Ever since the COVID-19 pandemic and the subsequent onset of The Great Resignation, improving employee retention ranks as one of employers’ main concerns and priorities. Companies are investigating how to best encourage employees to stay put for as long as possible so they can maximize their return on investment in recruiting, hiring and training top talent.
As it turns out, there’s a critical link between employee development and retention.
According to a Society for Human Resource Management (SHRM) Research Institute report, 61 percent of human resources (HR) professionals cite lack of development and career advancement as the second most common reason for employee turnover behind inadequate compensation. For another 21 percent of HR professionals, lack of development is the number-one factor influencing retention.
Has your company considered what the delivery of thoughtful, high-quality employee development opportunities means for your retention? Here’s everything you need to know, including how to build an effective training and development program designed to help keep employees.
Why development matters to employees
Why do employees care about development? The answers get to the heart of why development impacts retention.
The main reasons why development matters to your workforce:
- It helps people do their jobs well, which increases their overall confidence, satisfaction and engagement. When someone feels like they’re good at something, they’re more enthusiastic about doing it and they feel happier about their current situation, right?
- It contributes to their personal and professional growth, enabling them to expand their skills and knowledge so they can take advantage of opportunities to assume greater responsibilities, qualify for promotions and leadership roles, earn more money and advance their careers. People don’t like to feel stagnant, as if they’re stuck in a rut doing the same thing repeatedly forever. Rather, they want to feel like they’re progressing toward something and have a path ahead. It’s natural for people to look ahead at what’s next – but you want them to look for what’s next within your company, not elsewhere.
- It signals to employees that their employer cares about them and is willing to invest in them. When people feel valued at their company, they’re less likely to leave.
The business case for employee development
Sometimes, employers adopt a mindset that development is expensive and risky. They fear that they’ll spend a lot of money investing in development only for the employees to take their newfound knowledge and skills elsewhere to a new job, so they deprioritize development.
But think of it this way: What if you don’t invest much in development and your employees stay put? That’s a risk, too – and it could hurt your company even more in the form of complacency, widened knowledge and skills gaps, diminished engagement and lack of innovation.
The bottom line: Employees leaving will always be a risk. However, committing to employee development improves the ability of your current workforce to perform at a high level while reducing the likelihood that employees will leave prematurely. It’s a win-win!
Other reasons why employers have a stake in employee development:
- It helps with recruitment, especially in a competitive job market, and can mitigate the costs of talent acquisition. Top-tier job candidates don’t want to join companies that aren’t committed to development.
- Employees feel valued, which leads to a more loyal and committed workforce.
- It improves the overall performance of your workforce as well as the quality of their work.
- Happier, more engaged employees tend to be even more productive and put in greater discretionary effort. They’re motivated to do better work so they can take advantage of opportunities to move forward on their career path.
- A focus on continuous learning promotes a culture of innovation and adaptability and gives your organization a reputation for being fresh, forward-looking, and relevant.
- Being open to new ideas and committed to constant improvement can help your company gain a competitive edge in the market.
- Advancing employees’ knowledge and skills is a critical part of succession planning. You need a bench of future leaders ready to go when the opportunity arises. It’s almost always easier to promote from within than recruit from outside.
- Upskilling your workforce is also critical for building a future-ready workplace. The world is constantly evolving, and your organization doesn’t want to be left behind.
- In some cases, development is required by law to maintain compliance.
- Encouraging employees to stay can help to reduce turnover costs.
Tips for creating a retention-boosting employee development program
1. Foster a continuous learning culture
Your workplace culture is the foundation upon which all actions in your company are built. It signals to your people what matters most to your organization and which values you share in common with them.
To that end, your workplace culture should embrace learning as a career-long endeavor – and your employees need to be aware that it’s an equally strong priority for your company as it is for them. After all, learning isn’t a one-and-done event. There’s always something new to learn because markets, industries, companies and even people are dynamic.
Promote your commitment to learning in:
- Your company’s core values
- Your employee handbook, as part of a training and continuing education policy or a promotion policy
- Company meetings
- Day-to-day conversations with individual employees
2. Get leadership buy-in
It’s important for leaders to commit to supporting employee growth via your company’s development program. This is because leadership will:
- Provide resources for learning initiatives
- Excuse employee absences and manage team schedules and workload to accommodate development activities
- Address budget constraints and any limitations in resources
- Lead by example through their own continuous learning and development
- Reinforce to the wider employee population how seriously the company takes development in communications and meetings
(When it comes to budget and resource constraints, remember that development doesn’t have to be costly or complex to be effective. There are plenty of lower-cost, easy-to-implement development ideas.)
Furthermore, direct managers overseeing their teams will need training in identifying optimal development opportunities and in providing the right type of coaching to their people.
3. Get employee buy-in
It’s clear that employees want development opportunities – you won’t need to convince many employees of the value in continuous learning. But they also want to have a voice and a seat at the table when it comes to decisions surrounding their own development.
Ask employees about:
- Their near-term and long-term career goals
- Their interests
- Which skills they feel are most relevant to their current job and future aspirations
- Which skills they feel strongest and weakest in
- How they enjoy learning (for example: self-paced study versus group class, instructor-led lecture format versus experiential learning or in-person versus remote learning)
Take these factors into account when creating a development program.
As a result, you can personalize development to employees’ individual needs and preferences and ensure that development is a meaningful, engaging and ultimately fulfilling exercise for them.
Encourage employees to identify development opportunities on their own as well. The company will need to vet and approve these suggestions to ensure they meet certain criteria, but it’s good for employees to be involved and on the lookout for learning opportunities. It means they’re taking the initiative!
4. Tie development to the organization’s goals and operations
Everything that employees gain from development should be directly linked to:
- The company’s goals
- Daily operational activities
In other words, employees should be able to implement the knowledge and skills they’ve obtained during development immediately in the workplace.
To get employees to stay, they must feel like what they’re learning is applicable to their daily working life and enables them to make a positive, broader impact on their organization.
5. Make development short, sweet and frequent
These days, companies and employees alike rarely have the time or desire to engage in lengthy development activities. Nor does development have to be a formal event that happens only a few times per year – especially if you want to keep employees engaged throughout the year and able to adapt in fast-moving environments.
Most people prefer short and more frequent bursts of micro-learning focused on a single topic and that they can complete on their own time, as their schedule allows.
If development is short, sweet and easy to digest and recall, it’s more likely to be a regular activity that fits into the busy work week and a habit that will employees will stick with. As a result, development will:
- Happen more often
- Be more effective
- Help learning become ingrained within the workplace culture
- Generate the return on investment that companies want to see
6. Embrace variety
Gone are the days when development only means attending a conference in another city for several days. Although that’s still an option, development in practice can be as convenient, informal and simple as an employee:
- Reading an article in an industry publication
- Listening to a podcast
- Completing a short e-learning module
- Attending a lunch and learn session
- Engaging in a coaching session with a manager
Offer a variety of ways for employees to learn so that there’s something that appeals to everyone’s learning style.
7. Showcase all the opportunities within your organization
It’s important that development serve as a means of education for employees about all the potential opportunities within your company – driving home the idea that employees don’t need to go elsewhere to achieve professional growth.
Examples of development that can accomplish this objective:
- Mentorships with someone in a position the employee aspires to obtain
- Peer collaboration and information sharing
- Rotation through other jobs, departments or teams for cross-training
8. Offer incentives for demonstrating mastery of new knowledge and skills
Want to give employees a bigger stake in successfully completing development and motivate them to continue with your organization? Reward them for mastering a new skill or piece of knowledge. The incentive could be anything from a bonus to extra paid time off or a special gift.
Of course, the biggest incentive is the prospect of earning a promotion from within.
9. Monitor effectiveness
Pay attention to the effectiveness and appeal of your development program so you know what’s working – and what isn’t – and how to course correct proactively before you lose employees.
How do you know whether your development program is effective and held in high esteem?
- Study turnover rates
- Distribute annual culture surveys to employees that include questions about development opportunities
- Ask specifically about development opportunities during exit interviews
- Have managers talk directly to employees in one-on-one meetings
Summing it all up
More and more evidence indicates that employee development is one of the biggest influencers on retention. It makes employees feel more confident and capable in their job performance, helps them feel valued and enables them to further their personal and professional growth. This leads to many benefits for employers as well. To create a development program that improves retention, follow the steps we’ve outlined here, including making learning a centerpiece of your workplace culture, obtaining the buy-in of leaders and employees alike, linking development to goals and daily operations, making development quick and easy, offering diverse learning options to suit different styles, and incentivizing mastery of new skills and knowledge.
For more information on how to enhance the employee experience, with the goal to improve retention, download our free magazine: The Insperity guide to employee engagement.