Business | Training

Welcome to the "Training" Chapter!

Hi there! If you’re studying Business, you know that the most important resource a business has is its people. But even the best employees need to learn new skills and polish old ones.
This chapter is all about Training – what it is, why every business needs it, and the different ways companies teach their staff. Don’t worry if this seems technical; we'll break it down using real-world examples!

Why is Training Important in Business?

Think of training like practice before a big sports match. You wouldn't expect a football team to win without practicing their plays! In business, training ensures everyone knows their role and can perform it well, leading to happier customers and higher profits.

Section 1: Why Training is Necessary (The 'Why')

Businesses don't just train people for fun; they do it because there is a specific need. We can summarize the reasons for training into a few key areas:

1. New Employees (Induction Training)

• When a new person joins the team, they need induction training. This is essential 'starter' training that introduces them to the company culture, safety procedures, and their specific job role.
• Analogy: It’s like the first day of school—you need to know where the lockers are and who your teacher is!

2. Changes in Technology or Equipment

• Technology changes constantly. If a retail store switches from old cash registers to a new, automated point-of-sale system, the employees must be trained to use the new machinery effectively.

3. Upskilling and Improving Performance

• Sometimes, existing employees need new skills to improve their efficiency (work faster/better) or to qualify for a promotion. This is called upskilling.
• For example, training sales staff on new persuasion techniques to increase customer sales.

4. Changes in Legislation and Safety

• If the government introduces new health and safety laws (legislation), the business must train staff to comply with these rules to avoid fines or accidents.

Quick Review: The Four Main Reasons

New Starters, New Tech, Better Skills, New Laws.

Section 2: Types of Training (The 'How')

Training generally falls into two main categories, depending on where and how the learning takes place: On-the-Job and Off-the-Job.

1. On-the-Job Training (OJT)

On-the-Job Training means the employee learns new skills while they are actually doing their job, usually at their normal workstation and often supervised by an experienced colleague or manager.

Memory Trick: OJT = On the spot, learning the job!

Methods of OJT:

• Shadowing: Following an experienced employee to observe how they work.
• Coaching/Mentoring: A manager or mentor works alongside the employee, guiding them through tasks.
• Job Rotation: Moving the employee between different departments or roles to give them a wider understanding of the business.

Advantages of OJT:

• Cost-Effective: Usually cheaper, as you don't need to hire external trainers or rent special facilities.
• Relevance: The training is highly specific to the employee's exact role and the equipment they will use.
• Immediate Output: The employee is still contributing to the business output while learning.

Disadvantages of OJT:

• Trainer Quality: The internal trainer might not be a professional teacher, meaning the quality of instruction could be poor.
• Distractions: The employee is easily distracted by the day-to-day demands of the workplace.
• Bad Habits: If the trainer has bad work habits, they might pass those habits on to the trainee.

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2. Off-the-Job Training (Off-JT)

Off-the-Job Training means the employee leaves their normal work environment to receive instruction. This could be at a college, a specialised training centre, or an external conference.

Analogy: This is like going to university or a specialised driving school—you are completely focused on learning without the distractions of the workplace.

Methods of Off-JT:

• Sending staff to external courses or workshops.
• University or college courses (often part-time).
• Role-playing exercises in a dedicated training room.

Advantages of Off-JT:

• Expertise: Training is delivered by professional trainers who are experts in teaching skills.
• Focus: There are no workplace distractions, allowing the employee to concentrate fully.
• Specialist Skills: Can provide highly specialised knowledge that no one currently in the business possesses.

Disadvantages of Off-JT:

• Expensive: Costs include course fees, travel, accommodation, and the cost of replacing the worker while they are away.
• Lost Output: The employee is producing absolutely nothing for the business while they are training.
• Less Relevance: The training might be too theoretical or not perfectly matched to the specific equipment or needs of the business.

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Key Takeaway on Types of Training: There is no single "best" method. Businesses choose based on cost, urgency, and the type of skill they need to teach.

Section 3: The Benefits of Training (The Reward)

Training is an investment, not just an expense. When training is effective, both the employees and the business gain significant advantages.

Benefits for the Business:

1. Increased Productivity and Efficiency

• When staff are better trained, they make fewer mistakes and work faster. This means they produce more output (goods or services) in the same amount of time.

2. Higher Quality Products/Service

• Well-trained employees understand the standards required. This leads to fewer faulty products and better customer service, improving the business's reputation.

3. Better Motivation and Retention

• If a business invests in an employee, that employee feels valued. This improves job satisfaction and motivation. Motivated staff are less likely to leave the company (staff retention).

4. Reduced Supervision Needed

• A competent employee requires less checking and instruction from managers, freeing up the manager's time for other tasks.

5. Flexibility and Adaptability

• If staff are trained in multiple areas (multi-skilled), the business can move them to cover different roles if someone is sick or if demand changes. This increases flexibility.

Benefits for the Employee:

• They gain new, valuable skills (human capital) which can lead to higher wages or promotions.
• They feel more confident and secure in their role.
• Improved career prospects, potentially making them more desirable to future employers.

Section 4: The Costs and Drawbacks of Training (The Challenges)

Even though training is vital, it comes with risks and costs that managers must consider carefully.

1. Financial Costs (Direct Costs)

• Training Fees: Paying external consultants, colleges, or course providers.
• Trainer Wages: Paying the salary of the internal employee responsible for teaching others.
• Materials: Cost of equipment, textbooks, or training facilities needed.

2. Opportunity Costs (Indirect Costs)

• Lost Output: During the training period, the employee is not producing goods or serving customers. This lost time is an opportunity cost—the profit the business misses out on.
• Manager/Trainer Time: The time a skilled manager spends training a junior employee is time the manager cannot spend on their own high-level tasks.

3. The Risk of Poaching (Staff Leaving)

• This is a major concern! A business invests significant money and time training an employee to a high standard. Once they are fully skilled, a rival company (competitor) might offer them a higher salary to move.
• The first business has paid for the training, but the rival company gains the benefit. This is sometimes called the "Brain Drain" or "Poaching Risk."

Common Mistake to Avoid:

Do not confuse the cost of training (money spent on fees) with the lost output (the revenue lost because the worker is away). Both are major concerns for the business.

Final Summary: The Training Decision

Training is a critical decision for any business. It involves weighing the high short-term costs (fees, lost output) against the significant long-term benefits (higher quality, better motivation, efficiency, and profits). Effective businesses see training not as an expense, but as an essential investment in their human capital. Keep up the great work!