2.5.3

Effective training and development

GCSE Business 2.5.3: how businesses train and develop employees through formal and informal training, self-learning, ongoing training, target setting and performance reviews — and why they do it.

About 12 minutes to read

How businesses train and develop employees

Training means teaching employees the skills to do their current job. Development is broader — preparing them for future roles and responsibilities.

The specification names five approaches.

Figure: Ways of training and developing

Ongoing training for all employees deserves particular attention, because the phrase in the specification is deliberate. Training is not only for new starters. Technology, legislation and customer expectations all change, and a business whose staff were trained once at induction gradually falls behind. That is also why retraining appears below.

Training
teaching employees the skills to do their current job
Development
preparing employees for future roles and responsibilities, which is broader than training
Retention
keeping existing employees rather than losing them to other employers

Why businesses train and develop employees

The specification gives two reasons, and both are worth explaining as chains rather than stating.

The link between training, motivation and retention. Training makes employees better at their jobs, which makes work less frustrating and more satisfying. It shows the business is investing in them, which makes them feel valued. Both raise motivation. Motivated employees are more productive and less likely to leave — and lower staff turnover saves the business the substantial cost of recruiting and training replacements.

So the chain runs: training → competence and feeling valued → motivation → productivity and retention → lower costs. Setting out that chain is what these questions reward.

There is a counter-argument worth knowing for evaluation questions: a trained employee is more attractive to other employers, so training can make it easier for them to leave. The usual answer is that a business which trains staff and then treats them well retains them — and one that refuses to train them keeps only the people nobody else wants.

Retraining to use new technology. When a business introduces new equipment or systems, existing staff must be retrained or the investment is wasted — this links directly to the impacts of technology on production in 2.3.1. Retraining also protects jobs, since staff whose old skills are no longer needed can move to new roles rather than being made redundant.

Worked example

A business installs a new computerised ordering system. Its owner says training is an unnecessary cost because staff will pick it up as they go. Evaluate.

  1. Acknowledge the point: informal learning on the job is cheap, and some staff will manage.
  2. Give the risk: without training, staff make mistakes on a live system — wrong orders, delays and frustrated customers.
  3. Add the investment argument: the system cost money, and its benefits are only realised if staff can actually use it properly.
  4. Add the motivation argument: staff struggling with an unfamiliar system become frustrated and demotivated, and some may leave.
  5. Reach a judgement, acknowledging the cost is real.

Answer: Training is a cost, but skipping it risks wasting the far larger cost of the system itself. Untrained staff will make errors on live orders, frustrating customers and demotivating themselves, and some may leave — which costs more than the training would. The owner is right that training is not free, but wrong that it is unnecessary.

Common mistake

Training is not only for new employees. The specification says "ongoing training for all employees", and an answer that treats training purely as induction misses both retraining for new technology and development for future roles.

Before you practise

  • Training is for the current job; development prepares employees for future roles.
  • Formal training is thorough but expensive; informal training is cheap but can pass on bad habits.
  • Self-learning is cheap and flexible but needs motivation and offers no support.
  • Ongoing training for all employees keeps skills current as technology and methods change.
  • Target setting and performance reviews give direction and identify training needs.
  • The chain: training raises competence and makes staff feel valued, which raises motivation, which raises productivity and retention.
  • Lower staff turnover saves the cost of recruiting and training replacements.
  • Retraining is needed when new technology is introduced, or the investment is wasted.

Now practise it

Reading is the easy half. Answer questions on 2.5.3 Effective training and development and find out which parts you actually know.