In this post, we will compare the benefits of hiring new employees with the benefits of investing in employee training and development. Find out which factors you have to take into account before you make a decision.
When company growth depends on building teams to take on new challenges, the instinct is often to recruit new talent for an injection of fresh energy rather than investing in employee training. Still, while external recruiting still plays a sizable role in HR, it is not always a one-size-fits-all solution—and in light of global economic and political shifts, the future of work is trending towards employee training and development.
Though new team members can sometimes hit the ground running on the newest and most pressing challenges, it can be hard to guarantee a culture fit or to justify investing so much money. On the other hand, experienced team members have already proven their commitment to a company’s mission and culture. Still, it may not always be possible to upskill employees quickly enough to compete with external experts.
While there’s no one simple solution to these challenges, there are distinct advantages to investing in learning and development for company growth in certain situations. To help guide this process, here are things to consider when comparing hiring new talent vs. training current employees.
Corporate Training for Current Employees Saves Time and Money
According to the Society for Human Resource Management (SHRM), the average cost per hire is $4,700. Even when a new hire is very experienced, it can still take a long time to build their proficiency in a company’s preferred systems and company-specific skills.
The cost of hiring and training a new employee depends on the size of the business, but it usually costs more for small businesses than medium or large companies. This is because medium or large companies are more likely to have the capacity to recruit several employees at once and scale the costs of training.
Still, money isn’t the only resource used on new hires—the same report from ATD shows that employers spend an average of 33.5 training hours per new employee. In this area, smaller businesses have a training advantage because there are generally fewer processes and systems to learn.
HR managers and learning and development leads can take from this that when filling a new role, current team members save time by already knowing all the processes and systems—though this advantage may not apply when the new responsibilities are highly specialized (as in the case of a back-end developer or senior designer, for example). In these cases, the quickest path to company growth may be to hire someone from the outside with the right experience.
In either case, the decision to invest in corporate training for current employees or recruiting for external talent depends on the size of your business and the specificity of the position.
Internal Hires Save Time, but Recruiting Brings New Perspectives
To expand on the points above, the extent of existing company growth can also be a factor much like company size. If your business has grown but still has room to go, it may be worth investing in employee training to move your most dedicated team members into leadership positions and hire externally for smaller roles that can free up leadership’s time so they can focus on bigger strategic decisions.
On the other hand, if a company has grown so much that it needs a new head of marketing, it might make more sense to hire someone from the outside with extensive experience as well as the many contacts and relationships they might bring with them.
Another consideration is that while some roles rely more on technical skills, others require strong relationships and contacts. For example, when looking to hire a PR professional, it would technically be possible to teach a current member of your team the skills needed to fit a PR role—but it would be much smoother and easier to hire someone who already knows hundreds of journalists and magazines.
For businesses of all sizes, new staff members can inject fresh energy, skills, and perspectives that can help a team grow. On the other hand, in organizations that have grown too quickly or where roles haven’t been as clearly defined, the perfect candidate may already be within your ranks.
Companies Can Enter New Markets with Employee Training and Development
To break into new, international markets, some hiring managers think they need to reinvent the wheel by hiring external talent that speaks a language at a native level. However, learning and development managers now have another way to close this gap with corporate training via Babbel for Business’s digital language learning platform.
A company looking to expand into the Mexican market, for example, may have a loyal, dedicated employee who is perfectly suited to take on the challenges of the job—except they don’t speak Spanish very well. Rather than finding someone fluent in Spanish, corporate training allows a dedicated employee to improve their language skills and contribute to company growth at the same time.
The cost of corporate language training is likely to be significantly lower than hiring and training a new employee. In situations where company growth depends on international growth, it’s important to not overinvest in new talent if you already have a perfect candidate in your organization. Instead, invest in their one missing language skill and prioritize their training and development.
Learning and Development Boosts Employee Loyalty and Motivation
When a company makes a habit of using corporate training to give employees opportunities to progress, it has a positive effect on the rest of the team as well. On the other hand, bringing in new, external hires when a current employee could’ve been trained to fit the role can be demoralizing and decrease retention.
Allowing your employees training and development opportunities helps significantly in terms of motivating them, increasing their loyalty, and grooming them as future leaders of your enterprise. Corporate training initiatives can be great for team spirit by encouraging healthy internal competition, which can also result in company growth.
While staffing for new roles and challenges always comes with risk, external recruiting is not always cheaper than investing in internal learning and development—both in terms of time and money. For specialized, technical skills, external hires may be the wiser choice. Still, when company growth only depends on someone on your team speaking another language, a platform with specific learning paths and handpicked courses tailored to specific industries to match learners’ professional needs can help them speak with confidence.
Ready to learn more about incorporating a learning platform into your employee development goals? Visit our website to schedule a demo.
