Top 6 Reasons You Should Continuously Invest in Your Employees

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If you ask a business owner about the most critical part of their business, they would remark – “It is the sales after all; because this is what brings us revenue.”

But if we go deep, we would see that the same business owner faces a high attrition rate, lower employee morale, huge productivity issues, and almost no employee engagement.

The obvious question would be – why?

Even if the business owner takes care of the most critical part of their business, why there’s so much of disarray in the organization?

It’s because “sales” isn’t the most critical part of the business.

Your “employees” are.

We agree that to a business owner, the lifeblood of their business is revenue generation. But do you think about the humans behind your sales processes? Don’t they matter more than the sales processes? After all, your people will take care of the entire business from bottom to top?

Employees First, Customers Second

Do you treat your customers better than your employees?

If yes, isn’t it like treating strangers greatly by rejecting your own family members?

You have been running a business for quite some time. It means you know what business you’re in. You’re in a business of providing unique values to the customers no matter what services or products you offer.

You also know where this unique value gets created. It gets created on the interface of your employees serving your customers.

So, as a manager, as a business owner, don’t you think your job is to enable, encourage, and inspire your employees to reach their next level?

Well, if you still are doubtful about whether an investment in your employees is a waste of time, effort, and money or not, here’re top 6 reasons that will make you feel otherwise.

Just grab a cup of coffee and let’s get started.

Top Reason # 1: Investing in Your Employees Will Help You Reduce Employee Turnover

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As a business owner, you don’t realize the value of losing a star employee until you lose one.

It’s quite true.

A survey done by go2HR Society indicated that 40% of employees leave an organization if they don’t get any sound learning opportunities.

But why employees leave organizations just for poor learning opportunities?

It’s because deep down every individual wants to grow, get better, and upgrade their skills, and make a difference in their careers and lives.

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And as a business owner, if you don’t value them and their goals, why should they stay with your organization?

Here you should understand the concept of opportunity cost.

Opportunity cost means trade-offs investors/individuals make to avail one opportunity. Since they avail one opportunity, they need to let go of other opportunities.

By deciding to join your organization, your employees are making an investment in your organization. And as a result, they’re letting go of other opportunities they might have had.

When their opportunity cost would be more than the growth and opportunities you provide, they leave.

And if they leave, you need to restart the process of recruitment of new hiring. As a result, it will cost you a lot of money and missed opportunities.

Top Reason # 2: Investing in Your Employees Will Help You Attract & Retain Potential Customers

Have you ever thought who represents your company before your customers?

You’re right – it’s your employees.

They go out, meet your potential customers, talk about your products and services, and by their behaviours, education, skill-sets, the potential customers learn about your business.

Let’s say that you run a restaurant business. And a bunch of potential customers arrive at your doorstep. And since you didn’t teach your employees, they wouldn’t bother to greet them or behave properly with your potential customers.

Do you think these potential customers will come back again?

And the worst scenario would be they would go out and tell their friends how your staff and your employees behaved with them.

As a result, you will lose much more than your cost of investment in teaching your employees.

Have you ever thought about the lifetime value of a lost customer?

Here’s the formula –

Lifetime Value of a Customer = (Annual Profit Contribution per Customer * Average Number of Years That They Remain a Customer) – The Initial Cost of Customer Acquisition

Let’s take a simple example to illustrate this.

Let’s say that a potential customer will give you an annual profit of $10,000. And by your employees’ trained and friendly behaviour, they remain a customer at least for 10 years straight.

Let’s also assume that your initial cost of customer acquisition includes the marketing cost as well as the facilitation cost of your employees. Let’s say your marketing cost is $5000 and facilitation cost is $10,000.

Then, what would be the lifetime value of the customer?

Lifetime Value of a Customer = (Annual Profit Contribution per Customer * Average Number of Years That They Remain a Customer) – The Initial Cost of Customer Acquisition

Or, LVC = ($10,000 * 10) – ($5000 + $10,000)

Or, LVC = $100,000 – $15,000 = $85,000.

Now compare the cost of educating your employees (i.e. $10,000) and the profits you earn from one customer over a lifetime (i.e. $85,000).

It is more than 8.5 times as per our example.

Try this out in your real business. You will understand how much not educating your employees may cost you in the long run.

Top Reason # 3: Investing in Your Employees Will Enhance a Sense of Belongingness & Job Engagement

After all, employees are humans too.

They want to belong; they want to get involved with a purpose that’s bigger than their individual purpose.

As a business owner, your motto is also to make your employees think about your organizational goals more than their individual goals.

But to make them think about your organization, first, you need to fulfil their individual goals.

You need to know each individual’s potential and help them hone it by conducting regular training & development workshops, one-on-one coaching, mentoring sessions, classroom sessions etc.

It may seem an arduous task, but if you think in terms of 10, 20, 30 years, you will see that organizations can’t thrive on quick fixes. They thrive when the people of an organization are so united that together they create a synergy for the organization.

Imagine that you want to grow a plant. If you think that it would grow on its own, will it grow as much as it potentially can? No. You need to nurture it, water it, and take care of it continuously.

It is same for growing your employees. If you don’t nurture your employees, soon they will stop caring about the organizational growth and success.

As a result, there will be no engagement and no feeling of belongingness which eventually will result in absenteeism and later employee turnover.

As per the Workforce 2020 survey, career development and training & education opportunities increase the loyalty of your employees by 34% and 31% respectively.

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The researchers Salanova M, Agut S, and Peiro JM published their research paper “Linking Organizational Resources and Work Engagement to Employee Performance and Customer Loyalty: The Mediation of Service Climate” in Journal of Applied Psychology in the year 2005. In the paper, they found out that training/teaching your employees is a reasonable predictor of employee engagement.

Here’s another stat. According to Gallup, employee engagement affects nine key business outcomes of the company.

Have a look at them below –

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Still, you would think teaching/helping them learn more is a mere waste of time, money, and effort?

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Top Reason # 4: Investing in Your Employees Will Drastically Improve the Performances of Your Employees

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If your employees perform well, you would gain more customers, and as a result, you will earn better profits and capture a great market share in the industry.

But before you decide to educate (upgrade their skills, knowledge, & expertise) your employees, first ask yourself the following questions –

  • The performance gap in our organization is due to the lack of performance of our employees?
  • Do the employees know how to perform that task?
  • Have we provided enough time to the employees to perform the task?

If you don’t ask these questions, even the best-customized teaching modules won’t work.

First, you need to know why you’re not generating the results you would like to create.

Is it because your employees aren’t performing or completely an external, uncontrollable factor?

If you’re noticing the performance gap because of the lack of skills of your employees, investing in educating your employees is the best option.

First, look at the previous performances of that particular group of employees. Find out the performance gaps. Then hire an external consultant to conduct a workshop for the same group of employees.

Hiring an external consultant would be cost-effective for every small business.


It’s because if you want to build a team of trainers and coordinators, you would need to invest hugely in finding the right talents and grooming them to suit the needs of the organizations.

By hiring an external consultant, you will save cost, and your employees will gradually begin to perform as you expect them to.

Top Reason # 5: Investing in Your Employees Will Help You Promote Them to the Higher Rung

As a business owner, you already know the cost of external hiring.

But if you leave out the cost, there are other factors also that you need to consider.

For example, if you hire externally for top positions, there’s always a chance of a mishap. It’s always safer to go for succession planning and choose candidates from your own talent pool who can be promoted in the higher rung.

According to the white paper published by CV-Library, named “What does 2018 have in store for recruitment?” here’re few revelations –

You would see that 33.9% believe that they should go for succession planning while 68.1% feel they should go for direct sourcing.

What we also need to pay heed to is to the people who think building a talent pool for the future is an important task. Around 65.7% believe that they should build their talent pools for the future.

Without the proper and continuous employee education, no organization can build talent pools and even the succession planning will be futile.

Top Reason # 6: Investing in Your Employees Will Eventually Create a Learning Organization

Most business owners realize the importance of building a learning organization quite late. They realize when they’re not able to cope up with the mistakes, errors, low productivity & performance of their employees.

Don’t let that happen to you.

Instead of trying to repair the leaks, try to prepare for the bottlenecks and the contingencies & errors.

How would you do that?

You can do that by creating an organization that promotes learning and creates a commitment within the employee to learn, grow, get better, and perform at their best.

According to Peter Senge, the author of The Fifth Discipline, a learning organization is “where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together.”

To do this, Peter Senge talks about five things an organization should do.

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  • System Thinking: The organization should start building the culture of system thinking. This will help them understand the linkages between the components of interactions within the organization. Conducting regular facilitation for your employees & enabling a learning environment will ensure that.
  • Personal Mastery: Along with thinking about organizational goals, it’s also important to pay attention to one’s own strengths & weaknesses. If an employee improves and goes toward achieving personal mastery, it will also help the organization as a whole. Regular workshops on employee productivity, motivational training, educational programmes, and mentoring sessions will help each employee become their most progressive self.
  • Mental Models: As a collective unit, if an organization understands what mental models are and how we individually and collectively decide on the basis of our own mental model/s, then the whole meaning of learning will change. More and more an organization will get exposed to the mental model training modules, more they will produce extraordinary results as a collective unit.
  • Shared vision: An individual goal is important, but what if a goal can be dreamt by the thousands of people? What if these people think about this dream, this vision, day and night? Well, you need to train them to think like that. From day one, an employee will not share your vision. You need to showcase that in the organization she will be nurtured, she will have ample scope for growth, and she will be able to learn & expand her horizons. And for that, you need to offer her tools and training support. And eventually, she will share your vision too.
  • Team Learning: One person cannot build an organization. You need a team. A team who will support and complement each other. That’s why conducting regular workshops on team learning, team development, group coaching sessions will definitely help.


So what do you think?

Is continuous education of your employees a sheer waste of time?

If as a business owner, you want the continuous growth of your organization, in the long run, investing in your employees’ growth is critical.

Yes, you would have some upfront cost; but if you do it right and hire the right consultant; your return on investment would be much more than 100%.