Effective employee training is both an important part of the initial hiring process and an ongoing part of developing your small business's employees. When your employees are well trained, they are happier, work more efficiently and make fewer errors, meaning your business benefits from satisfied customers and higher profits. However, the effects of lack of staff training can cause significant damage to your business's finances and reputation. In some cases, you might even find your company in legal trouble.
One of the most noticeable effects of a lack of staff training is that workers become less productive when they do not know how to do their jobs properly. Untrained workers may have to stop what they're doing to ask for help from a manager or colleague, and this lost work time can add up. If an employee makes a mistake manufacturing a product or entering a transaction into a computer, more time gets wasted to redo the task.
Lower productivity leads to lost profits for the business as well. Not only will it take more paid work time to successfully complete a task, but replacing wasted materials can take a bigger bite into the company's profits. The financial impact is even greater when your employees make repeated mistakes or break expensive equipment due to a lack of training.
Lack of training leads to lower quality products and services. Even if an untrained employee can finish his work as quickly as his colleagues, the finished job may have more defects or careless mistakes.
For example, a poorly trained employee may not know how to operate an important machine properly or know what kinds of flaws to look for in the finished product. If this goes undetected, the low-quality product might go straight to consumers if your business does not have a separate quality-control process.
In some cases, poor-quality work from lack of training can have an immediate negative impact on customers. For example, if your business does not train its customer service employees in the checkout processes, your employees might enter the wrong transactions, give customers back the wrong amount of money or otherwise leave a bad impression of the company. After experiencing this poor-quality service, your customers may take their business elsewhere and encourage others to do the same.
Not training your employees can also put them at greater risk of workplace accidents and can put your company at risk of lawsuits and fines. Not training them on how to safely move heavy items, climb ladders, use dangerous machinery or handle chemicals can lead to workplace injuries for which your company ends up having to pay. In the worst cases, the lack of training can even cause an employee's death.
Keeping employees safe is an employer's duty regardless of the company size. The Occupational and Safety Administration offers safety guidelines for businesses and charges steep penalties for companies that put employees at risk. These fines can be in addition to any lawsuits and workers' compensation claims you must handle due to incidents.
A lack of employees in a business due to increased turnover and lower employee morale is another negative effect of a lack of training. Employees who don't feel confident performing their jobs and who make frequent mistakes become discouraged and may feel that your company doesn't care about them. Not only will your employees care less about being productive, but they may consider looking for work at another company with a better environment.
The effect of a lack of employees from turnover is the need for costly recruitment to replace them. Not only will you have to spend time finding new employees, but the hiring process can be very expensive for your business.
SHIFT eLearning estimates that it will cost your business as much as 30 percent of your replaced employee's pay to find someone to replace him. This is compared to as little as a few hundred dollars offering basic training to help him improve his work quality and performance.