Is The Cost Of Training Staff Too Much For A Small Business?

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Staff will always need training up because there will always be new skills they need. New staff will need to learn the ropes, and then there are updates like new safety procedures, new technology systems, new clients – the list will always be endless. There are also things like trainer training and higher management training that need completing. People who have been away from work through illness will need refresher training too.

Training, despite seeming to be a drain on resources and an interruption for daily business tasks and work that needs doing, is completely necessary. It is necessary because it keeps everybody safe, it enhances productivity, it enhances the organisation skill levels, and it keeps your business ahead of competitors, powerful and motivated to do better.

The Expense Of Training

For most small businesses, a big concern about staff training is the cost. Small businesses may have limited funding so whatever expenses come out of the bank balance have to be really important. Of course, training is necessary so, it has to be paid for. But how do small businesses cope with that? And how do small businesses know how much it will cost?

Before you do anything, you should look into the many Government funding and financial support programmes for startups and small businesses. Although you will need to jump through a few hoops (and lots of questions) to get the money, it will reduce any potential staff training costs massively. You might even be able to get the training for free on some programmes.

If you don't think you're eligible for a grant, or you want a rough idea of how much you should be spending on training, the answer to that isn't easy. It depends on your goals for the training, the skills your employees already have, and where your companies priorities lie. According to a Government report on employer investment in training:

The overall amount of money spent on training in the UK has fallen by £2.5 billion since 2011
The overall amount of money spent on training is over £40 billion but over half of that was on the staff wages of those being trained
According to the overall annual figures, the costs of training work out at around £2,500 per year per person being trained

The same study revealed that the primary training type undertaken by employees is job specific, which means it is absolutely necessary for their position. Also another training course undertaken by many employees is health and safety.

Realistically, the fact of the matter is that if you have staff, there isn't really a choice about whether or not to train them on a variety of things. They need certain types of training to do their job well, and other types of training to be safe and to ensure you avoid hefty fines for breaking health and safety laws. To be cautious, the time you calculate staff training costs needs to be before you employ them, not after, so you know you have the budget to adequately utilise their skills. A staff member with no health and safety training and no training on the job in hand is not going to be beneficial to your company, and may even put it at risk. To further understand this kind of risk, it is important to understand the rules of employee training.

Employee Training Laws

There are many different laws to protect employees when it comes to requiring training for a job. For example, the Health & Safety Law from 1974 and updated in 1999 states that you have to provide any training necessary to ensure your employees are as safe as possible at work. This HSE document describes the law really well. There are also certain laws relating to training and equality that are important to understand. You can read about them on the Equality Human Rights site. There are also many laws protecting people who are dismissed from a job. So if you have dismissed a person because they weren't doing their job right but you didn't provide adequate training, you might find yourself in hot water.

Ideally, before hiring anyone, you will become completely clued up on employment law so you don't end up falling victim to fines and wasting resources. The Chartered Institute Of Personnel Development has a comprehensive page on employment law that serves as an excellent resource for startup owners considering taking on staff.

So, How Much Does Training Staff Cost?

Realistically, the price of training is complex and unique to each company. In some cases, you can roughly price up the cost of basic staff training (hours, trainer costs, resources) and place that in the budget. In other cases, you may have to think more deeply, as it may be that investing in specialist training for a staff member may then cause your business to bring in the costs of training and more as extra revenue. It could help you win a client or, help the company grow. It could even boost the value of your business. Before taking out invoice discounting and other funding types for the initial outlay, you would need to know that the benefits outweigh the risk of investing that initial amount. It would put your business on the line until those training costs pay off.

In all instances, think carefully about training costs and how that training benefits your company. There are always risks and benefits to every financial choice in business, the key is to ensure you've taken an informed decision at every opportunity, so you're always more likely to benefit than lose money needlessly.