Employee Training: is it an expense or an investment?

Written by SeekLMS Correspondent on 25 October 2021

Employee Training:


The effects of the 2020 pandemic, as is generally known, not only affected the health issue but also economically.


Millions of people around the world were suddenly unemployed. And thousands of businesses closed their doors, some never to reopen them. And, India or United States was no exception.


The Ant and the Grasshopper

In Aesop's fable, "The Ant and the Grasshopper," the Grasshopper (which some editors paint as a kind of grasshopper), enjoyed the summer and the abundance of food and cared for nothing else; while the ant worked hard to store food for the winter.


And well, to summarize the story, I will tell you that the Grasshopper made fun of the ant for his hard work and continued in the "Fable and counter-fable". When winter came, the ant had a good time, having good shelter and plenty of food. Instead, the Grasshopper died of hunger and cold. As a moral, it lets us not wait for winter to start worrying about our destiny.


The Coronavirus pandemic.

Speaking of winter, now, let's look at some cold data:


With the coronavirus pandemic, for the month of May 2020, the unemployment rate in the United States scratched 15%. Reflecting a loss of 20.5 million jobs in that country. For the month of June 2020, the unemployment rate exceeded five percentage points, and informality was increasing. In addition to the lost jobs, thousands of businesses closed, and many of them ceased to exist. Something that nobody expected.


What is it like to look for a job in such a situation?

Well, perhaps bitterly, you already know it, or you imagine it: It is very, very, difficult. For the same vacancy, there are figures of around 750 applicants or more against whom you have to compete (a real war, if the comparison is allowed).


The line is long, and the vacancies few. And that's when we "drop twenty" of what we have stopped doing and passing, (like the Grasshopper).


When we see the list of requirements that companies request, and when we review our CV, we feel disarmed:

Masters, doctorates, specialties, certifications, broad mastery of this, broad mastery of the other, English (ah, but advanced), years of experience in this or that position, etcetera, etcetera, etcetera.


And also age. Yes, age also plays a role in the equation. Because, the older the age, the greater the stock of knowledge should be, and the better prepared we should be (although, unfortunately, this is not always the case), because the labor funnel narrows more.


If in itself, the job search under normal circumstances already represents a challenge, in adverse situations I do not need to tell you how it is, or you can intuit it.


The Art of War


Sun Tzu, said something very interesting, in one of the postulates of his work: "The Art of War", that we came to collation with what we have been talking about and that I am going to allow myself to quote below:


"To endure or fall, survive or disappear, depends more on what you do to yourself than on what the world does to you." Oh, and here's another one:

"Invincibility is in oneself, the enemy's vulnerability, in him."


The work of Sun Tzu, originally written with military motifs, gives us life lessons that we can transfer to many areas.

So how could we tie it in labor terms? Well, just like you're thinking about it. Be better prepared than the other, (which also requires the same position), because this is war ..., or well, something similar.


Companies and the impact of the crisis:

Now let's look at the other side of the coin; Let's go to the field of people ... moral.


What about the companies that were forced to liquidate personnel during the pandemic? How to fill the spaces that were left for those that left? As they say out there: How to do more with less?


An alternative is with the training of those who stayed. However, this should also not be viewed as "the last thing we have to do, in case of." Training is like Aesop's ant summer. You have to work continuously on that.

It has to be sown at the right time to harvest later, and have food during the winter.


So that brings us to the next question:


Industry training, is it an expense or an investment?

After having reviewed Aesop and Sun Tzu, I think we already have it a bit clear, however, to understand this question well and issue an adequate answer, let's enter the field of the technical, the accountants, and the financial ones, then.


First, we have to define the concepts of spending and investment:


Spending:

An expense is an outlay made to pay for a product or service. There is no return on money. In accounting terms, it is called an expense or expense because it implies the non-recovery of the cash used for those purposes.


Investment:

An investment, unlike an expense, seeks, in addition to the recovery of the capital used, to increase it.

However, any investment involves a risk, which is often worth taking. If the number turns out well, it was an investment, if it turns out badly ... an expense.


If we consider that, in general, every business organization (large or small) has human capital with great potential for job development, then the concept of investment in training becomes relevant.


Why? Well, because, by investing in training your workforce, you will have the promise of having employees better prepared and updated in terms of knowledge and skills, with the consequent benefit of being more productive for the company.


However, business training (and even personal), far from seeing it as an expense or an uncomfortable obligation, should be considered as a necessary investment for the growth of any organization and its members.


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