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Why Employee Training for Plastics Manufacturers is Critically Important

Whether you are an injection molder, an extrusion processor, blow molder, or thermoformer…

… your company’s approach to employee training is either facilitating your growth or hindering it. It’s that important.

Motherhood employee trainingEmployee training is thought of similar to “motherhood” and “apple pie”. Who would possibly be against that? (and Happy Mothers Day to all the moms; it’s just 2 days away as I write this). Pretty much every company agrees that employee training as a concept is a good thing. They may not apple pie employee traininglike the time or expense, but they know it’s the right thing to do.

But when you ask those same companies how much money they spend on employee training each year, you see very quickly that there is a disconnect between their view of its importance and their willingness to spend money on employee training. Now before I get hate mail, let me say that there are many, many very successful plastic’s manufacturers out there that do training right. And they reap the rewards. But that is not the norm.

According to a study done by Training Magazine, companies that spent approximately $273 per employee per year on training averaged a 7% voluntary turnover rate,

…while companies that spent about $218 per employee per year averaged a 16% voluntary turnover rate – 100% more turnover.

According to a recent study of 540 companies done by the American Society for Training and Development (ASTD), those companies that invested more in training realized a 37% higher gross profit margin per employee.

The numbers paint a pretty clear picture of the employee training landscape… companies that invested more in employee training made more money.

employees learning from their mistakesHere’s the irony. And it’s a big one… Either you’re going to train your employees or they’re going to train themselves. Guess which one is more expensive?

What about employee turnover? Any human resources manager will tell you, replacing an employee, particularly one with a special skill set, is very expensive. According to another study done by ASTD, 41% of employees at companies with little to no training were planning on leaving the company within a year. Compare this to just 12% departures at companies with excellent training programs. What about the cost of replacing an employee? Consider the American Management Association’s study that found that…employee turnover

… the average cost of losing, replacing and restoring equivalent productivity when a valued employee leaves is, on the average,
double the employee’s salary.

Other highlights from the ASTD Training Survey of 2,500 companies with comprehensive training programs:

  • 218% higher revenue per employee
  • 24% higher profit margins
  • 6% higher shareholder returns

If you’re interested in drilling down deeper into corporate spending on training, here is a comprehensive training study done in 2014.

It’s almost impossible to overstate the actual cost of poor or no employee training – what’s the cost to a company of incompetence, inefficiency, and human error?

Another way to look at this is that companies that don’t have a formal training program still have a training program.

They train their employees “in real time” by correcting the mistakes that they make when they make them. This is the most expensive and inefficient method of training there is, yet unfortunately it’s also the most common.

andy grove on employee trainingHere’s what Andy Grove, co-founder Chairman and CEO of Intel Corp for 20 years (who passed away March 16, 2016) had to say about training…

“Training is, quite simply, one of the highest-leverage activities a manager can perform. Consider for a moment the possibility of your putting on a series of four lectures for members of your department. Let’s count on three hours of preparation for each hour of course time – twelve hours of work in total. Say that you have ten students in your class. Next year they will work a total of about twenty thousand hours for your organization. If your training efforts result in a 1 percent improvement in your subordinates’ performance, your company will gain the equivalent of two hundreds hour of work as a result of the expenditure of your twelve hours.”

So why don’t companies put more effort and dollars into their training programs? Many times executives responsible for these decisions simply aren’t aware of the true cost of not training. The problem is these same executives are used to making decisions based on ROI spreadsheets that are easy to analyze when it comes to something like a capital investment in machinery. However, they are pretty much at a loss when it comes to measuring ROI on “soft spending” like spending on employee training. Try out our ROI calculator for injection molders to see just what inefficiencies and mistakes are costing you. You’ll be surprised. While the return on an employee training investment can be more subjective than other investment choices, ask the companies that have “taken the plunge”.

They are enjoying ROI’s higher than any equivalent capital investment they might make, and that’s exactly what they will tell you.

There’s also the choice facing companies of how to train when they decide to implement a formal training program. However, with nearly universal Internet access today, you can find training on virtually any topic from soft skills, to Hire Train Motivate and Retain employeesthe most technical training needed by skilled employees at plastics manufacturing companies. In the plastics industry, Paulson Training Programs pioneered in-plant employee training.

Paulson’s InSite 360 online training offers training for all levels of employees and not just technical training. We have a large library of Health & Safety training and we give seminars on Managing Your Injection Molding Plant.

To find out more about Paulson’s online training, DVD training, seminars and our new Technical Training Center for injection molders, just contact us at 1-800-826-1901, visit our website at, sign up on our plastics training membership site at Paulson TestDrive, or head over to our YouTube channel.

Whatever “flavor” you want for your training, we have it.

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