No matter the size or scope of an organization, the main concerns in every company are recruiting, engaging, and retaining top talent. One of the most effective ways to succeed in all three of these areas is to implement a solid employee development program.
Hiring and retaining good employees is costly to a business. A few ways a creative development program can make this less of a burden for an organization include:
1) Employees perceive it as a benefit.
Statistics show that 76 percent of employees want opportunities for career growth, reports Steve Olenski in Forbes. “Hourly employees, especially, don’t always receive the benefits that salaried workers in larger companies are accustomed to,” notes Chad Halvorson writing for Inc. Integrating employee development into a hiring package provides a competitive advantage over other job offers a candidate might be considering.
2) It encourages loyalty.
Employees feel valued and supported when they know an employer is willing to provide training and development. This company-sponsored investment in their success makes employees far more likely to remain loyal, decreasing costly turnover and increasing retention. In fact, Access Perks reports:
- Businesses with a strong learning culture enjoy employee engagement and retention rates around 30-50 percent higher than those that don’t.
- 36 percent of workers and nearly half of millennials would consider quitting a job that didn’t provide learning opportunities.
- 42 percent of L&D (learning and development) professionals who indicated their employees were highly engaged in learning were also highly engaged overall at the organization.
3) An employee development program is great for customer retention.
Engaged employees keep customers happy, engaged, and loyal, explains Brandon Carter. Bored employees with negative attitudes, sloppy work habits, and little interest in customer service can ruin your reputation and your bottom line. This is important because:
- A repeat customer spends 67 percent more than a new one.
- Existing customers are 50 percent more likely to try new products and spend 31 percent more than new customers.
- The cost of bringing a new customer up to the same level of profitability as an old one is up to 16x more.
Let’s look at some of the most effective components of an attractive and effective employee development program.
Tuition reimbursement and continuing education
Encouraging employees to enroll in formal degree or certificate programs and helping with the costs delivers a great return on investment (ROI) for both employer and employee. Tuition reimbursement is tax-free to employees up to $5,250 and can be claimed as a deduction on the employer’s taxes, writes Haley Glover of Lumina Foundation.
She adds, “Every year, employers spend about $177 billion on formal education and training for their employees, with about $28 billion of that spending in support of tuition benefits. Almost 60 percent of employers offer tuition assistance or reimbursement to employees.”
The Lumina Foundation conducted a series of five studies involving leading U.S. employers to evaluate the ROI of tuition benefits programs. The studies examined the differences in promotion, transfer, retention, and absenteeism rates for employees who did and did not participate in these programs.
The studies found that tuition assistance consistently results in a strong financial investment. “All of the employers in the study series achieved a positive ROI from their programs, and two of the employers, Discover and Cigna, achieved extraordinary results—144 percent and 129 percent ROI, respectively.”
Additionally, the ROI studies found that “turnover decreased among employees who participated in tuition assistance programs. This attrition decrease was even more pronounced among workers on the front line, where job turnover is highest.”
In other good news, employees who participate in tuition assistance programs “climb the ranks at a higher rate. At Discover, workers who used tuition assistance were a staggering 21 percent more likely to be promoted.”
Amazon believes so strongly in educating its workforce that it’s implemented the Amazon Career Choice tuition assistance program. This helps fulfillment center employees pursue certificates and degrees in high-demand fields. The company even constructed dedicated classrooms at its large fulfillment centers to make it even easier for participants to attend class before or after work shifts or on days off.
Student loan reimbursement
One of the newest employee benefits to arrive on scene that plays a big role in attracting and recruiting degreed workers is student loan reimbursement. It is distinct from a tuition reimbursement program. “One big difference is student loan benefits can apply to degrees acquired prior to entering the workforce, as well as those earned during your career (depending on how the policy is designed),” explains Sharlyn Lauby, an HR pro turned consultant.
In explaining the value of this benefit, Lauby cites the steadily increasing cost of tuition over the last decade. “In the early 90’s, college graduates had very little debt, with the average being around $10,000. Today, the average debt at graduation has tripled to about $35,000,” she reports.
At the same time, it’s never been more difficult for organizations to find the talent needed. “The Association for Talent Development (ATD) recently reported that 75 percent of CEOs find the skills gap to be the biggest threat to their business. There has to be a way to create a win-win for organizations and employees,” Lauby explains. She adds, “One of the great things about student loan assistance is that companies can design the program in a way that targets their specific needs for recruitment, engagement, and retention.”
Chris Duchesne, vice president at EdAssist, offers his definition: “In its most basic form, student loan assistance means that the company agrees to start making payments against an employee’s student debt. A student loan benefit program may also include help and guidance for employees, including the ability to speak with an advisor about repayment strategies.”
Skill-based training through eLearning
Companies that don’t invest in training employees properly and aren’t supportive of employee learning and development often experience costly workplace skills gaps. Additionally, turnover can be high, with 40 percent of employees who receive poor job training leaving their positions within the first year.
eLearning Industry explains, “Profit margins are often so tight that there is no time for sufficient training on the job. Certain aspects of eLearning are increasingly proving to be convenient and effective for workforce training. An expected increase in demand for technologically skilled workers means that eLearning is the best way to bridge the gap.”
According to eLearning Industry, four key benefits of eLearning include:
“Most modern eLearning tools are flexible and customized to specific industries. Many are free or low-cost with possible ongoing investments. Employers can predict and adjust costs and easily scale up or down as training needs change.”
2) Efficiency and convenience.
These programs are an efficient way to deliver content that is helpful to nontraditional learners, such as full-time workers with families. Additionally, with eLearning, learners absorb 25 to 60 percent more of the material. In this informal and personal approach to learning, students can communicate easily with instructors and peers.
Training with eLearning can be asynchronous or synchronous. “With self-directed eLearning, students learn information up to 60 percent faster than in traditional training environments,” states Joe Peters, eLearning Industry. These platforms give students access to the training materials at any time of day from any location with any device connected to the internet, including smartphones, tablets, and desktops. This provides the ultimate in convenience and flexibility.
Past negative experiences with job training may leave employees with a poor attitude about traditional training models, despite their desire to advance and excel. “But eLearning has an interactive component such as gamification that keeps trainees engaged. Sharing progress and accomplishments also motivates employees,” says Peters.
In his piece for Forbes, Steve Olenski highlights the many benefits companies enjoy when investing in worker training via eLearning technology:
- Every dollar invested in online training results in a $30 increase in productivity.
- Companies that use e-learning technology achieve an 18 percent boost in employee engagement.
Progressive training models
In Roy Maurer’s interesting “Scaling Up Skills” article for the Society for Human Resource Management (SHRM), he illustrates a variety of employers who’ve adopted a multipronged approach to drive workforce development.
Maurer points to Atrium Health, a nonprofit health care network based in Charlotte, N.C. that uses a rotation program to help employees develop new skills. Rebecca Schmale, vice president of learning and organizational development at Atrium Health, explains: “Selected individuals can do a one-month rotation at a smaller, high-performing hospital. Participants work alongside the leadership team in that facility to observe and learn what they do differently from other locations. The rotation program gives them a full immersion into a different culture that achieves consistent success in the core areas of our business.”
While rotation programs are great development tools, some employees are concerned that time away from their jobs will damage their career. Also, some managers aren’t thrilled with the idea of releasing workers from their roles for such a long period of time.
Maurer reports that Atrium Health “addresses these issues by ‘backfilling’ positions with high-potential employees to provide them with a development and skill-building experience when an employee is doing a rotation.”
Rebecca Schmale adds, “Knowing their responsibilities are covered frees those in the rotation to focus completely on learning while they’re away. For the organization, it satisfies concerns about how that work will be done while also helping us prepare potential future leaders.”
Small businesses especially can benefit greatly from mentoring programs. They offer a far less expensive alternative to formal training and development programs. Mentoring also allows for a more personalized experience and results in deeper conversations and more customized feedback. These special relationships provide rich learning and development opportunities for both mentees and mentors.
“A successful employee mentoring program can create a variety of positive outcomes. But it should exist for one reason—to address an organizational need,” writes Rick Gibbs, Performance Specialist, for Insperity. Gibbs suggests such needs may be:
- Leadership and management development
- More effective onboarding/acclimation of new hires
- Knowledge transfer when employees retire
- Boosting retention
- Enhancing customer service
In her article on successful mentoring program implementation, Lauren Trees reports two key actions that organizations should take to provide structure for mentoring relationships:
- “Define learning objectives: Each partnership begins with mentors and mentees agreeing on a set of learning objectives that they will pursue together. Setting clear goals for activities and outcomes establishes the pair’s priorities from day one, guiding their agenda and providing a shared sense of purpose.”
- “Establish clear timelines: Rather than encouraging open-ended relationships, most organizations establish timelines for pairs to meet their stated objectives. The timelines include not only progress milestones, but defined end points, which tend to keep pairs focused and create a sense of ‘deadline’ urgency.”
No matter how you decide to structure your employee professional development program, think of it not as an expense but as an investment. Chad Halvorson offers perhaps the best reason of all for committing to this investment:
“It attracts the high-caliber people you want to hire. By offering training, continuing education, conference attendance, or even something as simple as a book allowance, with the understanding that you expect them to participate, you will attract employees who are looking to better themselves. That’s an employee you want to hire in the first place.”