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.

Want more evidence for leadership on the cost cutting benefits of VR training? Read whitepaper here.
Want more details on how to bring VR into your training program? Get the step-by-step guide here.

Download the whitepaper: 5 Ways VR Training Helps Companies Even in an Economic Downturn’:

According to the National Fire Protection Association (NFPA), in the United States, an average of over 172,000 fires happen each year due to cooking with gas appliances and over 44,000 home fires each year are caused by gas appliances, including gas water heaters, ranges and ovens, clothes dryers, and central heating systems. These fires result in an average of over 400 deaths and 1,500 injuries each year.

Appliance installers, mechanics, and gas field workers are some of the positions hard hit by the skilled labor gap. Because of this, companies need to quickly and effectively train new, often unskilled, employees to safely inspect gas appliances in order to keep themselves and the customers they are serving safe. There is no better way to do this than with virtual reality (VR).

Why VR is more effective for training unskilled labor

Accenture did a great VR study comparing VR training with video training to teach unskilled workers to learn how to install a toilet. The study revealed a 12% higher accuracy and 17% faster time to completion for the participants learning using VR. Iowa State also did a VR comparison study for teaching welding. 100% of students that were trained using VR scored higher on evaluations than those trained using other methods.

Why? 

People learn best by doing. And VR is able to create immersive scenarios that feel like employees are in real homes inspecting real appliances. 

Additionally, VR training allows unskilled employees a safe space to practice and work through many different scenarios so that they are better prepared to handle what they may see in the field.

VR Gas Appliance Inspection training is now available

Standard and OSHA approved Gas Appliance Inspection training already exists in virtual reality and is being used by many companies to close the skilled labor gap. The training content covers a wide range of gas appliances and many scenarios to teach new employees how to inspect appliances, test them, and proper procedures to turn off and on the gas burners.

The training effectively teaches new employees: 

• How to inspect and perform a flame test on boilers, water heaters, and central heating units/furnaces.
• How to inspect and perform a thermometer test on ranges and dryers.
• The status of key categories of each appliance such as: venting, combustion scoring, and piping.

Most importantly, the training teaches employees how to recognize and document abnormal operating conditions (AOCs).

Using VR for Gas Appliance Inspection training yields big benefits

Virtual reality training  can produce some incredible benefits for companies looking to quickly and effectively train new employees. And all of these benefits save money.

The key benefits in using VR for Gas Appliance Inspection training:

• Reducing the skilled labor gap – Unskilled employees enjoy using VR and learn faster. This means getting open positions filled so the company can generate more revenue.
  
• Training faster – Getting new employees field-ready faster means both a cost savings in training time and more revenue from billable workers. 
  
• Keeping workers safe – Not only is VR faster for training, but it is also more effective. This means that workers are better prepared to recognize abnormal operating conditions so they can appropriately handle them. And that means both workers and customers are kept safe. Not only is that peace of mind, but it also saves money in disability and potential liability cases.

VR Gas Appliance Inspection training is the best way to give new employees a wealth of real-world experience before they ever visit a customer site. With increased pressure to fill open jobs quickly, it just makes sense to improve the training so disastrous mistakes don’t happen.

Wondering how to get started with VR training?

For learning and development leaders looking to help their company’s thrive, VR training is the answer. VR content naturally compliments existing training content to provide employees with ways to apply and practice skills needed to be successful. 

Want more evidence for leadership on the cost cutting benefits of VR training? Read whitepaper here!

In our previous whitepaper we covered how to bring VR into your training program, get the step-by-step guide here!

Download the whitepaper: 5 Ways VR Training Helps Companies Even in an Economic Downturn’:

Companies are feeling the pain of ‘redos’

The training programs that are being applied to teach hard skills to unskilled labor lack immersion and the ability to practice the skill. This was adequate for skilled labor that just needed to be able to apply their existing skills to a new process or piece of equipment. But for employees that don’t have experience, this isn’t enough.

General Dynamics felt the pain of this problem. They build ships and over time the company saw mistakes in the field that had to be redone climb to a seven figure cost per ship. When they analyzed the issue, they realized that ineffective training was to blame. 

Similarly, Chick-fil-A experienced difficult onboarding new employees using traditional methods. They were providing written manuals to young adults who weren’t reading or engaging with the material. This resulted in bagging mistakes which was costing them customers and reducing the lifetime value of a customer. In other words, they noticed the mistakes were costing them revenue.

Redos aren’t the only problem with traditional training. Companies like General Dynamics and Chick-fil-A have also seen increases in on the job accidents.  All the more reason why these companies are turning to VR training to better engage employees and improve skills training retention to reduce redos and keep employees safe.

How VR can be used to upskill workers and reduce mistakes

Onboarding and upskilling workers with virtual reality has been proven to be faster and more effective than video and classroom learning methods. Universities have been performing research studies for years validating this fact. The University of Maryland found an 8.8% average increase in memory recall with VR. Iowa State University used VR to help train welding students and 100% of the students who used VR training performed better on weld testing than students who used traditional training methods.

A study done by Accenture on VR training reinforces these findings that it is a superior learning method for learning hard skills. Accenture tested two groups on learning how to replace a toilet. One group used VR and one video learning. When the training was completed, the learners were asked to assemble and install a toilet in real life. The VR learners demonstrated on average 12 percent higher accuracy and 17 percent faster time to completion than instructional video participants.

These results have been further cemented by real-life use of VR training. For instance, Homegrown restaurants use VR training in onboarding and realized a 27% increase in the success of employee onboarding. That means new employees stuck with the program and went on to work in the restaurants. United Rentals also uses VR training for onboarding and experienced a 50% reduction in the time to train employees with VR.

Bottom line—VR training programs can help employees learn the skills needed faster, and will do the job better. This saves companies money by improving productivity and reducing expensive mistakes.

VR training is a must-have for companies training unskilled labor

Adding VR content to onboarding and skilled labor training is now a critical change for companies to make in order to manage costs and stay competitive. Virtual reality cost-effectively allows employees to practice skills in life-like environments. There is a large library of existing VR training for hard skills and it is easier than most L&D leaders think to add in custom elements. 

If you are a learning and development leader interested in learning more, here is a great paper with additional evidence on the benefits and ROI of VR training. And here is a guide on the steps to add VR into your current training program. The right training can help reduce the skilled labor gap and save big money. And that is a big win for L&D programs—especially as things get tight in a questionable economy.

Ready to talk with VR training content experts on getting the right training for your skilled labor needs? Talk to an expert here!

Download the whitepaper: 5 Ways VR Training Helps Companies Even in an Economic Downturn’:

Why VR training is more effective for preventing accidents

Oddly enough, one of the first industries to utilize VR for safety training was mining. Multiple studies have been presented over the years at the Minesafe International Conferences showing that VR is extremely effective and accepted. One study found that 94% of the mining workforce preferred VR as a teaching medium compared to other methods and that 77% of the workers said the VR simulations had a “good” level of realism. But the most important finding was a study that tracked a 43% reduction in lost time due to injury after VR safety training.

Beyond being more engaging, VR can create unsafe situations to test an employee’s response in critical situations while keeping employees perfectly safe. Even the best corporate training programs don’t have the resources to simulate real-life emergencies or unsafe scenarios without the help of virtual reality. 

In VR safety training content employees can learn fall protection as if they are actually working at heights. They can practice their emergency response skills, learning to perform CPR or safely put out a fire. They can learn hazard recognition, lockout / tagout procedures, or even learn to safely work in confined spaces. All activities and skills that are much easier (and less costly) to simulate in a virtual reality environment. 

How better safety training reduces costs

Improving workplace safety can make a very positive impact to a company’s bottom line. Doing safety training well reduces accidents and liabilities. This saves significant money from unintended payouts. The cost savings comes from not having to pay for disability, workers compensation, and fines from regulatory bodies like OSHA. Less accidents can also lower insurance premiums. 

Reducing accidents also keeps employees working. In a time when lots of open positions are unfilled or filled by under-skilled workers, it can be very damaging to have good workers out from injury. Keeping employees on the job equates to less strain on coworkers and better overall productivity. That adds up to improving employee satisfaction and retention rates. It also can mean improved business outcomes like more throughput or better customer satisfaction. Over time, that makes a positive impact on revenue.

Examples of companies realizing the benefits of VR safety training

Lots of companies have begun using virtual reality for safety training and have shared their amazing results. Verizon compared VR safety training to classroom training and found it so much more effective that they now use VR training for all store employees. Telstra tried VR safety training and realized that not only was it more effective, but it took half the time to achieve better comprehension. These are encouraging results, but let’s look at a few more detailed examples on how better safety training improves outcomes.

Example #1: Insurance company sees big cost reductions from VR safety training

An insurance company specializing in construction insurance is now bringing VR headsets with safety training to construction sites to get insured workers better trained on construction safety. They are thrilled with the results:

• 100% higher engagement in VR training compared to previous training .
• Accidents have been steadily declining. 
• Insurance payouts have been reduced, saving the insurance company money.
• Construction companies being trained are seeing lower premiums and higher employee retention and productivity.

Example #2: Pharmaceutical reduces accidents by 25% with VR training

A large pharmaceutical company started using VR training to improve safety awareness and ultimately hoped to reduce accidents. While their accidents were not major, they knew there were too many and that they were taking a toll on employees and the business. After an initial pilot they found:

• A 25% reduction in the number of safety accidents.
• Increased overall productivity/output from employees. 
• A reduction in OSHA costs fines.

Examples like these are becoming more frequent as companies look to save money in a questionable economy. Innovative companies know that keeping safety training the same as always is hurting the bottom line.

Safety training is a great investment in any economy

Improving safety training with VR technology and content leads to reductions in hard costs, but there are also soft cost improvements that forward-thinking companies see the benefits of. Specifically, improving safety training is a clear indication to employees that their company cares about them. When employees feel they are being cared for, they are less likely to look around for other opportunities. Employee retention can be critical during a questionable economy to help a company come out healthy. But really, improving safety is a benefit in any economy.

For learning and development leaders looking to get started with VR safety training, there is actually a lot of great content that already exists and has been proven effective. Here are a few other resources that can also help:

Cost cutting evidence to build a case for VR training? Read whitepaper here!

In our previous whitepaper we covered how to bring VR into your training program, get the step-by-step guide here!

Download the whitepaper: 5 Ways VR Training Helps Companies Even in an Economic Downturn’:

What are the unnecessary costs of training?

There are high costs for training that attempts to create a real-world experience for trainees.  This may involve traveling to a real-world location or to a special training center. It may also involve sending equipment to the trainees or shutting down production equipment for training purposes. Some companies may have a handle on these costs, but there are many others, like employee productivity, that they may not be calculating. Many companies don’t tally up these costs because they seem to be just a cost of doing business. With virtual reality, all of these costs can be eliminated or significantly reduced. And that is an interesting opportunity for learning and development leaders that may be feeling the budget squeeze of a tough economy.

To calculate training costs accurately, include the following:

• Travel – Add up the travel costs of instructors and trainees for trips to training facilities or to work locations.
  
• Equipment – Determine the cost of lost production if major equipment is shut down for training.
  
• Shipping – If equipment is being shipped to work locations for employee training, consider the
  shipping costs, cost for people / time to manage this process, and the cost of writing off that equipment.
  
• Facility – Some companies have invested in a specific facility for training and should add in all the overhead costs of that facility.
  
• Productivity – Training takes time from instructors and employees. Calculate the time lost from travel and/or the length of time to train difficult concepts with traditional training methods. While VR training won’t eliminate training time, it does significantly reduce the time it takes employees to learn hard and soft skills.

There are also costs associated with traditional training that are being incurred more frequently due to the skilled labor gap. Companies are attempting to train unskilled new employees with traditional training methods that aren’t getting the desired results. This is causing mistakes that are adding up for businesses.

To calculate costs from the ineffectiveness of traditional training include:

Incorporating VR technology that engages employees and radically improves skill retention into existing employee learning and development programs can make a major impact on an organization. VR learning is a smart investment for companies dealing with the challenges of an economic downturn or to help fuel growth when the economy is good.

• Accidents – Employee safety is important for employee satisfaction, but also for the bottom line. Safety incidents create loss in productivity, which can also burden peers with too much work. There is also a hard cost for disability and OSHA or other fines. 
  
• Re-training – Mistakes happen and this often triggers re-training. If the frequency for training employees has increased (which is common during the skilled labor gap) then it is important to add the additional training time costs.
  
• Re-work – When mistakes happen in the workplace because someone is doing something incorrectly, this can cost companies time and money. This is especially true for skilled labor. If work has to be redone because of insufficient or poor training, these costs need to be included.
  
• Lost revenue – Negative customer interactions or poorly made products can have a big impact on revenue with customer loss or lowered lifetime value of a customer.

The skilled labor gap combined with budget cuts to corporate training can have a big impact on the bottom line. Training leaders have an opportunity to make a case to supplement their training programs with virtual reality in order to cut training costs as well as corporate loss from mistakes.

Here’s the math on a grocery chain’s productivity costs for training

• A large grocery chain has 1,300 stores and around 200,000 employees
• They send each corporate employee to stores to see what a store looks like. Both the trainees and store employees have to take time off of work to walk through a store. 
• If it took 8 hours on average at an average $17/hour salary this is costing them over $27M. 
• This calculation does not include travel costs.
• Depending on employee turnover rates, this cost is likely realized every 2-3 years.

How VR training eliminates these costs

VR training is excellent for creating life-like scenarios for employees to interact with equipment and conditions that feel very real. This can include scenarios where certain equipment or training facilities were needed—which means those costs, including travel, can be eliminated. Productivity losses can also be significantly reduced by eliminating travel, but also because VR training has been found to be faster than traditional training methods. An Accenture skilled labor VR training study resulted in a 12% higher accuracy and 17% faster time to completion versus instructional video. Furthermore, a Pwc study on using VR training for soft skills found VR learners can be trained 4x faster than using classroom training.

VR training does have costs associated, but they are minimal compared to the savings. VR headsets and content are the main costs. Content can be loaded wirelessly onto VR headsets across the globe so no shipping is required, just purchase. For training on specialized equipment, custom content is needed, but this is often much less expensive than anticipated as existing content can be modified for specific equipment instead of starting from scratch. In fact, there are entire libraries of VR training content that exist for corporate use from safety training to hard and soft skills training. 

For the costs a company suffers due to ineffective training methods, there have been lots of research studies done comparing virtual reality training with other training methods. The studies look at things like learning retention, time needed to learn, effectiveness in learning a skill (hard or soft), and costs. The bottom line is that virtual reality is extremely effective on all counts. [See all the statistics on VR training effectiveness here.] And that means less safety accidents, less mistakes and rework, and improved customer satisfaction.

Need help calculating your actual training costs?

PIXO VR has worked with many large organizations to help them figure out the true cost of their existing training programs. If you’d like a free training cost analysis, you can fill out this form to get started.

Want more evidence for leadership on the cost cutting benefits of VR training? Read whitepaper here!

In our previous whitepaper we covered how to bring VR into your training program, get the step-by-step guide here!

Download the whitepaper: 5 Ways VR Training Helps Companies Even in an Economic Downturn’:

Why training budgets should be protected

When financial pressures hit organizations, the first round of budget cuts is often internal-focused in areas like HR and learning and development. Hiring freezes leave positions unfilled. Headcount reductions add to the burden on existing employees, causing them to become overworked, stressed, and unappreciated. In an era where many employees can easily leave to find new work, this is a dangerous situation for companies to be faced with.

The Aspen Institute recognizes this trend, “In far too many organizations in which economic downturns trigger budget cuts, learning and development funding is among the first to go. While it’s easy to understand why reduced revenues necessitate heightened cost-consciousness, halting investment in upskilling is a strategic misstep that deprives organizations of key opportunities they could exploit during a recession.”

Companies need to reconsider traditional notions of what budget cuts cause the least short term pain and instead consider which areas should be continued or even see higher investment to prepare the company to successfully get through an economic decline. 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%.

Will investing in training really make a difference during a poor economy?

The answer is yes. Investing in learning and development can actually reduce costs, yielding those budget reductions the company may need to weather difficult economic conditions. The Aspen Institute commented that companies that invest in learning and development during an economic downturn “are taking a conscious step to remain among those most able to communicate a strong employer brand and compete for top talent during times when wages and other benefits are likely to remain stagnant.”

That sounds great, but companies need P&L bottom line improvements and those can be found, but not with traditional training. If a company has been stuck training the same way they’ve been doing it for years, this is a hard concept to get behind — classroom style with a teacher and a detached student. Even if a company has moved to video and online learning, the concept is still the same. Employees are expected to absorb material and regurgitate it back.

This isn’t how people truly learn.

You can’t give a 17 year old a 20-page pdf and expect them to read and learn concepts any more than you can expect that a senior manager can master harassment discussions or that a new employee can learn a technical skill without practice. Even job shadowing still assumes a person can learn by seeing, not by doing.

True learning comes from practicing a skill in the environment they need to use it.

This type of immersive learning comes from virtual reality (VR).

What cost reductions can be seen with VR training?

Incorporating VR technology that engages employees and radically improves skill retention into existing employee learning and development programs can make a major impact on an organization. VR learning is a smart investment for companies dealing with the challenges of an economic downturn or to help fuel growth when the economy is good.

Here are five key benefits companies can realize by investing in VR training:

1. Reducing the costs of training – There are many training needs that require a special environment or specific equipment to train. This often incurs high costs for instructor and/or employee travel, shipping special equipment, shutting down production equipment, or the cost of recreating a real-life scenario. VR training eliminates the need for all of these costs with the ability to create life-like simulations that provide employees with hands-on experience without the added cost.
   
2. Improving employee safety – Keeping employees safe is great for employee happiness, but definitely impacts bottom line costs. Reducing workplace accidents keeps employees on the job and productive. It also reduces OSHA fines and disability costs. All of this adds up to higher production and less expense.
   
3. Overcoming the skilled labor gap – A lack of skilled labor is a big problem across many industries that will only be made worse with hiring freezes and budget cuts. Hiring unskilled labor and trying to train them using traditional methods is resulting in mistakes that have big costs to fix. VR training is faster and more effective at training hard skills than traditional training methods. Bringing VR content into employee training can reduce the skills gap and keep mistakes low.
   
4. Keeping employees engaged and retained – When the hiring freezes hit, valuable employees can get burned out. Next comes ‘quiet quitting’ or an actual exodus. Losing employees is a costly proposition of around 30% of the employee’s salary to find a replacement, let alone the cost of lost productivity and additional burden on others. To keep from losing these employees, companies need to continue to invest in their development. VR can play a big role here with hard and soft skills training that can improve employee engagement as well as make employees feel valued. 
   
5. Improving employee culture and job satisfaction – Going hand in hand with retention is keeping the employee culture strong during difficult times. This goes beyond skills training to looking for ways to improve diversity, inclusion, and employee wellness. There is a wealth of VR content for helping employees embrace these difficult topics, as well as reduce stress with guided meditation and wellness exercises. The same headsets used for skills training can be extended for employee development that keeps employees smiling amongst the challenges they face day-to-day. This increases productivity and keeps the company performing at the high levels needed to persist through the down economy.

Companies need to look to learning and development as a key function to weather the storm or even help a company thrive despite economic conditions. VR training can bring positive change and bottom line cost savings for companies looking for a strategic win in any economy. 

Wondering how to get started with VR training?

For learning and development leaders looking to help their company’s thrive, VR training is the answer. VR content naturally compliments existing training content to provide employees with ways to apply and practice skills needed to be successful. 

Want more evidence for leadership on the cost cutting benefits of VR training? Read whitepaper here!

In our previous whitepaper we covered how to bring VR into your training program, get the step-by-step guide here!

Download the whitepaper: 5 Ways VR Training Helps Companies Even in an Economic Downturn’: