The following is an excerpt from our whitepaper: ‘5 Ways VR Training Helps Companies Even in an Economic Downturn’:
2021 and 2022 have seen an incredible increase in the number of workers quitting their jobs. During this time, Statista reports over 4 million Americans have quit their jobs each month for a total of around 20% of workers quitting their jobs by the end of 2022. It’s being called the Great Resignation and it has become a big problem for companies that are finding it more difficult than ever to fill open positions.
But why are they leaving?
There is no question that remote work has played a role in retention as it put workplaces into flux and the kinks aren’t all worked out yet. This combined with the plethora of better opportunities in the job market have been big contributors to resignations. But there are many studies that point toward lack of employee development as a major factor in their choice to leave. Basically, the more an employee feels their employer is not investing in their personal and professional growth, the more likely they are to leave for a company that will.
Big picture leaders know that a lot of time and money is invested into onboarding and getting an employee productive. Furthermore, losing an employee is a complete waste of that investment. The good news is, learning and development leaders have an opportunity to save the company money by addressing retention problems with virtual reality (VR). This article explains how costly the retention problem is and how virtual reality (VR) can be a cost-effective solution to end the Great Resignation.
How costly of a problem is the Great Resignation?
When an employee resigns, the cost of hiring and training a new employee is 10-30% of that employee’s salary according to the Center for American Progress. That number gets bigger when considering the productivity gap left when the position is unfilled plus the toll on peer employees who may get burned out or frustrated by the extra work.
To really put numbers to this problem, a company can conservatively use 25% of salary to calculate all of the costs involved with employee resignation. Then consider the total cost of employee salaries and multiply that by 20% to represent the number of employees who have or may be leaving the company during the Great Resignation. Then take 25% of that number to get the total cost.
If a company has $500M in annual revenue, they likely spend around 20% of that on employee compensation, or $100M. Using the equation above, the Great Resignation conservatively equates to a $5M annual cost for that company.
How can VR help with employee retention?
A Gallup study of high-performing workplaces showed that companies that make a strategic investment in employee development are twice as likely to retain their people, while also increasing profitability by 11%. But the same old training content and methods isn’t going to help companies retain employees. A clear investment in their development needs to be demonstrated and VR is a fantastic tool for that.
It’s a given that employees will be trained on the hard skills they need to do their jobs and VR can help with that. But companies need to go beyond this to training content that can truly improve the workplace, employee relationships, and demonstrate that the company cares about their well being.
HR and learning and development leaders should look into the VR content that is already available in these high impact areas:
- Workplace safety – Even the simplest safety courses like learning how to perform CPR or use a fire extinguisher can show employees you are invested in their well being. And doing it in VR is incredibly effective, yet low cost as VR can easily simulate emergency scenarios.
- Leadership skills – Making sure managers are doing a great job helps to make sure all employees feel good about the workplace culture and development.
- Communication skills – Improving employee communication helps the business and shows employees the company is investing in their personal development. At a time when many companies are struggling with remote work, this is a critical offering to invest in to keep productivity high and avoid quiet quitting scenarios.
- Inclusion and diversity training – Despite numerous lawsuits, not many companies are forced via regulations to offer this. That said, making an effort to improve in this area is a positive investment in culture. And it can help a company avoid the cost of a lawsuit should a serious problem arise.
- Employee wellness – Beyond training, VR can be used to help employees meditate, reduce stress and work on self improvement. All of this improves focus and productivity. And ultimately employee retention.
Can corporate training really be fun and engaging?
It can with VR. Virtual reality adds a level of fun and gamification to training that is highly engaging for all ages. This is especially true for a younger workforce that has shorter attention spans and is highly resistant to learning via traditional methods. Learning by doing is the most successful approach and VR is the best medium to make this happen.