New Employee Training - Is It Worth The Investment

Getting off on the right foot

Many companies provide some sort of introductory training or orientation for most of their new employees. It may take the form of an older employee assigned to show the new employee "the ropes." Or it may be left to the HR department or the individual's new supervisor to show them where the coffee pot is and how to apply for time off.

Many organizations, especially in government and academia, have created new employee training that is designed, exclusively or primarily, to provide mandated safety familiarization.

Yet some companies in highly competitive industries recognize the value in New Employee Orientation (NEO) that goes much farther. They require several weeks or even months of training to familiarize every new employee with the company, its products, its culture and policies, even its competition.

There is a measurable cost to that training, but is it worth it? Let's look at some of the issues.

Some Background Facts

The technology in the workplace is changing very rapidly and companies that can't keep up will drop out of competition. A survey by the Ontario (Canada) Skills Development Office found 63% of the respondents planned to "introduce new technology into the workplace that would require staff training." A third of the respondents included " improving employee job performance" and "keeping the best employees" as desired outcomes.

The American Society for Training and Development (ASTD) reports that less than $1500 per employee was spent for training in 1996.

The largest part of that (49 percent) was spent for technical and professional training. Only two percent was spent for New Employee Orientation and three percent on quality, competition and business practices training.

Reasons To Not Do New Employee Training

Even at the less than $1500 per year for training an employee we reported above, it is still a cost.
For some companies, especially those with traditionally high turnover, it can be a major expense. If your profit per employee is less than $1500, it would be difficult to convince the stakeholders that training is justified. Besides, we all know it is the responsibility of the school system to train people to be workers. And it is the worker's responsibility to learn how to do a job so they can get hired.

Why Do New Employee Training

Not surprisingly, all the reasons not to train new employees (except cost itself) are actually reasons to do that training. If you have high turnover, training new employees will make them more productive. They will feel better about themselves and the job. They will stick around longer.

If your profit per employee is less than $1500 per year, you have major problems. You need to start training all your employees, not just your new employees, right away. Show your stakeholders the potential ROI of the training as we will discuss below.

And if you still believe that our schools provide adequate training to make students labor-ready you are living in a dream world. Yes, some job seekers make the effort to learn on their own the skills needed for a new job, but most get that training on the job.

Required Training

Government regulation, insurance coverages, and common sense dictate some training that MUST be given to every new employee.

Other Reasons for New Employee Training

American International Assurance is an ISO 9002 certified insurance company. AIA makes a commitment to training for their staff because AIA "recognizes that the training and development knowledge, attitude and skills of the staff and agency field force are fundamental to its continued efficient and profitable performance.”

Orchard Supply Hardware considers its New Employee Training program important enough to include in their list of benefits for full and part-time employees.

An Interesting Proposal

Dr. Edward Gordon recommends companies make training a stand-alone function, separate from HR. He points out a twenty percent increase in training expenditure since 1983 has not kept pace with the twenty-four percent increase in workers in the same period.
He suggests Training Managers use Return on Investment (ROI) to demonstrate that the training function is a profit center, not just a cost center.


In Dr. Gordon's article cited above, he points out that companies such as Sprint, Xerox, General Electric and General Motors have opted to establish Corporate Universities, reflecting the importance they place on employee training.

The value for smaller companies is arguably even greater. And there is no better time to start employee training than New Employee Orientation.


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