Question

Why is it important that companies invest in training, learning and development? What are the risks faced by an organization that does not invest, or invests minimally in training, learning and development? (understanding)

Answer 1

Today, the business environment has become more competitive than it was ever before. Internet has considerably reduced entry barriers for new entrants in an industry. Therefore, it has made it possible for new and innovative companies to not only enter a business but also flourish at the same time. The business world is evolving at the blink of an eye. The customers have become ever more demanding and the marketing strategies that used to delight them earlier has now become pre-requisites of the business. Innovative products and innovative methods of delivering the products and services has posed severe threats on the existence of the traditional non-innovative organizations. In order to keep up with the change and to help its employees evolve to the increasing demands of the businesses, training, learning and development plays a very important role. Through extensive training programmes, companies can help their employees upgrade their skill-sets and enable them to perform better in their current roles with greater productivity and efficiency. On the other hand, development programmes, as the name suggests, prepare employees for future challenges within and outside the organization by expanding the scope of their role and increasing their knowledge.

The success of an organization largely depends on the ability of its employees to effectively serve the customers of the organization. By investing in employee training programmes, companies can better prepare them with various types of customer queries, ways of handling them and giving highest priority to solving the customer problems. The employees are the face of an organization for the customers and when the employees are well trained and equipped with the necessary tools and knowledge, they are able to create a long lasting impression in the minds of the customers. The leading companies of the world from various industries invests heavily in their human capital. The employees of the multi-national corporations such as “Amazon”, “P&G”, “Microsoft”, “Google”, “Unilever”, etc. have access to the world class training programmes through which they are able to expand their skill-sets not only to suit the needs of their organization but also to grow in their careers.

On the other hand, there are in-numerous risks involved for an organization that does not invest, or invests minimally in training, learning and development. These risks are as discussed below:

Risk of becoming obsolete: An organization that fails to innovate according to the changing market and customer needs is bound to fail in the long run. In any organization, its the employees that makes the innovation happens. But, in the absence of proper training and lack of learning and development opportunities within the organization, employees are not equipped with the sufficient knowledge and skill-set required to induce innovation.

Risk of losing capable employees: For employees today, the learning and development opportunities have become an equally important parameter as is the compensation and benefits. No good, growth-centric employee wants to get stuck with an organization that does not invest in the learning and growth of its employees. As a result, good employees end up moving to the competing organization in search of better growth, learning and development opportunities.

Risk of losing existing and prospective customers: As discussed earlier, the increasing competition has given rise to having more choices for the customers. For any product or service that a customer wishes to buy, there are ample of service providers and product manufacturers available that offers the best quality product or service at affordable rates. The rise of e-commerce companies have drastically reduced the customer loyalty. Wherever the customer will get the best deal in terms of price, quality, delivery, after sales service, etc., he is going to buy from there. That is why, companies must invest in the learning and development of their employees so that not only they can innovate but can also serve customers better by meeting their immediate needs and wants.