Why Offer Professional Development to Your Employees?
In her book, Profit at the Bottom of the Ladder: Creating Value by Investing in Your Workforce, author Jody Heymann reports the following. Research has found that firms offering training opportunities attract more competent workers who are also more likely to stay with the firm. In addition, the studies conducted by the author showed that companies can substantially profit from providing the least-advantaged workers, not just professional and management level employees, with training opportunities, both general and job-specific.
A better question to ask is, “What happens if we don’t invest in training our people, and they stay?”
(Read more about our leadership and management development services.)
Tangible Results from “Soft Skills” Development
Investment in people through professional development can make many business leaders and CEOs uneasy, especially for those running small and mid-sized enterprises. When they invest in machines, buildings, or materials, for example, the return on that investment for the business is usually clear and well-understood.
When it comes to investing in their people, typical concerns are:
- People can leave, and if they do, the investment walks out the door with them.
- The return on investment from people development is hard to calculate accurately.
The truth is several key areas are directly affected when leadership and related skills are either missing or poorly done. These have well-known metrics which can be tracked and linked to training and development outcomes.
EMPLOYEE TURNOVER
Studies show over and over again that the number one reason people leave a company is due to poor behavior of their direct manager’s or supervisor’s behavior. The cost of replacing a salaried employee is estimated to be 6 to 9 months of the employee’s salary. A CAP study found that replacing a $10/hour employee costs $3,328. Imagine the cost to the business when top sales talent leaves for controllable people reasons.
EMPLOYEE SATISFACTION
For the employees who stay, those who see high turnover tend to disengage and lose productivity. Richard Branson, a successful entrepreneur many times, over has said:
“If your best people aren’t growing in their careers as your business gains traction and expands, they will quickly lose enthusiasm for their work. And before you know it, you’ll be dealing with unsatisfied customers as well as unsatisfied employees.”
ERRORS, REWORK, CANCELLED ORDERS
Performance and productivity as a whole suffers when employees do not have a clear idea of what is expected of them. Ben Horowitz was very frustrated with how little value his program managers contributed to the business. He started with simple training that he did himself and was shocked at the dramatic improvement of his team’s performance.
Some questions to consider:
- How much does a disruptive or domineering supervisor or manager cost your company in terms of employee productivity and turnover?
- What is your turnover rate and the recruitment and hiring costs that go with it?
- What is your customer retention rate and the factors that drive it?
For companies of all sizes, investing in the development of ‘soft skills’ can provide as great a return—or greater—than traditional capital investment.
Align Professional Development with Company Vision and Goals
o align professional development with your goals, a good time to make the decision of how much to invest in people development is during the creation or update of your business strategy. Having staff whose skills and knowledge are basically the same as they were when they joined your company means trying to achieve the vision with people whose skills are not current.
Your vision and goals for the future will be implemented in a world that’s changing every day. Looking at where you are and where you want to be will tell you what role training and development needs to play in achieving your strategy.
(Read more about how we can help you establish vision and strategy.)
In today’s world, skills such as leadership, management, sales, teamwork, and communication are becoming vital components of every company’s value proposition to their customers. Everyone can buy the same technology, but no two companies can have the same set of employees. With support and training, your employees’ knowledge, attitudes, skills and behaviors will significantly contribute to setting you apart from the competition.
Why Offer Professional Development to Your Employees?
In her book, Profit at the Bottom of the Ladder: Creating Value by Investing in Your Workforce, author Jody Heymann reports the following. Research has found that firms offering training opportunities attract more competent workers who are also more likely to stay with the firm. In addition, the studies conducted by the author showed that companies can substantially profit from providing the least-advantaged workers, not just professional and management level employees, with training opportunities, both general and job-specific.
A better question to ask is, “What happens if we don’t invest in training our people, and they stay?”
(Read more about our leadership and management development services.)