Deciding to invest in the growth of your employees is more than just a question of budget. If your company chooses not to invest in employee development, you’re setting your business up for lower employee engagement rates, lower chances of attracting and retaining talent, and employee stagnation—all of which deeply affect your company’s productivity.
If you want your company to reap the benefits of increased productivity and stronger staff retention, investing in employee development is a great place to start. Here’s why a learning and development (L&D) program is crucial to your company’s success.
The Advantages of L&D Opportunities
Learning and development programs shouldn’t be treated as an afterthought, but rather part of an overall business strategy. Offering employee development opportunities helps your company compete in your market in a few key ways:
It leads to better recruitment and retention. The talent shortage is real. The Conference Board’s annual survey of top executives found that failure to attract and retain talent is the top concern for CEOs worldwide. Offering L&D opportunities can help your company attract—and keep—top talent.
As employers turn to the Millennial generation to fill the shoes of retiring Baby Boomers, this becomes even more important. Research shows that 60% of Millennials want training to develop their leadership skills. Ignoring training could be a major loss: 71% of Millennials are likely to leave an organization in 2 years if they are not satisfied with how their leadership skills are being developed.
When you neglect employee learning and development, you worsen an already-serious talent shortage. Top performing employees are attracted to workplaces that will help them cultivate their skills. A structured, accessible employee development program can draw these top performing workers to your company, while a clear lack of growth and training opportunities could turn them away.
It helps you address the skills gap. In a 2015 Association for Talent Development (ATD) study, 84% of respondents said there was a skills gap in their organization. And 35% believed that cuts to talent development and a lack of commitment to talent development initiatives contributed to this skill gap.
Providing your team with an employee development solution is one of the ways you can help to bridge the skills gap. With a structured learning program, you can encourage employees to hone skills that will directly contribute to the future success of your company. Training doesn’t just benefit the employee individually; it benefits the entire business to have staff continually building the knowledge and expertise needed to fill gaps in existing skill sets.
Addressing the skills gap in your company through training and development also helps support succession planning for future company leadership. With a strong employee development program, your team members will not only sharpen their job-related skills, but can also prepare to fill future leadership roles as the company grows.
It promotes innovation. As technologies change, so do the skills your employees need. If these skills aren’t supported, a few things can happen: employees may start to lag in productivity, your skills gap may grow, and your brand may lack creativity when compared to your competition.
One study found that training and development opportunities for employees can help companies save around $70,000 annually, with an added 10% increase in employee productivity.
Talent and development programs are critical for encouraging creative thinking and innovation at your company. Continual training enables employees to be better equipped to use company resources and be more efficient at their jobs.
How to Budget for Employee Training
Adopt a strategic approach. Before you start to think in terms of cost, identify the learning needs of your employees. Strategically link your development opportunities back to organizational and departmental goals.
When considering how to best approach your employee development plan, consider the following questions:
- What types of training will be most effective for our employees’ learning styles?
- What skills are important for employees to be productive in their roles?
- Which roles have the biggest skill gaps?
- How will we make training easily available to all employees?
- Are employees set up for success in achieving personal and company goals? If not, what skills or resources do they need?
- How will individual career goals match up with our employee development program?
- How will we offer performance metrics? What method will we use for feedback?
- How will employee development reflect the company’s needs? Is development in line with the company’s structure?
Answering these questions will help you determine where to focus your development opportunities, and make sure your organization offers training that’s valuable to each individual employee and the company as a whole.
Develop a budget. Once you’ve identified your company’s learning needs, it’s time to develop a budget. If you are deterred by the costs of setting up a learning program, remember that hiring new staff is more costly than training your employees. It’s helpful to think of training as an investment; your company will benefit from more skilled and more productive employees.
Your L&D budget might include some (or all) of the following:
- Learning delivery (costs of classes, eLearning, etc.)
- Learning materials (workbooks, videos, tools, etc.)
- Ongoing subscription costs to learning platforms
- Staff time
- Instructor or facilitator fees
- Travel, accommodation, and meal expenses required to participate in professional development opportunities (if applicable)
Your employee development budget will vary depending on your company’s size, industry, scope of training programs, new staff, and new technologies. This number should be a recurring item in your budget, quarterly or annually. For employee development to be successful, it must be an ongoing process.
Employee development that won’t break the bank. There are many ways to minimize the costs of your employee development program, while still giving employees access to high-quality learning opportunities.
Consider some of the following options for cost-effective employee development:
- Offer mentoring and coaching. Employees who received mentoring were promoted five times more often than people who don’t have mentors. Mentorship helps employees learn new skills and refine existing ones.
- Teach employees to direct their own career development. Provide employees with journals to capture and codify their learning. Encourage them to take self-guided courses to improve their skills.
- Invest in online learning tools. Online learning can be more affordable than traditional in-person training events. An added benefit of using online learning platforms is that employees can learn at their own pace, on a schedule that fits with their workload.
- Host weekly or monthly “Lunch and Learn” events. Ask employees what they’d like to learn about or topics they’d like to teach to their colleagues. Lunch and Learn opportunities afford spaces for collaboration among all employees.
- Identify training leaders within your company. Train one employee with strong communication and teaching skills and have them help train other colleagues.
- Look to associations or trade groups. Some industry associations offer discounted or free learning programs for members.
Employee development can make your recruitment process easier, minimize the skills gap at your company, and help your company become more innovative and productive. And it doesn’t have to cost an arm and a leg to start an employee development program. Investing in the skills of your employees is two-fold: Your employees will feel valued and motivated at work, and your company will benefit from increased productivity and growth.
|Chris Lennon is Vice President of Product Management at BirdDogHR. Chris is an active participant in the talent management community bringing over 18 years of experience to BirdDogHR. He has presented at numerous industry events and has been quoted as an industry expert in leading publications like Talent Management magazine, CLO magazine, New Talent Times, TLNT, and HR Bartender.|