How Investing In Training Gives You An Advantage Over Competitors
As the economy tightens and businesses look to cut costs, it's tempting to slash headcount and training budgets. However, this knee-jerk reaction can do more harm than good in the long run. And while cutting costs is important in tough times, slashing your sales training budget is incredibly short-sighted. Your salespeople are the frontline revenue generators - keeping them skilled and motivated is a key ingredient to coming back strong when the economy does recover.
As we continue our blog series The Growth Dilemma, let’s examine the major risks of cutting staff and skimping on employee development during tough times
1. Losing Top Talent and Institutional Knowledge
Cutting training and development makes your company less attractive to ambitious employees. A 2023 LinkedIn Workplace Learning Report found:
• 94% of employees would stay at a company longer if offered skills training
• Companies that invest in employee learning see 24% higher profit margins
According to a 2023 Gallup study:
See related Embracing Change: A Leader’s Perspective).
When you lose talented staff, you also lose invaluable institutional knowledge that's costly to replace.
2. Decreased Productivity and Innovation
Overworked, undertrained employees are less productive. Taking stock of your sales performance and determining “fault” is the job of both the leader and the salesperson. A 2023 Gallup study showed highly engaged teams are 23% more profitable and disengaged employees cost U.S. companies up to $605 billion per year in lost productivity.
3. Lack of Innovation.
Deloitte's 2023 Global Human Capital Trends report found companies that prioritize continuous learning are:
• 92% more likely to innovate
• 32% more productive
• 52% more likely to be first-to-market
4. Damaged Customer Experience and Retention:
Cutting staff inevitably leads to longer wait times, lower-quality service, and frustrated customers. And that leads to lost customers, and we know that losing customers is far costlier than retaining them. According to Invesp,
it costs 5-25X more to acquire a new customer than retain, and expand an existing one.
In addition, Gartner predicts that by 2025 customer service wait times could increase by 40%, and customer satisfaction scores may drop 25% or more.
And the damage doesn’t stop there. Undertrained employees also struggle to meet customer needs. A 2023 Salesforce report showed:
• 76% of customers expect consistent service across channels
• 57% have stopped buying from a company due to poor performance
Why Investing in Sales Training Pays Off During Recessions
While layoffs may provide short-term savings, you'll likely need to hire again when the economy improves. The costs of recruiting, onboarding, and training new staff can easily outweigh any temporary savings. A 2023 Glassdoor study found that the average U.S. company spends about $4,000 and 24 days to hire a new worker. And it takes 8 months for a new hire to reach full productivity.
Cutting training budgets now means higher retraining costs later when you rebuild your workforce. While difficult in the short term, investing in your workforce pays dividends through higher productivity, innovation, customer satisfaction, and retention. The most resilient companies are those that prioritize their people, even in tough times.
1. Gain a Competitive Advantage
When competitors are pulling back on training, doubling down gives your sales team a potent edge. Highly trained reps can outsell undertrained rivals by providing more value and developing deeper customer relationships.
According to a 2023 Gartner study
Well-trained salespeople can better articulate your unique differentiators, overcome objections, and protect your customer base from the competition.
2. Increase Productivity and Efficiency
Recessions require salespeople to work smarter, not just harder. Ongoing training helps reps hone their skills, optimize processes, embrace new technologies, and eliminate time-wasters.
A 2023 Allego report found:
• Companies with superior sales training achieved 17% higher quota attainment
• Reps saved 25% of their time through better sales asset management
More productive reps mean you can do more with your existing headcount, without costly new hires.
3. Improve Employee Engagement and Retention
Investing in your salespeople's growth shows you value them, boosting engagement and retention. Gallup found in 2023 that companies with high employee engagement outperformed others by:
• 23% in profitability
• 18% in productivity
• 43% in organizational effectiveness
Recessions create job insecurity - training demonstrates your commitment to developing talent for the long haul. Replacing a single salesperson can cost 6-9 months of their salary. Continuous learning helps reps stay agile and pivot quickly to evolving customer demands.
4. Accelerate the Recovery:
Companies that maintain or increase sales training spend typically recover faster post-recession. A Brandon Hall Group study found organizations that invested in sales training during the Great Recession saw
37% higher renewal rates and 27% better overall sales performance
Well-trained sales reps can capitalize on pent-up demand and gain market share from underprepared competitors. Proper training also ensures new hires can ramp up productivity faster. While cutting training may provide short-term savings, the long-term costs in lost productivity, opportunities, and talent are staggering.
Don’t let inaction be the villain! Investing in your sales force's capabilities is one of the smartest moves a company can make to power through challenging times, accelerate growth when economic conditions improve, and solve The Growth Dilemma. Curious about how to start? Contact us – we are here to help companies and their people grow.
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