Yet another reason to initiate a culture of workplace learning: recruiting costs will be lowered, perhaps dramatically.
Companies pay for recruitment advertising — and commissions to inside or outside recruiters — to fill vacancies. Recruiting takes place in the open-job market because employees with specific skills are not available in a current employee population.
It then stands to reason that if an organization were to possess these skills internally, the organization would not need to recruit for those positions in the open market.
By simply training internal employees, companies can avoid the costs associated with seeking out new employees.
This concept is explored in a recent article in Chief Learning Officer magazine.
Besides recruiting, there are other costs involved in hiring new employees, including screening, interviewing, and onboarding a new employee, as well as the potential loss of productivity due to the new employee having to get up to speed on systems and procedures.
The combination of 5.6 million unfilled jobs and a 4.9 percent unemployment rate adds significant urgency to expand the L&D scope.
— Chief Learning Officer magazine
But there is another reason why L&D will lower recruiting costs: retention. Employees who are engaged via learning tend to stay, and companies with engaged employees tend to have lower turnover and attrition rates.
What is the cost of employee turnover? Some studies predict that every time a business replaces a salaried employee, it costs 6 to 9 months’ salary on average. For a manager making $40,000 a year, that’s $20,000 to $30,000 in recruiting and training expenses.
But others predict the cost is even more: losing a salaried employee can cost as much as 2x their annual salary, especially for a high-earner or executive level employee.
Therefore, an organization looking to lower recruiting and related costs can instead invest in learning, development, and training resources.
L&D leaders should uncover recruiting cost savings and attrition rates as KPIs so as to measure the effectiveness of their programs.