Companies are always looking for ways to stay ahead of the competition. One strategy that has consistently proven to be effective in developing and maintaining a competitive edge is investing in employee development. But identifying a concrete ROI on employee development has long proven to be challenging for many organizations.
How can learning and development (L&D) leaders clearly, and in measurable ways, convey the value of investing in employee development to key organizational decision makers?
The Value of Employee Development
Employee development isn’t just “nice to have.” It’s a business imperative. Here are just a few examples of the key benefits of investing in employee development and how to measure the impact.
Boosting Productivity
Training and development programs can equip employees with new skills and knowledge, helping them to perform their tasks more efficiently. As they become more competent, the overall productivity of the company can increase.
How to measure? Establish performance baselines and then compare performance over time to demonstrate gains.
Enhancing Employee Retention
There’s ample evidence to support the fact that employees want to work for companies that support their development. LinkedIn’s 2023 Workplace Learning Report is one example.
Employees simply want to stay with a company that demonstrably invests in their growth and development. By offering opportunities for advancement and skill acquisition, companies can foster loyalty and reduce turnover rates.
How to measure? Retention can be measured over time—improvements can be tied back to L&D initiatives designed to offer development opportunities.
Building a Skilled Workforce
In the ever-evolving business landscape, having a team that’s up-to-date with the latest trends and technologies is crucial. That’s readily apparent in an environment where generative AI (Gen-AI) has exploded in adoption and interest in recent months.
Employee development programs can ensure that staff members are always at the forefront of industry advancements.
How to measure? Conducting a skills gap analysis, adopting initiatives to close the gaps, and measuring progress can help track this over time.
Promoting a Positive Company Culture
Investing in employee development can also foster a culture of continuous learning and growth. This can lead to increased job satisfaction and a more engaged workforce.
How to measure? The impact of company culture can be measured through employee engagement and pulse surveys.
The Return on Investment
While there might be initial costs associated with implementing employee development programs, the long-term benefits can far outweigh these expenses. But these impacts must be measured. Not only can companies see measurable improvements in productivity and retention, but they can also benefit from having a more adaptable and innovative team.
For companies looking to integrate employee development into their business strategy, it’s essential to:
- Assess organizational needs to identify areas where development is most needed.
- Offer a variety of training opportunities—from online courses to live workshops and seminars, and on-demand training—to meet diverse learning need and preferences.
- Measure the impact. Regularly evaluating the effectiveness of development programs can help refine L&D approaches and ensure companies are getting the best return on their investment.
Investing in employee development isn’t just beneficial for employees—it can also yield significant benefits for employers. By prioritizing employee growth and development, companies can position themselves for long-term success in the competitive business world both from an employee retention and a bottom line perspective.
Lin Grensing-Pophal is a Contributing Editor at HR Daily Advisor.