2.55 Effective Training and Development

A business needs to train its employees if it is to get the best out of them. Training involves teaching an employee a skill or type of behaviour.

The benefits of staff training include:

  • increased skill levels which means that employees are more productive and therefore more efficient, as a result unit costs of production are reduced which means that profit margins are increased, furthermore it can help motivate staff and reduce staff turnover as they feel valued, finally it can help when recruiting externally if candidates know your business has a reputation for training staff


However, training staff can BE EXPENSIVE to provide. There is the cost of the training itself PLUS the lost output i.e. an employee is not producing anything whilst they are being trained. Also, once they are trained they could leave and go to work for a competitor.

Training can be formal (structured and often classroom based) or informal (no structure, where you are simply shown what to do).

Formal training tends to be more expensive than informal training as it can involve using experts from outside the business. Informal training is usually quicker, but the employee can pick up ‘bad habits’ from the person showing them what to do.

Self learning is where you study without a teacher e.g. by watching online tutorials. For example, an employee might decide to teach themselves how to type faster – think about the impact this could have on business costs.

Because business is dynamic, training should be ongoing to keep up with industry changes and new technology.

Performance review is a discussion between the employer and an employee. It usually happens once a year and is a chance for employees to see if they have performed to the required standard and to identify any additional training needs.

There is a link between training, motivation and staff retention as shown in the diagram below:

training motivation and retention

Click here to answer some exam style questions about this topic.