Does Your Company Have an Employee Development Plan? Here's Why You Need One

Today, the skills needed to thrive in any role within a company are constantly evolving. In order to compete in their industry, employers need competent, skilled workers who can adapt to the current needs of the business. For many companies across the nation, prioritizing employee development is the best way to stay competitive.

Investing in professional development opportunities has many benefits because it increases employee engagement, attracts top talent to your company and helps employees keep their finger on the pulse of current industry trends. For companies that want to know more about employee development, consider these benefits and opportunities.

[Read: A Guide to Continuing Professional Development]

What is employee development?

Skilled employees are the backbone of any business and finding great talent is a difficult task for even the largest companies. Employee development, at its core, solves this issue by elevating existing employees rather than hiring for outside skills. It is a commitment of an employee and an employer to help an individual worker develop new skills, gain new abilities and increase their knowledge.

It’s important to note that employee development is more than training an employee for a specific skill for a specific role. Instead, it is a holistic approach to encourage employees to engage in continued learning opportunities that advances their individual career path.

Investing in employee development is good for individual employees, but it is also good for companies as well. It’s in the employer’s best interest to allow employees to develop, refine and learn new skills and bring them to the workplace. Here are more benefits employers can enjoy by providing both internal and external learning opportunities.

[Read: 4 Smart Strategies for Onboarding Remote Employees]

4 benefits of employee development

When implemented strategically throughout all levels of a company, an employee development plan can be beneficial to individual employees, the company culture and the entire organization. Here are some of the business benefits of an effective employee development program.

Improved performance

Employers who do not invest in employee development are missing out on a huge opportunity to grow their business. In fact, companies that spend around $1,500 per employee annually on comprehensive training have a 24% higher profit margin than companies that don’t spend as much.

Furthermore, according to a 2017 CSO Insights report that evaluated the impact of professional development amongst sales managers, companies that invested in professional development for sales managers saw clear, measurable and positive impacts on key performance indicators, such as quota attainment, revenue plan attainment and win rates. Notably, study participants who invested more than $5,000 annually in sales management development improved their win rate by 11.5%.

Greater flexibility

Employees with a diverse skill set and a learning mindset are much more likely to adapt to new technologies and think outside the box to solve business problems as they arise. Today, companies that invest in employee development plans are setting themselves up for success when the business faces unexpected challenges.

Better employee retention

According to go2HR, 40% of employees leave their positions within their first year of employment due to poor job training. Employee turnover costs are expensive and can inhibit a company’s ability to grow. In fact, turnover costs are estimated to reach as high as 33% of an employee's annual salary.

An employee development plan is one long-term solution to decrease employee turnover rates. In fact, a key predictor of employee retention is a company’s employee development program as more and more people expect career development opportunities within their organization.

Better leadership

As small businesses expand, business owners will quickly learn that doing everything themselves isn’t scalable. In order for a company to grow and succeed, they will need to expand leadership roles to key players within their company. However, inherent leadership abilities are rare, and most people need years of hands-on experience to become effective leaders.

Employee development plans that help individuals develop their leadership skills can help your organization quickly adapt to new growth opportunities. Furthermore, employees who rise into leadership positions within their organization already know the business and are ready to grow the business from day one.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

Want to read more? Be sure to follow us on LinkedIn!

CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.