Why Training Employees Pays Off Twice

This article was produced by Harvard Business School Working Knowledge and features the insights of faculty member Christopher T. Stanton. Business leaders may question whether training programs are worth the cost and time. Yet evidence from a 16-week program shows that upskilling boosts not just employees’ productivity, but the output of their managers, too. Frontline employees at a Colombian government agency completed 10% more work in the 12 weeks following a targeted training program compared with the year-earlier period. Plus, employees sent fewer emails seeking help from managers, freeing supervisors to complete more work themselves. Beyond improving worker retention and productivity, the hidden value of training lies in how it unlocks managers’ time to focus on strategic work, says Harvard Business School Professor Christopher T. Stanton, one of the study’s coauthors. In this case, the extra time managers gained back amounted to nearly half of the total benefits of the training program. Since previous research demonstrated that “most people turn to their managers for help when they need something,” rather than seek assistance from coworkers, Stanton says he was curious to explore whether training could ultimately save everyone time, making the programs more valuable than many business leaders may realize. Subscribe to the Working Knowledge newsletter to get their research coverage in your inbox every week. Companies invest heavily in training programs, spending roughly $1,200 per worker annually in the U.S., according to the 2023 Industry Report by the trade publication Training. And with generative artificial intelligence reshaping roles and requiring workers at many levels to build new skills, it’s especially important for business leaders to understand the true value of investing in employee development. The article, “Training, Communications Patterns, and Spillovers Inside Organizations,” will appear in a forthcoming issue of the Journal of Political Economy. Stanton, the Marvin Bower Associate Professor of Business Administration, cowrote the research with Miguel Espinosa, assistant professor at the SDA Bocconi School of Management in Italy. Investing in Intense Training Stanton and Espinosa studied the training activities at an unnamed Colombian federal regulatory agency from 2018 to 2019. Participants included 655 employees: 526 frontline workers and 129 managers. The agency selected about 12% of their frontline workers to complete a 120-hour, 16-week training program in late 2018. The program combined instruction in specific skills—such as goal setting, Microsoft Excel proficiency, and effective writing—with core lessons in Colombian legal analysis. The researchers measured employees’ goal achievement scores before the training, between April and June 2018, and compared them to the same period in 2019. They also examined email data for the group, focusing on messages sent from frontline employees to their supervisors. Training Improves Worker and Manager Performance The training proved highly effective: Goal achievement among frontline workers increased by roughly 10% after training. Managers completed 3% more of their goals related to strategic tasks. Supervisors who worked most closely with trained workers benefited the most, boosting productivity by about 8%. An examination of email data explains why: After the training, frontline workers sent fewer emails to their managers—an indication that the training had given them the knowledge and confidence to pursue their work independently. Trained employees enjoyed additional benefits, including career stability and growth. For example, they were more likely than their non-trained counterparts to remain with the organization over the next three years. And they were about twice as likely as their untrained counterparts to receive promotions. Measuring the Value of Training The “spillover effects” of training on managers accounted for nearly 45% of the total benefits of the program. Given the significance of the impact, organizations may want to shift how they assess training programs, focusing not only on the productivity boost for trainees, but on the potential advantages for managers, Stanton says. After all, in cases where untrained workers are constantly tapping their supervisors for assistance, “the question for organizations to ask is: How much time are we going to have to devote for someone higher up in the hierarchy to solve employees’ problems?” Stanton explains. The time-saving benefits for managers made the training remarkably cost-effective. Without the boost to managerial productivity, the organization would have needed to train nearly twice as many frontline workers to achieve the same overall output. That underscores how traditional return-on-investment calculations can dramatically underestimate the true value of training, says Stanton. Upskilling that Ripples Upward The findings challenge conventional thinking about how value flows through organizational hierarchies. While much research has focused on how bosses impact the work of subordinates, the study evaluates the reverse: how strategic investments in frontline workers can ripple upward. By taking advantage of upskilling options that are increasingly scalable with the assistance of AI, organizations could become less hierarchical and workers more self-sufficient, Stanton says. “From a leadership perspective, if you double everyone’s skill, do you need as many managers overseeing them?” he says. “And the answer is almost surely ‘no.’”

Why Training Employees Pays Off Twice

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