounding who should pay for the training often arise. Worker trainings have benefits to both the organization and at an individual level. This implies that either of the two parties is justified to cater for trainings. However, the greatest role tends to lie on the organizations since they have the role to create a favorable environment for advancing worker training. This mostly applies to trainings that are full time due to the need for organizations to give employees a chance to partake in trainings. Organizations are charged with the role of ensuring job security when workers engage in trainings. Therefore, regardless of who is catering for the training expenses, the organization has a huge role to play. According to Backer’s theory organizations may be discouraged to cater for training expenses due to the fear of losing employees after the training (Acemoglu and Pischke, 1999, p. 2). However, this may considered untrue especially in relation to organizational commitment that accompanies worker training. Conversely, organizations may offer to cater for training expenses such as paying trainers to carry out worker training. In most cases such a scenario is advanced based on organizational terms. This is to say that the organization chooses the departments and skills to advance and as a result employees in those particular areas benefit. In cases where training expenses are covered by the organization, training may be advanced in groups and it is mostly part time. Seemingly the greatest benefactors from worker training are organizations. Although the costs of training may be significantly high, the returns to the organizations are equally huge. Costs related to worker trainings do not only affect current firms of employment but also future firms (Booth and Bryan 2005). This can be attributed to the fact that improving skill levels results to increased income demand. Works Cited Acemoglu, D and Pischke, J 1999, ‘Beyond Becker: Training in Imperfect Labour Markets’, The Economic Journal, Vol. 109, No. 453, pp112-F142. Aguinis, H and Kraiger, K 2009, ‘Benefits of Training and Development for Individuals and Teams, Organizations, and Society’, Annual Review of Psychology, 60:451–74. Arthur W, Bennett W, Edens P, and Bell S 2003, ‘Effectiveness of training in organizations: A metaanalysis of design and evaluation features’, J. Appl. Psychol. Vol. 88, pp234–45 Ashar, M., Ghafoor, M., Munir, E., and Hafeez, S., 2013, ‘The Impact of Perceptions of Training on Employee Commitment and Turnover Intention: Evidence from Pakistan’, International Journal of Human Resource Studies, Vol. 3, No. 1. Batool, A and Batool, B 2012, ‘Effects of employees training on the organizational competitive advantage: Empirical study of Private Sector of Islamabad, Pakistan’, Far East Journal of Psychology and Business Vol. 6 No. 1. Blundell, R., Dearden, L., Meghir, C., and Sianesi, B 1999, ‘Human Capital Investment: The Returns from Education and Training to the Individual, the Firm and the Economy’, Fiscal Studies, Vol. 20, No. 1, pp. 1–23. Booth, A and Bryan, M 2005, ‘Testing Some Predictions of Human Capital Theory: New Training Evidence from Britain’, Review of Economics and Statistics, 87(2), 391-394. 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