Impact Of Training On Employee Retention Case Business School Umer Ahmad Abstract

The purpose of this research is to examine the impact of training practice on employees’ intention to
remain or leave an organization. The research has identified how great the effect of training
practice on employee retention is. Data has been collected from 100 employees of Public/Private
organizations using convenience sampling technique. Descriptive statistics, correlation and regression
analysis techniques are used to analyze data. The results shows that positive relationship exist
between training and employees retention and employees decision to stay for a longer period of time
can be influenced by training practice.

Introduction

In today’s competitive environment companies are struggling hard to design a most appropriate
strategy that could enhance the retention rate and pulls the turnover rate downward. Organizations
have realized that competitive advantage could be attained by employees’ skills. There is a great
importance of an appropriate retention strategy; many retention strategies are designed that are
related to provision of training to employees, and compensation etc. Mohammad I. Fheili (2007)
believes that organizations are not interested in providing trainings that are generalized in nature.
They are focusing on specialized trainings which is relevant to a specific task and make the employees
unfit for competitors use. They are limiting employees’ ability to switch to another job in an industry.
Organizations are finding ways to make the employees specialized rather than a generalized one,
while rest of the organizations consider training as an investment on employees and expect a return in
the form of commitment and retention (Danlami Sani Abdul kadir et al 2012). Organizations are
following many retention strategies and in a process to find the most appropriate one that suits best
with an organization’s environment. For most of the organizations the problem remains still
under consideration that whether there is a significant impact of training on employee retention or
not. This evaluation could be proved useful for organizations to evaluate that whether training
and development practice outcomes are in favor of organization for retaining the employees.
Employees who value the development of skills for their career growth may be more willing to work for
an organization who constantly equips them with well-run knowledge through training and
development practice. There could be an indirect relationship between provision of trainings and
retention; commitment could act as a bridge. It does not mean that organization ignores other human
resource practices except training and development but the implementation ratio of each human
resource practice differs. The purpose of research is to examine the impact of training and
development practice on employee commitment and an intention of employee to remain or leave
an organization, and how great is the effect of training and development, which is a human resource
practice that could have on employees’ commitment and retention as compared to other practices.
This research could provide better understanding in the relationship of effectiveness of Human resource
practices on employee retention in an organization, but the main focus would be on the impact of
training and development on employees’ retention. It will provide useful information regarding the
impact that the employee training has on employee retention. This study will help readers to better
understand and will serve as a guide to many organizations regarding the employee retention. It will
also provide a solution using training and development practice to retain employees in organizations.
This study has been initiated with an introduction, which includes the background of study. Thirty
research papers have been consulted in order to understand the other authors’ point of view about
the impact of training on employees’ retention. Hypothesis will be tested in some ways that could
prove or disapproves it. Methodology for conducting the study and analysis techniques used to
analyze the collected data has been discussed. At the end of the study results and conclusion has been
discussed.

Literature review

In today’s competitive environment there is a great need of employees’ commitment and an

appropriate strategy that pulls the retention rate downward. Companies consider retention of
employees as a challenge due to the increased flexibility of jobs. Various studies have been conducted
that popular HR practices are not the only ways to enhance commitment and reduce retention.
Scott Brum (2007) highlighted that when the employees are introduced to more trainings, they show
higher level of commitment as compared to others. Roya Anvari et al (2010) revealed that it is possible
only with the help of planning training programs that are totally based on needs valuation to achieve
commitment and retention. Training is considered important in developing a feeling of belongings
among employees. Eva Kyndt et al (2009) revealed that training has a potential to change the
turnover thoughts and is an important factor that helps in originating the intentions of turnover.
Those employees that are highly committed to the organization have lower turnover thoughts.
Trainings basically bring association between commitment and retention. Danlami Sani Abdul kadir
et al (2012) has considered training as an investment, organization bears the whole expenditures of
training employees which eventually act as an investor and expect a return in the form of commitment
and retention from employees. Trainings elevate commitment and retention rate, when employees
consider it as investment and force them to offer a return to the organization. Alexandros G. Sahinidis
and John Bouris (2007) Training is a long term investment in the skills of employees. Training is not a
tool to polish current skills of employees but to prepare employees for future impacts from competitive
forces. This kind of training boosts the commitment and employees think that organization is opening
doors to our success. This sense eliminates the thoughts of intentions to quit from employees mind and
force them to retain. Mohammad I. Fheili (2007) has stated that employee turnover is a major human
capital risk for an organization, which needs to be catered. Organizations that provide trainings which
are specific in nature applied only to the specific work within the organization that makes the employees
specialists not generalists. By doing this Organization limits the employment opportunities and leads to
the development of committed employees and will eventually affect retention rate. Thomas
Joseph McCabe and Thomas N Garavan (2008) Revealed that with the help of training organizations can
provide their employees with practical support and assist in valuable delivery. This encourages the
commitment of employees and which ultimately effects retention. Vlad Vaiman (2008) Organizations
focus on trainings in order to maintain attractiveness and competitive as compared to others in
the external environment. This enhances the organizational status in the eyes of knowledgeable
employees and makes them to think that no one cares about you more than us. Anders Dysvik and
Bård Kuvaas (2008) Training and development develop a social link between organization and
employees. This social link creates a commitment factor that bounds the employee to stay longer with
an organization. There is a social exchange between employer and employees due to provision of
training. Fathi Mohamed Abdul jlil AL Damoe et al (2012) Training and development results in intangible
outcomes such as enhancing employee commitment, retention and employee satisfaction. The basic
opinion in these publications is that HR managers should take into account several factors when
developing retention policies, compensation is not the only policy and some employees wants skills
upgrading opportunities rather than compensation.

Methodology

The focus of this research was aimed at clarifying the impact of training on employee retention.
Questionnaire was developed to collect data for determining the effect of independent variable
(training) on dependent variable (retention). Quantitative data was collected through questionnaires
using non probability sampling. The questionnaire consists of 16 questions, which includes eight
questions on independent variable (training) and nine questions on dependent variable (retention).
Questions asked from employees were based on 5-points likert scale. The collected data has been
analyzed through excel data analysis tool pack. 3.1. Population The nature of research is linked more
with employees and organizations. The target audience for this particular research is employees and
people who worked but dissatisfaction with an organization forced them to quit. The questionnaire
has been filled from the employees of different public/private sector organizations. Many
public/private organizations can use results, which are active in promoting learning and wanted
to retain valuable employees. This research will make the organizations to think about the training’s
impact on employee retention. 3.2. Sample The sample size selected for data collection was 100, which
includes 82% males and 18% females. Statistical analysis has been conducted on the responses collected
from these 100 respondents. Convenience sampling technique was adopted to fill questionnaires
from employees. The questionnaires are filled from public/private sector employees i.e. Schlumberger,
National investment board, National rural support programme and Pakistan broadcasting
corporation. The response rate was observed to be 100%. Variables Two types of variables are used in
this research. The dependent variable identified for research is retention while the independent variable
is training. 3.3.1. Dependent Variable (Retention) Retention has been considered as a factor, which
has observed and measured the effect of independent variable (training). Retention has been
presumed to be the effect due to the cause of training. Responses related to retention from hundred
respondents have been considered a dependent variable. Nine questions have been asked related to
retention (dependent variable). 3.3.2. Independent Variable (Training) Training has been considered as
a factor, which will examine the impact of training on employee retention. Training has been presumed
to be the cause that will create an effect over retention. Eight questions have been asked related to
training (independent variable). 4. Data Analysis Techniques Three analysis techniques have been used
to examine the relationship and significance between independent variable (training) and dependent
variable (retention) 1. Descriptive statistics 2. Correlation 3. Regression 5. Theoretical Framework
Training Employee Retention
 The purpose of the research is to examine the effect of training opportunities on employee
retention. Training is considered as an independent variable while employee retention is considered as a
dependent variable. Organizational equilibrium theory by March and Simon’s states that employees who
value acquiring new skills and polishing the existing one for their career growth maybe more willing to
work for an organization who equips them with well-run knowledge. In organizations skills can be
polished or developed through trainings, this theory clearly shows that there could be direct or
indirect effect on training on employee retention. In indirect relationship, commitment could act as a
bridge between training and employee retention. 6. Results & Discussion 6.1. Descriptive statistics
Training Retention Mean 3.79 3.51 Median 3.8 3.5 Standard Deviation 0.4414 0.4746 Minimum 2.5 2.41
Maximum 4.6 4.41 Count 100 100 Table 1.1 The calculated mean for independent variable (training)
is 3.79, which means that average people from sample of 100 are somewhat satisfied. Since the value
of 3.79 rounds off to 4, which is equal to somewhat agree. For dependent variable (retention) the
calculated mean is 3.51, which means that average people from sample of 100 are somewhat satisfied.
Since the value of 3.51 rounds off to 4, which is equal to somewhat agree. The median for the
independent variable (training) is 3.8, and the value of median for the dependent variable is 3.5. The
median suggests the option four of the questionnaire which is somewhat agree and option three for
retention which is average.

The standard deviation for independent variable (training) is 0.44, and the standard deviation for
dependent variable (retention) is 0.47. This shows that the data of training is spread out at 0.44 and for
retention it is at 0.47. In the sample size of 100, the minimum value of independent variable (training) is
2.5. This minimum value of 2.5 means that minimum option selected by the respondents for provision
of training is somewhat disagree. The maximum option selected by the respondents for
independent variable (training) is 4.6, which rounds to strongly agree. The minimum value of dependent
variable (retention) is 2.41. This minimum value of 2.5 means that minimum option selected by the
respondents for retention is somewhat disagree. The maximum option selected by the respondents
for dependent variable (retention) is 4.41, which rounds to somewhat agree. 6.2. Correlation Training
Retention Training 1 Retention 0.5289 1 Table 1.2 The correlation test has been conducted to express
the strength of relationship between training and retention on a scale from -1 to 1. The value of 1 has
been considered as a perfect correlation between variables. The value of correlation between training
and retention is 0.5289, this value is deviated more towards perfect correlation. This value indicates a
positive relationship in which change in training will produce a change in retention. 6.3. Regression
Coefficient t-Stat Intercept 1.3583 3.862 Training 0.5688 6.1703 R-Square 0.2708 F-Stat 38.0737

The regression test is conducted to determine whether there is an evidence of a linear relationship
between provision of trainings to employees and their return in the form of retention. The regression
equation for the data is y=1.3583+0.5688x. This means that for every single training opportunity, the
retention rate has been increased by about 0.5688. The constant term in this equation is 1.3583. This is
the y intercept, and it means that if the independent variable i.e. training is 0, the value of the retention
would be 1.3583. The R Square value is 0.2798; variation in the values of the retention that can be
clarified by the change in the independent variable which is training has been measured. The R
Square values vary between 0 to 1. A value of 0.2798 means that 27.98% of the variation in the
retention rate is due to provision of training to employees in organizations. The remaining 72.02% of
the variation has been supposed to be due to other human resource practices like compensation,
performance management system and working environment. The F ratio is 30.0737, indicates that the
regression is statistically significant. The p value is displayed in the next column and equals 1.536E-08.
This p value is less than 0.05, the regression is statistically significant. The analysis shows that there
is a significant impact of training on employee retention so, we reject the null hypothesis and accept the
alternative hypothesis. T-stat is 3.8620 which is greater than 1.96 with significance less than 0.05
indicates that there is significant relationship exist between provision of trainings to employees and
their retention. This t-stat value of 3.8620 also shows that the independent variable (training) has a
greater influence on the dependent variable (retention).

Practical Implication and Recommendations The results of this research will be useful for organizations
to understand that training practice could be shaped into a retention strategy. Research explores the
perception of employees about training practice of organization, when employees are interested to
stay with an organization. There could be a possibility that if organization fulfills the employees needs
regarding polishing existing skills and preparing them for upcoming challenges, retention rate will be
boosted. This research can help the organization to build a reputation of a learning organization; it will
become a favorite organization for people who are employed. The future recommendation is that
researchers can study the impact of training on employee retention, but try to explore other factors
that can affect retention along with training. Researchers can compare the results of training against
other human resource practices that can retain employees. 8. Conclusion As the research has shown,
there is a significant impact of training on employees’ retention. The research provides empirical
evidence that supports the cause of training and its effect on employee retention. Researchers who
examined the relationship between training and employee retention, agree that the relationship
exist between these two variables. The research has proved that employees’ decision to stay for a
longer period of time can be influenced by trainings.

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References (30)

... Training and development is a crucial problem in the pharmaceutical sector, researchers have said
that, it is long term investment on employee skill, it is a tool to polish employees' recent skills for future
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pharmaceutical industry has been experiencing a high turnover and a decrease in the employee
retention. ...

... Researcher highlight that increasing employee retention and employee commitment training is that
factor which HR manager take in account, for the betterment of the organizations growth because
Training is basically a practical knowledge which overcome employee's inefficiencies and enhance the
knowledge and boost their skills power in a way to achieve more productivity, which is an important
factor leads to success. (Anis et al., 2011;Ahmad, 2013). ...

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successful organizations to do training and training that can help staff get enough information about
their work (Hafeez and Akbar, 2015). ...

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