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5 Reasons it Pays to Invest in Employee Development

August 20, 2020
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You don’t have to convince HR teams to prioritize employee growth. Survey data from LinkedIn shows that corporate investment in learning and development (L&D) is at an all-time high, with over half of HR teams expecting to spend more on training going into 2021.

You’re sold on the value of job leveling matrices, competencies, and employee growth plans. But the C-suite? Winning their buy-in might be a challenge, but it’s certainly not one you can’t overcome.  Here’s why investing in employee development is always worth it.

1. It saves on recruiting and onboarding.

Building a team takes time. And while the ideal candidates might be out there, they’re seldom the ones looking. Companies that lean on hiring in lieu of developing talent or promoting from within do so at a cost.

Matt Woodley, founder of MoverFocus, isn’t just worried about losing recruiting dollars. Getting new hires up to speed is often just as costly. Even if you end up finding the “perfect” hire with all the right skills, they’ll still need time to ramp up and learn company nuances that aren’t transferable from job to job.

“Every hour spent on new hire training is an hour that the employee could be spending directly earning the company money. If you already have a great employee, investing in their future is far more sensible than replacing them with another worker. A business saves money by retraining employees. Less time is spent scouring for talent because it's much easier to promote those who are available when they learn the right skills,” Woodley said.

There’s ample evidence that employees will return the favor by sticking around for the long haul. One survey found that 94% of employees said they’d stay at their companies longer if they invested in their career growth. And given the high cost of turnover, that’s more than reason enough to prioritize development.

“When employers value and encourage their employees, they see increased levels of loyalty. Employees who know that they are being developed by their companies work harder and stay longer. The investment in time and effort is a great pay-off for companies,” said Dr. Belinda Wee, associate professor at Husson University’s School of Business and Management.

2. Succession planning is easier.

We’ve all worked with that one, truly indispensable teammate. Inevitably, they leave to pursue other opportunities — bringing the company into disarray as junior employees try to juggle responsibilities left behind. While key departures always sting, investing in employee career development helps soften the blow.

“One way of having an effective succession plan is to provide mentorship and development opportunities to employees,” Dr. Wee said. By actively encouraging the development of soft and technical skills, HR teams and managers can make these often painful transitions less disruptive. Cross-trained workers can pick up the departing employee’s responsibilities or, in some cases, even slot into the role permanently. And given data that shows internal replacements usually outperform external ones, there’s a business case to be made for that as well.

“Some knowledge is priceless, so it’s just a much better investment to promote and train current employees. Succession planning ensures that your company has a history, lasting relationships, and a base of employees who are invested in the outcomes of the company — because the company has invested in them as well,” said Amy McWaters, CEO at The Hamper Emporium

3. It empowers employees and their managers. 

When employees possess only the skills they need for today, they have a harder time adapting to change or thinking outside of the box. Studies show that when companies give employees room to grow, they tend to be rewarded by higher engagement metrics and more creative outputs. Individual contributors also become less reliant on management in their daily decision-making, making for more agile teams.

“Employee development helps employees learn new skills and feel empowered within their workplace. These individuals have a greater sense of autonomy, value, and confidence in their work. They also become more effective, generating more revenue,” said Shradha Kumari, HR Manager at SurveySensum.

Worried that managers might push back due to the time commitment? You might be surprised. “One benefit that isn't talked about as much is management bandwidth. Your managers and leaders only have so much time and attention, and if you don't train your people then this bandwidth will quickly be absorbed by the small hiccups that happen day-to-day,” said Michael Alexis, CEO of TeamBuilding.

“By investing in training, your employees become more self-sufficient, and this frees up your management and leadership teams to focus on organizational goals and larger structural initiatives instead.”

4. It’s critical to your employer brand.

Private companies aren’t that private. Between employer-rating sites like Glassdoor and anonymous networks like Blind, job candidates know what happens behind closed doors at your company.

“Today’s workers expect more reciprocity. Their work is contributing to the success of the company, and they want the company to contribute to their long-term success in return. Offering professional development and skill training attracts employees who are ambitious and have a growth mindset,” said Matt Erhard, Managing Partner at Summit Search Group.

Bottom line? If your employer brand is your reputation to the outside world, prioritizing internal growth might be the surest way to boost your street cred.

“Having a reputation for developing, recognizing, and promoting employees not only encourages current employees to stay, but also encourages potential external hires to join the organization,” Dr. Wee said. Experts recommended highlighting some of these success stories on your careers page. “This sends the message that prospective employees have a future with the organization.”

5. Skilled employees are your differentiator. 

Automation and artificial intelligence have resulted in a “skills gap” across all industries. As companies look to hire for more technical roles, the talent pool with those skills hasn’t grown to meet demand. A Deloitte report predicts that over the next ten years, over 2.4 million positions could go unfilled as a result.

In response, companies have two choices: compete for talent or skip the rat race altogether by developing talent from within.

“Developing employees is a way to curb the skills shortage issue and allow companies to stay ahead of the competition,” Dr. Wee said. “To stay competitive, investing in employee learning and development is a matter of life and death for organizations. Employees are valuable assets. They should be nurtured and developed to meet the inevitable changes companies will face in the future.”

It’s not just technical skills that are in demand. Automation has also played a role in elevating the importance of soft skills. LinkedIn recently identified leadership, management, creative thinking, and communication as the most in-demand training programs for teams right now.

“Professional development is all about giving employees new skills and strengthening their existing ones. Leadership development courses can be especially valuable in this regard, giving your supervisors and managers the skills they need to get the most out of their teams,” Erhard said.



You’ve heard the cliche about employees being your company’s most valuable asset. To Nelson Sherwin, HR Manager at PEO Compare, today’s focus on development iterates on the old but still true saying. Like conventional investments, those “assets” appreciate with age.

“You want your employees to not only be the best they can be in terms of their jobs, but you want them to be satisfied, happy, motivated, and feel like they have plenty of room to grow and opportunities for advancement and diversity of work,” Sherwin said.

“This isn’t just an investment in your employees, it’s an investment in your company. The better your people are, the better your company is.”