Human Capital Investment: What’s the bottom line?

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money spent in training is money well spentWe all know that training is important and clearly a good thing for both employees and companies. But how do you sell the expense of training to your boss?

Human Capital Investment: What’s the bottom line?

The business case for human capital investment (tuition, training course fees, and lost earnings while the employee is away at training) is greater returns to the investing company in the form of higher earnings (resulting from increased productivity, greater proficiency, and reduced turnover).

Sounds pretty straight forward, but what does that mean in dollars and sense?

Returns to the individual – why you want training

Dollars: Higher wages. Employees who attend employer-provided or vocational training courses earn on average 5% more than individuals who don’t engage in training.*

Sense: Trained workers are much less likely to be made redundant, or experience episodes of unemployment than untrained workers.

Sense: Trained employees experience higher levels of job satisfaction than untrained employees.

Returns to the employer – how you get your boss to pay for your training*

Dollars:  Professional and technical training has a 13% return on earnings and this return is a gift that keeps on giving, with earnings effects from employee training persisting for 11 years or more. The returns are even higher for individuals working in an industry experiencing rapid technological progress.

Dollars: Research has found a positive relationship between the magnitude of the investment in worker training, and how rapidly and successfully that employee adapts to new technology.

Sense: In addition to being more efficient at mastering new tasks and technologies, more highly–educated and more highly-skilled workers have also proven to be a direct source of innovation for the companies they work for.

Dollars: Training has a positive impact on productivity and the big win for employers is that the increase in employee productivity from training is more than twice the size of the wage increase that results from training.

How the CALUMO Academy improves your bottom line

Rapid and effective introduction of new technology requires managers to be well-supported by highly-qualified and tech-savvy staff. CALUMO Academy courses focus on developing every student’s technical and analytic skills to increase their productivity and produce higher quality outputs.

Dollars and sense: The earlier you invest in your human capital, the more quickly you will realise your returns: mention this blog and take 5% off of any CALUMO course held in October in either Melbourne or Sydney. Bring a colleague and you both save 10%.

To view our course offerings, please visit: https://www.calumo.com.au/training.html
For more information, please contact the CALUMO Academy on (02) 8985-7777 or
send an email to: training@calumo.com.

* Source:
Blundell, R., Dearden, L., Meghir, C. and Sianesi, B. (1999), Human Capital Investment: The Returns from
Education and Training to the Individual, the Firm and the Economy
. Fiscal
Studies, 20:1–23. doi:10.1111/j.1475-5890.1999.tb00001.x

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