The cost of quality training is visible in the quotation. The cost of inadequate training usually becomes visible later – through errors, downtime, scrap, equipment damage, injuries, absences, customer complaints and lost client trust.
That is why the real question is not: “How much does employee training cost?”
The real question is: “What level of risk are we exposing our people and our business to if we assign an employee a task for which they have not demonstrated competence?”
In occupational safety and health, training is often viewed primarily as a legal requirement. For a responsible organization, however, it is also a business investment: in more reliable operations, fewer disruptions, consistent quality and employees’ ability to respond correctly when working conditions change.
What Does “Untrained Employee” Actually Mean?
An untrained employee is not simply someone who does not have a signed training form or certificate.
It can also be an employee who has formally attended training but:
- does not recognize the specific hazards associated with their workplace;
- does not understand the limits of safe work or the conditions under which an activity must be stopped;
- cannot correctly apply a work procedure or use personal protective equipment;
- has not been practically assessed as capable of performing the task safely;
- does not know how to respond to equipment failure, deviations or an emergency situation;
- operates new equipment or works within a modified process without appropriate additional training.
In other words, a training record is not the same as demonstrated competence.
How Much Does Lack of Competence Cost?
There is no single universal cost that applies to every workplace or company.
The cost associated with an employee who is not adequately trained to work safely and correctly can emerge in several areas at the same time:
- Cost of errors and rework – incorrect handling, scrap, customer complaints, additional inspections and wasted materials.
- Cost of downtime – stopped production lines, waiting for maintenance, delayed deadlines and unused capacity.
- Cost of injury or ill health – lost working days, employee replacement, overtime, incident investigation, corrective measures and potential compensation claims.
- Cost of equipment and infrastructure damage – repairs, spare parts, temporary removal of equipment from service and resulting production losses.
- Cost of non-compliance – regulatory measures, fines, work stoppages, customer findings and failed supplier audits.
- Cost of lost trust – delivery delays, complaints, difficulties securing new contracts and reputational damage.
The biggest problem is that these costs are rarely recorded under a single account. They are distributed across production, maintenance, quality, human resources, the occupational safety and health function and management. As a result, the real cost of inadequate training remains hidden.
What Do the Real-World Data Show?
According to estimates by the International Labour Organization, approximately 2.93 million people die each year as a result of work-related factors, while around 395 million workers suffer a non-fatal occupational injury.
EU-OSHA estimates that work-related injuries and diseases cost the European Union approximately €476 billion per year, equivalent to around 3.3% of EU GDP.
For 2023/24, the UK Health and Safety Executive estimated the total cost of new cases of work-related injury and ill health at £22.9 billion. The average total cost was approximately £10,000 per injury case and £24,200 per new case of work-related ill health. Of the total, around £4.3 billion represented costs incurred by employers.
These figures are not a price list that can be directly applied to an individual company in Serbia. They do, however, clearly illustrate the scale of the consequences when prevention, work organization and employee competence are not at the required level.
Does Training Alone Prevent Injuries?
No – and this is one of the most important professional messages.
A systematic review by NIOSH and the Institute for Work & Health, based on 22 randomized studies, found strong evidence that training has a positive effect on employees’ safety behaviour. At the same time, the authors did not find sufficient evidence that training, when used as a stand-alone measure, by itself reduces injuries and work-related ill health.
This does not diminish the importance of training. On the contrary, it shows where training belongs within the broader safety system.
Training cannot compensate for unsafe equipment, inadequate safeguards, poor work organization, unclear procedures or a lack of supervision. The best results are achieved when training forms part of a comprehensive system that connects risk assessment, technical and organizational measures, instructions, practical work, leadership and verification of how learning is applied.
That is why a quality training programme should not teach employees only what the procedure says, but also:
- why a particular control measure is necessary;
- how to apply it correctly in real working conditions;
- how to recognize a deviation;
- when work must be stopped;
- whom to report a problem to;
- how to respond in an emergency.
What Do Serbian Regulations Require?
The Republic of Serbia’s Occupational Safety and Health Act (“Official Gazette of the Republic of Serbia”, No. 35/2023) does not treat training as a mere formality.
Article 33 requires employees to receive training for safe and healthy work when entering into employment or another form of engagement, when being transferred to other duties, when new technology or new work equipment is introduced, when equipment is changed and when the work process changes. Training must be adapted to the specific characteristics of the workplace and the risks identified in the risk assessment document.
Article 34 requires training to be delivered both theoretically and practically, in accordance with a programme containing general and specific components. Theoretical and practical competence must be assessed at the workplace.
Periodic training for employees working in positions involving increased risk must be conducted no later than one year after the previous training, while for other workplaces it must be conducted no later than three years after the previous training.
For a legal entity that fails to adopt the required programme and provide the prescribed employee training, Article 100 provides for a fine of RSD 1.5 million to RSD 2 million. For the director or another responsible person, the prescribed fine ranges from RSD 30,000 to RSD 150,000.
A fine, however, represents only one part of the potential cost. The consequences of a serious incident, operational disruption or the loss of an important client can be considerably greater.
How Can a Company Calculate the Cost of Inadequate Training?
Instead of relying on general marketing claims, a company should calculate its own business case.
A basic model can be expressed as:
Cost of inadequate training = cost of errors and scrap + cost of downtime + cost of absences and replacements + cost of incidents + cost of damage + cost of non-compliance + lost business
To assess the impact of training, companies should monitor a period before and after implementation, using indicators such as:
- number of errors, customer complaints and rework;
- hours of downtime caused by improper handling;
- number of unsafe conditions, incidents and injuries;
- number of non-conformities identified during internal and external audits;
- time required for a new employee to reach the required level of independent performance;
- theoretical and practical assessment results;
- application of learned practices during workplace observations.
The return on investment can be calculated using the following formula:
Training ROI (%) = (avoided costs – total training costs) / total training costs × 100
It is important to emphasize that even serious international analyses do not establish one universal rate of return applicable to every occupational safety and health training programme.
Actual ROI depends on workplace risks, the initial level of competence, programme quality, management support and consistency in applying what has been learned.
The return should therefore not be assumed – it should be measured.
When Does Training Become a Real Investment?
Training creates business value when it is:
- based on risk assessment and the actual needs of the work process;
- tailored to the specific tasks, equipment and responsibilities of participants;
- aligned with the company’s current procedures and instructions;
- theoretical, practical and focused on real-life situations;
- completed with an assessment of knowledge, skills and the ability to respond correctly;
- supported by direct supervisors;
- followed by workplace observation, feedback and periodic knowledge refreshers;
- linked to measurable indicators of safety, quality and productivity.
Attendance at a training session confirms that an employee was in the room.
Only practical assessment demonstrates whether they can perform the work safely.
How Can You Improve Training in Your Organization?
The most expensive training is not necessarily the training with the highest cost per participant.
The most expensive training is training that takes employees’ time but does not change the way work is performed.
TEHPRO Education Centre develops statutory, professional and in-house training programmes based on risks, work processes and the specific needs of each organization.
The goal is not simply to transfer information, but to build competencies that can be assessed and applied in a real working environment – from safe equipment handling and high-risk activities to LOTO, Permit to Work systems, fire protection, emergency response and the development of a strong occupational safety and health culture.
Training is a cost that can be planned.
Lack of competence is a risk whose cost organizations often discover only when it is too late.