LinkedIn’s 2025 Workforce Learning Report found that so-called “career development champions” outperform organizations that don’t invest in employee learning and development on a range of positive indicators. Companies that commit to workforce development say it contributes to profitability, employee retention, recruitment, and AI adoption.
For small merchants, employee training can be a win-win for your team and for your business. Training is usually directly tied to anticipated business results: For instance, a company seeking to win more sales leads may offer training in the latest CRM technology. Other employee training focuses on general capacity building in areas like customer service or technical skills. If you’re interested in investing in your workers and your business, these steps can help you start to create an employee training program.
What is employee training and development?
Employee training and development is a company’s investment of effort and time that helps boost the performance of its employees. Training and development are often used interchangeably; however, training refers to a precise program with measurable goals.
For instance, an HR specialist might receive training to use a new compensation and benefits marketplace. Development, on the other hand, relates to acquiring broader skills that can be used throughout a professional career.
Because training and development serve different purposes, many business owners take different approaches to what opportunities they offer in each category.
How to offer employee training
Employee training workshops and courses tend to be directly tied to anticipated business results. Training not only helps companies retain great employees but also creates a pool of talented, well-qualified individuals who can be promoted or replace talent that leaves. Employee training ensures that your business will have the resources it needs to continue growing and expanding.
“According to the U.S. Small Business Administration (SBA), small businesses stand to receive a variety of benefits from effective training and development of employees, including reduced turnover, a decreased need for supervision, increased efficiency and improved employee morale. All of these benefits are likely to contribute directly to a small business's fundamental financial health and vitality,” wrote Inc.
If you’re not sure where to start with employee training, the following tips can help you create a structure that leads to your desired outcome.
Identify a business need
Employee training seeks to fulfill a specific business purpose as well as to provide team members with new skills to further their careers. Consider: What are your goals for the next five to 10 years?
Start by performing a skills gap analysis or surveying managers and employees to see what skills they think are missing. This analysis will answer two key questions:
- What skills will help the company achieve its goals?
- What skills do employees need to do their jobs well now and during the next five years?
Rank each skill you identify according to how important it is to your organization’s priorities, as well as the level of expertise needed. For instance, you may identify “web design” as a key capability needed to expand your e-commerce presence over the next year. But you may also recognize that you will need someone with a high level of expertise—in which case, hiring a contract worker may be better than providing training.
[Read more: Are There Skills Gaps On Your Team? How to Identify and Address Them]
Design the training program
There are many different ways to deliver employee training. Some businesses use formal, instructor-led classroom sessions; others use e-learning. Informal options like mentorship programs and case studies can also be great, affordable ways to develop the capabilities you need. Here are a few other formats to deliver an employee training program:
- Group training activities: Group training can be useful for collaboration, team-building, and brainstorming. It brings together employees to learn together in an environment that benefits the team at large.
- Hands-on training: Hands-on practical training focuses on skills needed for a specific role, such as using a new POS system at checkout or learning a new carpentry skill.
- Management-specific training: Leadership training for your managers might focus on high-level tasks like creating a budget, providing feedback and mentorship to employees, or brainstorming better ways to improve business operations.
- Events and conferences: Events offer an easy way to help employees stay up-to-date on industry trends and regulation changes that may impact your business.
These different types of training can be combined in different ways depending on how your team prefers to learn. For instance, you may wish to have someone complete an e-learning course on the latest changes to the tax code before attending a conference for CPAs, which would reinforce the course objectives.
Measuring training effectiveness can be conducted through 1:1 discussions, surveys and questionnaires, post-training quizzes, assessments, and examinations.Shani Jay, Academy to Innovate HR
Create KPIs
Before you deliver the training, make sure you’re clear on the learning objectives and key performance indicators (KPIs) that will show if the training was effective. Some experts recommend that you wait a few weeks or a month following the training to give employees a chance to test their skills. Plan to solicit employee feedback following the training with questions such as:
- What new tool or skill did you learn from the program?
- How have you applied this knowledge in your daily work?
- What did you like about the program, and what could be improved?
Learning is a process, so you may wish to schedule multiple employee training sessions throughout the year. “Training programs work best in smaller, routine chunks, as opposed to one-time educational blips. Adopt a learning and development culture at your company to prompt all employees to seek personal and professional advancement,” wrote the experts at Workable.
[Read more: 4 Expert Strategies for Training Your Sales Team]
How to offer employee development
Employee development varies slightly from training in that it is continuous and sometimes informal. A mentorship program is one example of how employee development can happen with relatively little effort.
To get started, many small business owners create employee development plans. These plans strategically help each individual develop personally and professionally and are developed in collaboration with the employee.
[Read more: 5 Steps for Creating an Employee Development Plan]
While employee development plans may not be linked to specific business outcomes, they are nevertheless important to the success of your company. Employee development is shown to improve performance, increase flexibility and innovation, and lead to better leadership.
Another plus to consider is that development can be relatively affordable. Development can look as simple as hosting “lunch and learns” or offering opportunities for entry-level employees to shadow executives. Start by speaking to your team members about what they hope to achieve in their career, and then match resources at your company or external opportunities to help each person further their goals.
How to measure training program success
Employee training can be an investment, and therefore, you’ll want a way to measure the ROI of the program you select. Decide how you will measure and assess the program before it starts. That way, you’ll be able to collect the data you need to evaluate its efficacy.
“Measuring training effectiveness can be conducted through 1:1 discussions, surveys and questionnaires, post-training quizzes, assessments, and examinations,” wrote the Academy to Innovate HR.
If you want a more formal approach to measuring success, try one of the five evaluation methods listed below:
- Kirkpatrick’s Four-level Training Evaluation Model.
- The Phillips ROI Model.
- Kaufman’s Five Levels of Evaluation.
- Anderson’s Model of Learning Evaluation.
- Summative vs. Formative Evaluation.
Ultimately, determine the most important outcomes you hope to achieve through your employee training. Do employees feel more confident? Does your turnover rate decrease? Are your teams able to meet deadlines regularly? These are the kinds of KPIs you can set and measure before and after the training.
Budgeting for employee training
There are many costs to factor in when budgeting for employee training. Training materials, instructor fees, and venue costs are just a few line items for which you’ll need to budget. These costs will vary depending on the type of training you choose, the number of employees participating, and the resources you have available.
There is a simple way to estimate your training costs: use the formula, Total yearly salary (per employee) x 1–3% = training budget.
This formula assumes you’ll spend 1 to 3% of each employee’s salary on their professional development. It’s useful as a benchmark, but bear in mind that costs range widely by industry and by company size.
“According to a Training Industry Report, large companies allocated an average of $19.2 million, up from $17.5 million the previous year. Midsize companies saw their average training budget rise to $1.5 million, up from $1.3 million. Small companies, while dedicating a more modest $369,000, still saw an uptick from $341,000 the prior year,” wrote Deel.
Tools and platforms for delivering training effectively
There are dozens of tools that can help deliver training content, track progress, and engage participants in different formats. On one end of the spectrum, a Learning Management System (LMS) can be used to create, manage, deliver, and track training programs and educational content. LMS are often used by schools, universities, and businesses; they are the most complex and robust ways to deliver training.
On the other end of the spectrum, remote work tools like Microsoft Teams, Google Hangouts, or Zoom are accessible, familiar ways to host online learning sessions. With a minimal learning curve, these platforms often include screen sharing, chat, polls, and other engagement tools.
Consider your budget, course format, and the level of engagement your training requires when selecting a tool. An online learning platform like LinkedIn Learning might be sufficient, or you can host in-person sessions using PowerPoint or Prezi slides to assist your presentation.
Offering training and development can help retain great employees and benefit from your team’s growing expertise. Strategic employee training and development can help your business be more innovative, develop great leaders, and prepare for industry trends.
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