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Performance
May 19, 2023

10 reasons your organization should invest in employee development

Zahra Currimbhoy
Zahra Currimbhoy
Marketing, Perdoo
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10 reasons your organization should invest in employee development

Employee development is a solution well-matched to today’s relentless challenge of attracting and retaining a skilled workforce.

Three years after the start of the pandemic, the inability of employers across all industries to maintain skilled workers in mission-critical positions continues to be a major business disruptor. The unexpectedly large number of employees who have exited the workforce since March 2020 have made a strong business comeback challenging. Companies are unable to fill their vacancies quickly or at all.

Employee development is an effective and dynamic strategy that will help you attract and retain the right people–people who are committed to your mission and who possess the necessary skills to help you achieve your business goals. This article will explain why this powerful tool is a must-have in your workforce management toolkit.

What is Employee Development?

Arkadiusz Terpilowski, Co-Founder of Primetric, a global, technology-driven assessment services provider, defines employee development simply as: “a process of helping employees progress in their careers by acquiring new skills.”

True, but there is more to the story.

Employee development is a pillar of recruitment, the mainstay of retention, a key to employee engagement, and a boost to your bottom line. The process of employee development is a coveted pathway for employees to grow within their current jobs or to prepare for advancement to other roles.

The employee development process is meant to be inclusive of employees at all levels and may include formal education, skills training, mentoring, job shadowing, and other learning components. There is no “one-size-fits-all” formula, and it is not a one-time event or short-term project. When employee development is most successful, the process is deeply embedded in your company culture and has the full support of leadership. Employee development represents a continual investment in your team. It is a program that will require your energy, time, and budget dollars from launch through the long term. Is it worth the effort? Absolutely. Here’s why.

10 Reasons Why Employee Development Pays Off

An effective employee development program will help you achieve the following 10 business imperatives:

1. Build a positive, high-performance culture.

Imagine a culture that candidates are eager to compete for, that employees are proud to be a part of, and that encourages clear and open communication at all levels. This is the environment you can create when you design an employee development program that gives everyone a chance to succeed in their jobs and envision a pathway to advancement.

Robert Kegan, co-author of An Everyone Culture: Becoming a Deliberately Developmental Organization, was interviewed by HR Works for their podcast, “Creating a Culture of Growth to Get the Best from Your Employees.” Kegan described deliberately developmental organizations (DDOs) which recognize that learning must be woven throughout someone’s workday, as opposed to being an add-on to a worker’s already busy day.
A key concept is that the culture must engender enough trust that employees feel safe to acknowledge their weaknesses as well as their strengths. This requires transforming how communication occurs, how feedback is given and received, and how mistakes are not only tolerated but nurtured as learning opportunities. Kegan shares three examples of companies that have embraced and boldly stretched the concept of employee development.

The results are impressive.

  • NextJump, a $2 billion e-commerce company, slashed turnover from 40% to single digits. Their approach to developing leaders was so successful that they later launched a second company to teach leadership coaching.
  • Decurian, with a diverse portfolio of real estate, movie theaters, and senior living, has the highest per-screen gross of any movie chain. They state their purpose is “creating spaces for people to flourish…living into one’s unique contribution” through their work.
  • Kegan called Bridgewater Financial Services, the world’s largest hedge fund, “wildly successful.”

DDO cultures, which are characterized by a relentless drive to achieve while giving and receiving candid feedback to their teams, are not for everyone. Some employees opt out of their culture early on. Nonetheless, seven years after Kegan published his book, his assessment of the economic success of these companies remains accurate.

What does employee development look like in companies such as this? It begins with the recruiting process, where candidates are asked if they have an interest in not only coming to work every day to do their job but also to work on becoming a better version of themselves and helping others do the same. Leaders of these organizations believe that culture is the leading contributor to their success.

2. Stay competitive in the battle to hire capable employees.

Employee development provides you with a competitive hiring advantage. The success of your business depends on your people, their skills, and their engagement. We have not seen a labor market in our lifetime like one that emerged post-pandemic. Unprecedented numbers of people dropped out of the workforce–some permanently because of illness, virtual education for children, massive retirements, shuttered businesses, and the reprioritization of personal or family matters over work. So, how can we recover?

💡Explore This Idea: Offer “returnships” to expand your candidate pool. This back-to-work program is primarily focused on attracting and supporting women who quit their jobs due to caregiving responsibilities or other pandemic-related pressures on home life. Returnships can include skills training, mentors, and other support to help candidates re-acclimate to the workforce.

A robust employee development program that is deeply embedded in your culture, authentically practiced by leadership, and supported among employees will be talked about inside and outside of your organization. Supporting employees in this way will soon land you a reputation as a preferred employer in the community. Candidates will seek you out. This is how you will attract top talent to your organization.

3. Fill your vacancies.

Excessive vacancies create a strain on your organization that can be felt in the overtime necessary to serve clients or, worse, the loss of revenue when you cannot take on new client projects. Long hours and ever-increasing work demands create stress and burnout among your workers.  As citizens of the world community, we have thankfully been sensitized to the importance of mental well-being and are more mindful of the work environment we create. Employee development programs provide employees with improved self-perceptions of their capabilities and promote feelings of meaning and purpose in their work. They give you the edge you need to compete for the best employees and reduce vacancies.

It is important to think strategically about how to attract active and passive candidates. Approach marketing your organization to candidates no less creatively than when you market your products and services. Employee development should be proudly featured among the benefits you offer. According to the Society for Human Resource Management, skills training is the third most important job perk that individuals ages 18-24 look for in a new job. Sixty-six percent of this age group ranked skills training as the third-most important benefit. Only health insurance and disability benefits ranked higher.

CultureAmp, a technology company focused on employee experience, recently conducted a survey of 9.5 million employees in more than 5500 organizations. They found that growth and development are key drivers of engagement, retention, and business performance. Conversely, lack of development opportunities is the most-cited reason an employee leaves an employer. In the current labor market, the candidate is driving the conversation. Yes, you are interviewing your candidate for skills, experience, and fit with your organization. But the candidate is likewise evaluating your organization and the specific job opportunity for alignment with their personal and professional aspirations. Today’s sophisticated candidate wants to know about your organization’s commitment to social justice issues, your involvement in the local or global community, and your investment in their professional growth.

4. Retain the employees you already have.

Today’s workforce is multi-generational, bringing a rich diversity of talents along with differences in what job seekers want from the employment relationship. It includes:  

  • Boomers (born 1946-1964)
  • Gen X (born 1965-1980)
  • Gen Y (also called Millennials, born 1981-1996)
  • Gen Z (born 1997-2012)

Understanding the generational cohorts will help you to retain them and their deep institutional knowledge. Millennials account for 35% of the total working population today and are expected to make up 75% of the workforce by 2025. The projected explosive growth of this cohort should convince you to take special notice of their behaviors.  

For example, Millennials switch jobs three times more often than other cohorts. A 2023 TeamStage survey reveals that 43% of Millennials plan to switch jobs in two years, and more than 20% report having already changed jobs within the last twelve months.

How can you stand in the way of this exodus?

For starters, research shows that Millennials love professional development. So, the game plan for attracting and retaining them should include opportunities to acquire new skills and preparation for larger organizational roles.

And they’re not alone. In a 2023 survey by Deloitte Consulting, 46% of Boomers and 43% of Gen Z respondents agreed that intergenerational mentorship for their professional and personal development is important.  Similarly, another survey that examined Gen Z in the workplace concluded: “Learning opportunities are a top factor in Gen Z’s job hunt – showing that Gen-Zers prioritize career development and find learning benefits highly appealing.”

Finally, Gen Xers are known for their fierce desire to protect their work-life balance. Having seen many of their parents lose jobs in corporate shuffles, Gen X-ers are only loyal to an organization when their personal needs are met. Thus, the way to tap into a Gen X-er’s loyalty is to provide work-life balance, recognition, and ample training and development opportunities.

5. Upskill your workforce.

This effort is vital if you want employees to be adaptable and resilient when faced with the rapid growth and shifts in the market for your products or services. Employees consistently report that a genuine commitment from their organization to support skill-building is essential to their job satisfaction. For many, it is non-negotiable. Without it, they will leave to find it. Conversely, your dedication to employee training and development leads to a willingness on the employee’s part to spend their time and energy on your organization and its mission. It encourages them to be fully engaged to the organization’s benefit.

Case Study: Large employers may require technology to manage their employee development efforts. In a recent case study of an 8,000+ employee tech manufacturer, employees who already had access to robust online skills training wanted more on-the-job learning opportunities. The company needed a way to match employees to opportunities in different roles or teams. The company also had to overcome managers’ unwillingness to share their employees. Learning leaders turned to an experiential learning (learning by doing) platform. This made it possible for managers to have broader access to skilled resources they might need, and they became more willing to share their employees with other teams. Workers began to build skills, and managers were able to tackle lagging projects. While some employees pursued chances to build new skills, others offered a skill they had already mastered to gain exposure to a new manager or team. In the 3-month pilot of this program, the company created 74 opportunities for learners and connected 27 employees with skill-building roles at a savings of at least $50,000 for the company.

6. Earn a reputation as a preferred employer or an employer of choice.

Employee development engenders goodwill and loyalty not only in your workforce but in your customer base as well. Customers are employers too. They benefit from an association with other top-tier employers who have a positive reputation of being a stable and efficiently run organization–not one where employees are running out the door. An effective employee development program positions you to stand out among your peers and with your customers.

7. Strengthen your management team.

Employee development extends to your managers as you build a team that is equipped to meet the challenges now and in the future. Managers have the dual roles of investing in their own development plans and those of their team at the same time. New managers may need training and practice in managing remote workers. Seasoned managers may need to learn motivational techniques or decision-making. All managers, who are highly influential with their teams, will need to learn how best to support your employee development initiatives.

8. Establish a culture of continuous learning to build a workforce that is resilient and prepared to encounter and adapt to shifts in the economy.

Employee development, done well, must become a cornerstone of your culture. When continuous learning is a core value in your organization, word will spread within your community, within your industry, and in all the places where you seek talent. You will earn a deserved reputation as an employer of choice.

💡Explore This Idea: Some employers are reviving an idea from the early 1960s, labor hoarding, to weather business slowdowns. It is so difficult and expensive to hire and train new employees that employers are getting creative to avoid laying anyone off. To retain and engage workers during slow periods, companies focus on employee development. This approach allows them to expand their workforce’s skills and build employee loyalty at the same time.

9. Prepare your team, top to bottom, to innovate.

Employee development creates the opportunity for employees to learn and to grow from mistakes. When the work environment not only tolerates but encourages mistakes as a path to learning, you are fostering a team that is willing to think of bold ideas, advocate for them, and try them without fear of failing.

“The greatest difference and advantage of experiential learning over traditional training is the hands-on element. It allows employees to be fully immersed and engaged in the projects, experience, problem-solving, and implementation. Most importantly, it provides room to learn from errors. Experience gained through such immersion, coupled with theory, is the best trainer and confidence booster.”

-  Lillit Cholakian, NewGen Global Leaders

10. Meet stakeholder expectations.

Your Board of Directors and other stakeholders will soon, if they do not already, expect you to formulate a strategy around employee development. The idea that a successful organization would not have a culture of employee development is unthinkable in today’s complex business environment. An ongoing program to expand the skills of your workforce is a winning strategy to meet business demands and proactively meet the expectations of your stakeholders.

Getting started with employee development

Despite all this compelling evidence of the value of training and development for your team, you may still worry about the wisdom of investing in your employees when it may prepare them to leave you for another job. But, as Henry Ford reminds us: “The only thing worse than training your employees and having them leave is not training them and having them stay.” So, invest generously and boldly in the development of your employees and watch your company's profits, culture, and reputation flourish as a result.  

Employee development, however, starts with getting to know your people — understanding their strengths, weaknesses, and areas they’d be keen on developing in. Having an overview of needs will also help shape the program for the entire organization. Such details can be discovered in day-to-day interactions between managers and their direct reports, as well as on a peer-to-peer level. However, to understand this in a more targeted manner, it's encouraged to include development-related topics as a recurring part of your 1:1 and Performance Review meetings.

1:1 meetings are regular meetings between managers and their direct reports and are a great place to identify employee-specific growth areas and development needs that complement their career and company goals. Similarly, as Performance Reviews (aka performance appraisals) are bi-directional meetings for managers and their direct reports to have conversations around performance, goals, and career growth, it's natural to loop development plans in these meetings as well. Based on current or past performance, managers and their direct reports may mutually align on development areas and next steps that align with the organization's program.

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