Did you know that a staggering 94% of workers would stay longer if companies invested in employee development? This data reveals that professional development is more than just another corporate buzzword. It’s a highly-valued employee benefit in today’s workforce.
And it’s not just staff that benefits from employee development training. Organizations reap huge rewards too. From boosted performance to lower staff turnover, investing in employees’ development is good for the bottom line.
With so much at stake (employee turnover costs, on average, 1.5-2 times the amount of the current staff member’s salary, according to LinkedIn), it’s hardly surprising that businesses are throwing the kitchen sink at employee development.
But how can you make it effective and get that oh-so-elusive ROI? Keep reading, and all will be revealed.
Our A-Z guide to employee development breaks down everything you need to know, including:
- What employee development is
- The difference between employee development, employee training, and talent management
- The benefits of employee development programs
- Essential employee development best practices
What is employee development?
Employee development is a joint effort between staff and employers to improve the skills and competencies of the workforce.
Almost every industry is rapidly changing with new technologies and trends, so employee development is a must if you want to stay competitive.
An employee development program can include various forms of employee training, as well as mentoring, seminars, workshops, and microlearning modules.
The goal is to arm employees with the training and knowledge to hone their skills and become more competent at their jobs. It also prepares them to progress in the business, moving up the corporate ladder or even laterally within the business.
While an individual’s career development is ultimately in their own hands, there are some pretty big incentives for employers to encourage staff to pursue development opportunities—and this goes for both external and internal opportunities.
Next, we clear up some common misconceptions between employee development and employee training.
Employee development vs. employee training
And now, we look at that age-old question; what’s the difference between employee development and employee training?
The main difference is that employee training focuses on short-term goals giving staff the skills they need at the time to do their jobs right.
Conversely, employee development is the long-term process of helping employees grow as professionals and individuals.
Employee training is a part of employee development, but employee development is a wider concept.
Examples of employee training include:
- Onboarding new employees
- Sales and compliance training
- And other short-term learning experiences with defined goals and learning objectives.
On the other hand, an employee development program is all about the long term. A successful employee development program facilitates companies in building long-term resilience to make sure their employees can face future challenges.
It’s not just about new technical skills. As part of the employee development plan, team members should also have opportunities to improve their soft skills and take part in leadership training. This prepares future leaders with the leadership skills they need.
So, we could say that employee training is all about the here and now, while employee development is about what we can become in the future. Employee development helps the entire organization adopt a growth mindset and a learning culture.
Up next, what exactly is the difference between employee development and talent management? Read on to find out.
Employee development vs. talent management
The difference between employee development and talent management is what each of them focuses on. Employee development concentrates on developing the skills and competencies of employees. Talent management, on the other hand, is about hiring the best talent and developing its potential to the maximum.
Talent management, sometimes called talent development, also covers activities such as succession planning and exploring and using the hidden qualities of the existing workforce.
Employee development, as we already mentioned, has to do with developing the skill sets and knowledge of the workforce. The point of an effective employee development program is to facilitate learning at every level of the organization and foster a learning culture.
In brief, talent management means hiring top talent and then using their talents to their full potential. Employee development is the process of giving employees the right skills and competencies to boost employee performance and engagement.
Now that we’ve cleared up exactly what employee development is, it’s time to dive into its benefits.
Five benefits of employee development programs
We won’t beat around the bush—investing in employee training and development is a total win-win.
You’ll be driving employee engagement alongside your business goals. Employees need and want professional development opportunities. So, creating a work environment that offers them is a crucial task for any Human Resources department.
1. Higher employee retention rates
Employee retention is a high priority for any organization. According to a 2018 survey reported by SHRM, more than one in four workers leave their company for another every year.
We don’t have to explain why potentially losing a quarter of your workforce is bad.
But it’s not all so grim. There are ways to boost employee retention rates, and investing in employee development is one of them.
Here’s an important stat coming from the 2022 LinkedIn Workplace Learning Report. Employees who feel that they don’t use their skills to their fullest potential are 10 times more likely to start looking for another job.
From these stats, there’s a clear conclusion—companies have to support their employees in achieving their career goals. If they don’t, employees will go to someone who does.
If the Great Resignation reveals anything, it’s that employee satisfaction doesn’t just hinge on remuneration. Satisfied employees, who become loyal employees, need to feel like they’re advancing professionally and personally.
Millennial workers, in particular, expect more learning opportunities in the workplace. According to a 2021 Monster survey, 45% of workers would be more likely to stay in their current position if the company offered more professional development opportunities.
If you provide these learning experiences, your investment will reward you with higher retention rates.
2. Reduced employee turnover
We already quoted some interesting stats, but this one takes the cake.
You may want to sit down for this one.
Businesses in the US lose $1 trillion annually due to voluntary employee turnover.
If that doesn’t light a fire under your feet, we don’t know what would.
The importance of employee development has never been more clear. Companies need to do whatever it takes to achieve employee engagement and prevent turnover.
Thankfully, again, investing in various employee development programs can help. Whether it’s reskilling or upskilling, these programs can equip your workforce with valuable new skills and competencies.
This, in turn, makes employees more likely to stay at your company.
A recent study by Culture Amp found that employees without access to consistent development opportunities are two times more likely to leave within a year.
There’s never been a better time to engage your managers in employee development. After all, an engaged workforce is a loyal workforce.
And it’s not just about keeping employees. Having a high-impact employee development strategy does wonders for employer branding. In other words, it helps you attract top talent to your company. In today’s competitive job market, that’s quite the coup.
3. Reduced employee churn costs
We don’t know about you, but the trillion dollars lost to employee churn is still fresh in our minds.
At the same time, the skill gap issue is only becoming more pronounced. According to SHRM, 52% of HR professionals say that the skill gap is getting worse compared to previous years.
Reducing churn costs in this business landscape is paramount. One way to do this is to implement continuous training and employee development. Your employees get new skills and become more productive. This also increases employee satisfaction, which boosts retention rates.
Higher retention rates equal lower churn costs.
To top it all off, you’re also addressing the skills gap yourself by investing in your people rather than taking a chance in the uncertain job market.
From new hires to old veterans, every team member benefits from employee development and becomes more loyal as a result. This is why employee development needs to be a part of your retention strategy.
4. Increased customer satisfaction
Customer satisfaction is one of the key metrics of organizational success. Your customers ultimately drive your profitability.
So, how does employee development factor into this?
Well, engaged and satisfied employees are also more productive. Whether it’s the Sales team or the Marketing department, their performance will improve. As a result, this increase in productivity and success gets passed down to the consumers.
Your customers will notice if you have engaged employees or not. They will also notice if the level of service is satisfactory or not.
Simply put, engaged and satisfied workers who feel like they’re advancing their career paths will be better in interactions with customers.
Taking employee development seriously has another positive impact on business: employees who regularly update their skill sets are a competitive advantage because they are in tune with the trends and demands of the industry.
5. Stronger company culture
Much is being said about the importance of company culture. As a concept, it’s a bit unquantifiable.
Yet it’s one of those things that you notice when it’s there. Companies with strong cultures have engaged and productive employees. They provide learning opportunities and a lot of internal mobility.
To put it bluntly, these are the companies that people want to work for. Think Google, Apple, and the like.
But you don’t have to be Google or Apple to build a strong company culture.
One aspect of great company culture is how it approaches learning and development. Establishing a learning culture goes a long way toward creating a kind of work environment that people want to be a part of.
Being known as a company that takes employee development seriously will attract all kinds of job seekers, including top talent.
Now, we’ll discuss the four best practices for employee development.
Four best practices for effective employee development
Well, now that we’ve discussed all the benefits of employee development, you must be itching to know how to implement it in your organization.
That’s what we’re tackling in this part of the guide. Read through this, and you’ll be ready to start offering the kind of learning opportunities that employees today crave.
1. Specify your goals
When embarking on a new adventure, it’s always good to have a plan. Implementing an employee development program is no different.
Before you start outlining your employee development program, think about what kind of results you want to see in the long run.
Are you looking specifically to reduce employee turnover rates or bridge the skill gaps in your organization?
Asking questions like these will allow you to create programs that cover your specific needs and help you achieve your business goals.
A good thing to do before you kick off the development program is to take stock of how your employees and teams operate right now. Then, think about what needs to change to get them to where you want them to be.
In general, the employee development program should have three objectives:
- It should meet the individual needs of your employees. That way, they will feel engaged and invested in their work.
- The plan should address the long-term goals of your organization. Decide which benchmarks you want to focus on and the skills you need to develop in your employees to achieve them.
- The employee development program should address leadership training by helping team members grow and become ready to take on managerial roles.
2. Listen to your employees
Employee development is a two-way street. If you want the plan to engage your employees, you’ll have to listen to their needs.
We won’t get into the nitty gritty of adult learning theory here, but suffice it to say – your employees are adults. And if there’s one thing adults hate, it’s spending their time on activities they don’t find engaging and enriching.
So, taking employee feedback on board is important. Especially because the return on investment (ROI) of employee development is a bit hard to measure directly. Instead, you’ll need to look at the results of engagement surveys to see if you’re doing well.
This makes sense because engagement is the cornerstone of all other benefits of employee development.
You’ll have to listen to your employees anyway since employee development programs require you to take a personalized approach to be truly effective.
3. Personalize your employee development plans
Personalized employee development plans have a much higher chance of success than generic training content. It makes sense because every employee is an individual with their own ideas and needs.
If you just implement a selection of generic online courses, the odds are your team members won’t connect with the material very well. Any training program that fails to engage will also fail to change behaviors and impart new skills. It’s money down the drain.
Your managers should sit down with their direct reports and discuss what the employees enjoy and don’t enjoy about their work and how they hope to progress in their roles.
These meetings should be regular in order to track progress. Regular check-ins also give everyone a chance to brainstorm professional development opportunities.
Of course, employees need to be responsible for their progress, but managers should be there to encourage employees.
4. Use a powerful Learning Management System (LMS)
Once upon a time, all employee training had to be in person. This meant finding venues, taking time off work, and paying instructors.
These days, if you choose to use a powerful LMS, you can say goodbye to all those headaches (and extra costs).
LMSs power your employee development program. They can deliver online courses, integrate with webinar platforms, and track all kinds of metrics that will help you optimize your training programs.
LMSs also enable mobile learning and microlearning. These are very powerful tools that give employees the flexibility to approach learning at their own pace.
Personalized learning paths allow employers to tailor training to employees’ individual needs, making training more relevant and impactful (as well as plugging urgent skills gaps).
Whether you’ll rely on educational content from vendors or create your own, an LMS is an indispensable tool.
Even if you plan to mostly use face-to-face instruction, an LMS can still track performance, engagement, certification, and completion rates.
Or, you can use one to facilitate a blended learning approach.
Many organizations use LMSs to conduct everything from onboarding a new hire to sales training and beyond.
With so many different types of learning going on at once in most businesses, it makes sense to use a platform that can centralize it and keep track of all relevant metrics that produce actionable insights.
Next up, we’ll summarize what we’ve learned so far.
Wrapping up
Employee development is a necessity in today’s business environment. Employees need career development opportunities to feel engaged and valued.
What’s more, according to studies, they’re not shy about voting with their feet. Ignore professional development for too long, and you’ll be hemorrhaging money and good staff.
Smart organizations invest in employee development programs as a way to increase employee satisfaction and reduce turnover. At the center of this learning ecosystem is a high-powered LMS to create, deliver, and track development training activities.