August 18, 2019
August 2, 2019
Talent Development: I’m sure you’ve heard a variation on this conversation regarding talent development and the investment in employee training:
HR: Investing in talent development and training is critical to our ongoing success.
CEO: But what if we invest money in our employees and they leave?
HR: What if we don’t and they stay?
While you may chuckle at this fictitious exchange, training and development is a hot topic and worth serious inquiry. As we will discuss, a strategic investment in employee development and training pays off in four critical ways.
This post (Part 1) covers the first two of these four components.
Having a robust training and development culture is a powerful tool in recruiting talent. With the unemployment rate hovering around all time lows across the nation, the market is fiercely competitive.1 The ability to authentically discuss training opportunities with candidates is an advantage in the realities of a tight labor market. Employers that are not making this investment may discover they are precariously behind their competitors.
In fact, according to the Association for Talent Development (ATD), employer investment in training and development continues on an upward trajectory for the sixth year in a row. 2
On average, employers are investing almost $1,300 (per employee) on this development with an average of 34 learning hours per employee. 3 Options range from instructor led face-to-face classroom training to self-paced on-demand online modules (e-learning).
An effective and strategically implemented training and development program not only attracts talent, it has the potential to increase retention and engagement across
the organization.
On the retention side, 94% of employees would stay at a company longer if it invested in their career development.4 Aligning development opportunities with goals helps employees prioritize training time and juggle busy schedules. Increasing management involvement also supports a successful development program. Training for “soft skills” and to identify and eliminate future skills gaps were priorities in 2018.
Understanding the cost of turnover provides further incentive. The replacement cost of an employee can be 150% of the worker’s annual salary (or more). 5 As aptly stated by Forbes contributor, “Good employees leave when they feel stuck and unsatisfied in their role, and replacing that talent costs more than retaining the employees you had.” 6
Savvy employers know that employee retention is only one side of the coin. The other side is building engagement. Investing in training and development fosters engagement through an increased sense of loyalty, belonging and trust. Organizations with an engaged workforce benefit from a 59% lower turnover rate. 7
When you factor in estimates that turnover as a result of poor employee engagement costs the U.S. economy a staggering $30.5 billion a year, the power of engagement really adds up.8 In addition, engaged employees have the potential to increase creativity, innovation, productivity and, ultimately, profits.
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About the Author
HR thought leader, Stacy Johnston, provides innovative HR solutions with a mission to support organizations in understanding and engaging their biggest competitive advantage… their employees. Johnston writes and speaks about contemporary HR topics. She is a licensed attorney and holds the SHRM-CP and PHR credentials.
About Audacity LLC: HR Consulting
Audacity LLC’s passion is HR. They help organizations build peace of mind, dial in productivity and enhance employee engagement by creating agile HR solutions that align with mission and core values. Comprehensive solutions include tips and tools to effectively recruit, hire, onboard and retain an engaged and skilled workforce. They help organizations build strong, cohesive and inclusive teams and develop mindful leaders at all levels. Bold and innovative Human Resource solutions save valuable time and money.
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[1] Seasonally adjusted unemployment rates by state, according to the Bureau of Labor Statistics, reporting at 3% in both Minnesota and Wisconsin. [2] 2018 State of the Industry Report, Association for Talent Development (December 2018). [3] Interestingly, the average varied depending on industry, with management consulting firms averaging $2,136/38 hours; finance/insurance/real estate averaging $1,147/36 hours; and manufacturing averaging $614/30 hours per employee. The level of regulation and risk management were factors in the variation. [4] “2018 Workplace Learning Report: The Rise and Responsibility of Talent Development in the New Labor Market”; LinkedIn Learning. [5] “Many millennials are job hoppers – but not all” by Rigoni and Nelson (8.9.16, gallup.com). [6] “8 Ways to Successfully Develop Employees Year-Round” by William Craig (8.21.18, forbes.com). [7] “State of the Global Workforce”, Gallup (2017). [8] Id.
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