ILX’s Group’s new research reveals that upskilling through learning and development could be the answer to business’ concerns around diminishing revenue and stagflation.
- Companies with comprehensive training programs have on average 218% higher income per employee
- ILX research shows that hiring new leaders and managers costs on average £31,375 and £14,117 respectively in direct fees
- You don’t need to promote vertically for growth; 94% of employees would be happy to stay with an employer who invested in their career development in some way
“The evidence is clear, companies that align learning with the organisation’s objectives and invest in relevant skills, will see improved productivity.
“We have seen this before, following the Dot Com bubble and the 2008 financial crisis – as the economy slows, businesses cut costs, and often there are job losses. But for the employees that remain, improved productivity is the goal; and investing in learning programmes that support the organisation’s strategy is often the key to unlocking employee productivity.
“Even business that over expanded during the boom times are likely to invest in training for staff that they retain.”
Fund managers and investors are Bearish as the market navigates its way through stagflation, with the ONS reporting a 9.6% increase in inflation on the all-item CPIH annual rate. Macroeconomic and Geopolitical factors have put an end to a 127-month Bull Run, with the tech sector being hit particularly hard.
Experts at ILX argue that developing the skillsets of existing workforces is the best way to safeguard businesses in this challenging macroeconomic environment. At a time when cost-saving innovations are necessary, skilled workers are required to implement them. And rather than absorbing the costs of a new hire, investing in existing workforces can both enable businesses to be agile in response to a turbulent financial environment, and help improve employee retention.
Learning and Development
Our analysis shows a strong correlation between L&D and company profitability. On average, the investment into L&D is £42bn each year in the U.K. alone, with an average spend of £1530. Companies that invest in L&D have a 24% higher profit margin than those that spend less on training, according to the Association of Talent Development, and those with comprehensive training programs also have a 218% higher income per employee.
Costs around hiring
The Great Resignation is hitting companies harder than expected with the average cost of replacing an individual employee ranging from one-half to two times the employee’s annual salary. ILX’s independent research reveals a cost of £31375 for leadership replacement and £14117 for employees at management level. These numbers do not factor in training and onboarding, nor do they reflect the time spent learning company processes, tools, and protocols.