With the extraordinary change driven by the pandemic and its ongoing effects, employers have understandably been anxious about the fallout. Headlines touting the “Great Resignation” and “Freelance Revolution” have hinted at the upheaval in workplaces across the country, as employees have started reassessing exactly how and why they work.
But there’s been a surprising silver lining for employers: Employees who have been through the changes of the past two years are hungry to learn. A 2021 global survey from Boston Consulting Group and recruiting firm The Network reported on by the Society for Human Resource Management (SHRM) found that more than two-thirds of workers wanted to learn new skills that they could parlay into “new roles that offer more job security and opportunity.” That means there’s a tremendous opportunity for firms that want to attract and retain ambitious employees. Experts say that workers are looking to grow their skills and abilities, and to do it they’re drawn to workplaces that are investing in employee development.
“Professional development is a must in today's world,” said Barbara McMahan, organizational development consultant and President of leadership development and executive coaching firm Atticus Consulting. “Millennials and Gen Z employees in particular are seeking out companies that emphasize growth — and are willing to leave organizations that don’t.”
It’s no wonder: Employee training and development gives team members enhanced skillsets and new competencies, and can open doors and create opportunities for advancement for those who participate. But employee development isn’t just a boon for employees — it has tangible, measurable benefits for companies, too. However, the creation and execution of these programs has to be thoughtful and intentional for the initiatives to be effective. Below, we’ll take a closer look at which employee development programs pay the greatest dividends — for both employers and employees — and how companies should measure their return on investment when it comes to employee development.
What Are Employee Development Programs?
Employee development programs are any number of a broad suite of initiatives designed to teach employees new skills; enhance their existing capabilities; and give them the talents, abilities, or knowledge they need to better perform their jobs or tackle new, more challenging roles. Programs can include certifications and trainings, coaching, mentoring, on-the-job training, seminars, and more. They can cover almost any professional skill, and can be specific to a given professional role or cover broadly applicable career skills or even self-development topics. And they can be as formal or informal as the firms that offer them would like them to be.
At most companies, employee development comes through a number of different channels. Citing the influential book The Lessons of Experience: How Successful Executives Develop on the Job by researchers from leadership development nonprofit Center for Creative Leadership (CCL), McMahan noted that 70% of development comes from on-the-job experiences and challenges, 20% from other people, and 10% from courses and formal training.
In particular, she said, companies looking to beef up their employee career development programs can consider including initiatives as varied as “job rotations that allow the employee to experience different organizational functions,…a short-term assignment, job shadowing, [or] stretch assignments like leading due diligence on an M&A initiative, [or] taking on an international assignment, joining a strategic task force such as one focused on improving organizational health, or heading up an ERG (Employee Resource Group) initiative.”
Which Employee Development Programs Deliver the Best Results?
What kind of employee development plan is right for each organization depends on company goals; the right kind of program or programs will flow from each firm’s mission, needs, and strategic priorities. That being said, experts noted that in general, firms looking to bolster employee performance and attract top talent should focus their efforts on building a company culture of learning.
“Managers I have worked with have found the greatest value in initiatives that define career growth as expanding experience, knowledge, and expertise, with professional growth as the cornerstone, versus a promotion-focused culture that emphasizes upward movement and job-title progression,” said Christine Render, founder of talent management coaching and consulting firm ScaleUp Coaching and Consulting. “Offering stretch and high-profile assignments as well as job rotations are great ways to achieve a [work] culture that values experience.”
But as you plan your employee development initiatives, there are some key things you’ll want to avoid, too. For example, creating a program that is too abstract or too disconnected from day-to-day needs will discourage deep engagement from employees. Worse still, experts warned, are programs that make learning a burden.
“Development opportunities that add extensive time to an employee’s workload, or involve content that is not appropriately aligned to an employee’s job level or expertise, are not worth the time and effort because employees are likely to passively participate and just check the box,” cautioned Render. “Also, employees are less likely to prioritize development opportunities [that] do not clearly convey how the outcome will benefit them.”
5 Reasons to Invest in Employee Development Programs
When it comes to the business case for creating — or bolstering — your firm’s employee development program, experts said there are some compelling arguments. Here are five of the top reasons companies should invest in employee development programs.
1. A More Skilled Workforce
A major advantage of employee development programs is that they can strategically target the skills and abilities that a given employee needs to better perform their role, or the know-how that the company as a whole is lacking. And they’re especially useful for companies looking to bolster their in-house talent and do more promotion from within.
According to Jes Osrow, cofounder and COO of Human Resources strategy and DEIBA (Diversity, Equity, Inclusion, Belonging, and Accessibility) consulting firm The Rise Journey, employee development can be an essential stepping stone to prepare employees for the next stages of their careers. “When an employee comes in the door, they only have a certain level of knowledge. As they grow and expand in their role, they gain more knowledge, but it doesn't necessarily heighten or give them depth into what they need to know to perform better or at a higher level, or get a raise or promotion,” she said. “By investing in your employees, you're gaining return on their performance.”
2. Increased Buy-In
Employees who feel that their companies are invested in them return the favor, experts noted. “Effective team development and performance management drives engagement and commitment toward purpose and business objectives,” said Julie Burmania, HR business partner with Grand Rapids, MI-based full-service Human Resources firm HR Collaborative. This is especially true, she said, if companies explicitly tie employee development goals to broader strategic or operational targets.
“Employees who understand how their efforts contribute to the organization's success will be empowered and engaged in their work, which increases their discretionary effort and performance,” she said.
3. A More Prepared Team
Employees who are actively building their skills, especially those who are cross-training in other positions or on job rotations, aren’t just improving their abilities to perform their current role; they’re also helping to build a more nimble, flexible organization — and one that’s better able to respond to a dynamic market.
“Employees who have completed assignments in different functions or locations add more value due to their well-rounded understanding of the business than employees who remain in one function during their entire career,” Render noted. “When many employees benefit from these experiences on a recurring basis, it has a multiplier effect across the entire company, improving overall organizational performance. The company also gains a flexible, agile workforce prepared to meet business needs.”
4. A More Robust Talent Pipeline
Used strategically, cross-training and targeted skill-building can be a smart way to foster a culture of advancement and upward mobility for employees interested in moving into more senior roles — and cut down on recruitment and onboarding burdens at the same time, Render pointed out.
When employees are taking on new responsibilities or taking time away from their core duties for training and development opportunities, it creates a chance for other, more junior staffers to step up. And when an employee is engaged elsewhere, managers have “an opportunity to develop another individual into the temporarily vacant role,” said Render. “Sometimes a company will have a chain of multiple employees who each step up in some way to fill the gap, resulting in multiple development opportunities — a win for everyone!”
5. More Engaged Employees and Reduced Employee Turnover
“Offering leadership and management training for employees demonstrates that you want to help them further their career progress and support their advancement within the company,” said Debbie Winkelbauer, CEO of biotech and life sciences recruitment firm SurfSearch. “This encourages individual contributors to bring their best selves to the workplace because they feel the company is committed to their growth.”
Useful, actionable training programs contribute directly to employee retention, said Render. Selecting appropriate options means “careers can be customized to meet an employee’s aspirations, and employees feel empowered to influence their career path,” she said. “All of these outcomes better position a company to retain their employees."
The investment in employee development pays off not just in an improved, energizing culture of learning, but in a number of measurable ways, too. Reducing turnover and improving retention and referral rates can have financial impacts that the accounting department can track, and a growing number of employees ready to take on new challenges or in the pipeline for specific roles in the future is another metric that management should be tracking. The same goes for employee growth, as well as any measures of employees passing certifications, adding skills, or taking on new responsibilities. And measurements of employee engagement and job satisfaction can show up in surveys, employee net promoter scores (eNPS), and more.
Improved performance varies by industry, but in general, speed, error rates, productivity, and other measures of output can all be positively affected by a more skilled workforce. And more intangible, but highly impactful benefits nonetheless, include a boost to staff morale, increased focus of workers, and the potential for new innovation and inspiration made possible when you have an engaged, satisfied, fulfilled workforce.
While there are costs — financially, organizationally, and operationally — to investing in a robust employee training and development program, the bottom line, experts agreed, is that the investment pays off. As Render put it, “I’ve never worked with a manager who felt the expense outweighed the return on investment.”