Why Employees Training Pays Twice – Asrar Qureshi’s Blog Post #1245

Why Employees Training Pays Twice – Asrar Qureshi’s Blog Post #1245

Dear Colleagues! This is Asrar Qureshi’s Blog Post #1245 for Pharma Veterans. Pharma Veterans Blogs are published by Asrar Qureshi on its dedicated site https://pharmaveterans.com. Please email to pharmaveterans2017@gmail.com  for publishing your contributions here.

Credit: Artem Podrez

Credit: Christina Morillo

Credit: Yan Krukau

Preamble

This blogpost is based on a research by Professor Christopher T. Stanton and Professor Miguel Espinosa, forthcoming in the Journal of Political Economy, as reported in Harvard Business School Working Knowledge. Link at the end.

Why Employee Training Is Worth Twice What You Think

Most organizations calculate the return on training by asking a simple question: did the people we trained get better at their jobs? New research from Harvard Business School suggests that question, while reasonable, captures less than half the story.

Companies in the United States spend roughly $1,200 per worker annually on training programs. That is a substantial collective investment, and one that has long been difficult to justify with precision. Sceptics of training budgets have always had a point: the link between classroom learning and bottom-line performance is murky, the benefits are hard to measure, and much of what employees are taught is forgotten within weeks. Return-on-investment calculations for training have, as a result, tended to be optimistic estimates built on thin evidence.

A new study co-authored by Harvard Business School Professor Christopher T. Stanton is about to change how that calculation is made, and it arrives with a finding that fundamentally reframes the value of investing in people.

The Study: What Was Actually Measured

Stanton and his co-author, Miguel Espinosa of SDA Bocconi School of Management, studied a real training program at a Colombian federal regulatory agency between 2018 and 2019. The agency selected approximately 10% of its frontline workforce, around 65 employees out of 655 total staff, to complete a rigorous 120-hour, 16-week training program in late 2018.

The program was not a soft-skills workshop or a compliance tick-box exercise. It combined practical instruction in specific capabilities, goal setting, Microsoft Excel proficiency, and effective professional writing, with substantive content in Colombian legal analysis. It was demanding, applied, and directly relevant to the participants’ day-to-day work.

The researchers compared participants’ goal achievement scores from April to June 2018, before the training, against the same period in 2019, after it was completed. They also analyzed email communication patterns between frontline workers and their managers before and after the intervention.

What they found tells a story that goes well beyond the trainees themselves.

The First Dividend: Frontline Performance

The trained employees became measurably more productive. Their goal achievement scores improved by approximately 10% compared to their untrained colleagues, a significant uplift from a single program.

But the performance gain did not stop at output. Trained employees also demonstrated greater career stability and upward mobility. They were more likely to remain with the organization over the following three years than their non-trained counterparts. And they were approximately twice as likely to receive promotions.

This alone would be enough to justify most training investments. Improved productivity, better retention, and accelerated career progression represent a compelling return on a $1,200-per-head annual spend. But it is, according to Stanton, only the first half of the benefit.

The Second Dividend: Managers Get Their Time Back

Here is where the research becomes genuinely surprising.

After the training program concluded, the researchers noticed something in the email data: trained frontline employees sent significantly fewer emails to their managers. The interpretation is straightforward; having gained new skills, knowledge, and confidence, the trained workers were better equipped to resolve problems independently. They no longer needed to escalate routine challenges upward.

This shift had a profound knock-on effect. With fewer interruptions from frontline staff seeking guidance, managers gained back substantial blocks of time, time they could redirect toward strategic, high-value work that genuinely requires senior judgement.

Stanton quantified this effect, and the number is striking: the time-saving benefits for managers accounted for nearly 45% of the total value generated by the training program. In other words, almost half of what the training was worth came not from the people who were trained, but from the people who managed them.

This is what the researchers call the “spillover effect”, the way investment in one layer of an organization ripples upward through the hierarchy, compounding value in ways that conventional ROI frameworks entirely miss.

Why Traditional Calculations Miss Half the Picture

The implications for how organizations evaluate training are significant. Most investment cases for learning and development are built on a straightforward model: train employees, measure their productivity improvement, compare against cost, declare success or failure. The manager is treated as a fixed constant in this equation, a passive observer of the trainee’s progress.

Stanton’s research demolishes that assumption. The manager is not a constant. The manager is a beneficiary. And a significant one.

To illustrate how dramatically this changes the numbers: without the boost to managerial productivity, the agency would have needed to train nearly twice as many frontline workers to achieve the same overall output gain. That means organizations relying on traditional ROI calculations are systematically undervaluing their training investments by a factor that could be close to two.

This has real consequences. Training budgets are perennially vulnerable in cost-cutting cycles precisely because their value is perceived as diffuse and hard to quantify. If organizations began accounting for the time liberated at managerial level, time that can be converted into strategic thinking, mentorship, innovation, and business development, the calculus would look very different, and training would be a much harder budget line to cut.

The Hierarchy Runs Both Ways

There is a broader intellectual point embedded in this research that deserves attention. The conventional wisdom on organizational performance tends to flow in one direction: managers shape the productivity of their teams. Extensive research has explored how leadership quality, management style, and supervisory behavior influence frontline output. The arrow points downward.

What Stanton and Espinosa’s work demonstrates is that the arrow also points upward. Strategic investments in frontline workers can ripple upward through hierarchies, freeing leaders to do the work that only leaders can do. The organization improves not just at the frontline but throughout its structure, because the bottleneck is often not a lack of management talent, but a lack of management time.

This reframing has significant implications for how organizations think about the design of their training programs. The question is not only “which employees need these skills?” but also “where in our hierarchy are the most valuable time bottlenecks, and which training investments would most effectively relieve them?”

Sum Up

For business leaders, the message from this research is direct: your training budget is probably delivering more value than you know, and your return-on-investment models are probably telling you less than half the truth.

Measuring only what trainees do after a program misses what their managers are now free to do instead. And that freedom, to think strategically, to lead rather than troubleshoot, to focus on the work that genuinely requires human judgement at a senior level, is where some of the most valuable work in any organization actually gets done.

Employee training, it turns out, pays companies twice. The first payment arrives in the performance of the people trained. The second, quieter, harder to see, but nearly equal in value, arrives in the boardrooms and meeting rooms where managers finally have the space to lead.

Concluded.

Disclaimers: Pictures in these blogs are taken from free resources at Pexels, Pixabay, Unsplash, and Google. Credit is given where available. If a copyright claim is lodged, we shall remove the picture with appropriate regrets.

For most blogs, I research from several sources which are open to public. Their links are mentioned under references. There is no intent to infringe upon anyone’s copyrights. If, any claim is lodged, it will be acknowledged and duly recognized immediately.

Reference:

https://www.library.hbs.edu/working-knowledge/why-employee-training-pays-companies-twice?utm_source=ActiveCampaign&utm_medium=email&utm_content=Trending%20this%20quarter%3A%20Performance%20reviews%2C%20employee%20training%2C%20AI%20s%20impact%2C%20and%20more&utm_campaign=WK%20Newsletter%20Quarterly%20Trending%2003-25-2026