Invest Now or Spend Later?

CFO: “What happens if we train our employees and they leave?”
CEO: “What happens if we don’t train them and they stay?”
Option 3: What happens if we don’t train them and then we have to fire them and start over?

Businesses change. Companies buy other companies, new product lines get added, technology changes the way people work…all of these things can leave your current employees out of date.

You will be better off if you train your current people to take on new roles, rather than just letting them go and starting fresh with new employees.

Why is there a difference? What’s wrong with simply hiring a bunch of new people who already have the skills you need? Why is it better to invest in helping your existing employees make the transition? Well…
 

Long-term employees understand your company

You may be doing something new, but there are still plenty of things from your past that matter. When people understand why you have the policies and processes you have, they are more likely to make good use of them. If your goals have changed, your current employees know what the old goals were and know what has changed, whereas new employees might be confused. Sometimes a “new” idea has been tried before and didn’t work, and nothing has changed since then, so your longtime employees can stop you from going down that path again. There’s a lot to be said for understanding the company and its history.
 

Existing employees have relationships and networks

There’s the organizational chart, and then there’s the way work REALLY gets done. Your employees have developed relationships and networks that allow them to collaborate better, share information, cover for each other when someone is out, and generally be more efficient. If you hire new people, they have to start over, and building useful relationships takes time. Internal, informal networks are valuable, so be careful before throwing them away.
 

Your current employees may have more working experience

If you are hiring people specifically to get new skills, you may be hiring people fresh out of school where they learned those skills. That can leave you with a very junior workforce without a lot of work experience, not just in your industry but in any. It’s one thing to have some new employees right out of school, but it’s very different to have a workforce that’s predominantly inexperienced.

Let’s add one more point: it costs money to hire people. Amounts vary based on the role and on whether or not you use an external recruiter, but it’s not uncommon for even junior service-sector positions to cost you $1,000 to recruit (and that’s in US dollars). You will be spending money to bring in someone less experienced, with no relationships, who doesn’t understand your company. Money well spent, eh? Think how much better off you will be if you invest now in getting your people ready for upcoming changes.

This is not to say you should never bring in new people, of course. Entry-level employees are naturally going to be inexperienced. Fresh perspectives are valuable. People leave, so you need people to replace them. So yes, try to find the right opportunities to bring people in. But don’t put yourself in a position where you are hiring from the outside in bulk, or where you are hiring externally because you have to rather than because you want to.

Training your employees for new skills rather than replacing them with others will give you better performance at a lower cost. Don’t spend money you don’t have to on results you don’t want. Invest in training your people for change.