Developing your employees is vital to the long-term success of your business.
SHRM predicts that every time a business replaces a salaried employee, it will cost between 6 and 9 months’ salary. For a salaried employee making $50,000 per year, it would cost $25,000 to $37,500 just to recruit and train your new employee.
In a different CAP study, they found the average costs to replace an employee are:
- 16% of annual salary for jobs earning under $30,000 a year. For example, the cost to replace an $11/hour retail employee would be $4800.
- 20% of annual salary for positions earning $30,000 to $50,000 a year. That would cost an employer $10,000 to replace a manager making $50,000/year.
- And Up to 213% of annual salary for executive positions.
Employers are beginning to see the many benefits of developing their employees instead of looking for outside talent.
Benefits Of Developing Employees
When an employer puts genuine effort into developing employees, there are immediate and long-term benefits. Benefits to both the employee and the employer.
It increases loyalty and retention.
An employee that is being developed is an employee that sees a future with your company. An employee that sees no opportunity for growth won’t stick around. This growth doesn’t have to be upward mobility either. It’s just them being engaged and growing in their skills and talents.
When you have an engaged and growing workforce, they enjoy their work and remain with businesses longer. This helps you to truly establish your culture and gives you the opportunity to observe the talent and possibly promote from within.
It improves culture and productivity.
Employee development programs are about people. Your culture is your people. When your people enjoy the people they work with they become more productive. A more productive workforce is a better company.
“Customers will never love a company until the employees love it first.” Simon Sinek
Culture is a combination of an organizations systems, values, compensation, attitudes, and behaviors. When an organization develops its employees, you are improving culture.
Employees that are being developed build better systems, add value to customers and the bottom-line, have better attitudes, and function more efficiently. All of which leads to better productivity, higher engagement, and a culture that the employees own. Ultimately, resulting in business growth.
It makes growing your business easier
When your business is maturing but your workforce is not, get ready for disaster to happen. Hiring and developing people from the outside is much more challenging and expensive than promoting from within.
Research shows keeping the spark alive for your employees can double your revenue. Employees that are valued by an organization will add value to an organization. When employees are devalued, the organization will be devalued.
The best way to add value to employees is to help them see how valuable they are. Help them understand and develop their unique talents, skills, and passions. Fortunately, it’s not as difficult as it seems.
Know Thyself To Develop Thyself
Ultimately, development rests on the employee, not the employer. An employer can only offer the tools, training, and schedule flexibility for the employee’s development. The employee must take ownership of their own growth.
Lao Tzu said, “Knowing others is intelligence. Knowing yourself is true wisdom. Mastering others is strength. Mastering yourself is true power.”
When employees know themselves marginally better, they will begin growing. When employees truly know their “wiring”, you have a truly effective and powerful workforce. And when The employees understand themselves more, their understanding of others increases too.
This new found understanding of themselves and others is what will create the next level product, service, or innovation that your business needs. Without healthy workplace relationships and engaged employees, efficiency and productivity will be the first things to go. But what does employee development look like in action?
A Simple Process For Employee Development
- Make it available and known. Make various tools and resources readily available.
- Make it repeatable. Development is not a half-day training course. It’s multiple courses, multiple interactions, and doing the same things over and over again. Think of it like memorizing a business mission statement.
- Make it fun. If it’s not fun, they aren’t learning crap.
- Lead the way. Leadership must be on board and be transparent about their own need for self-development.
How are you developing your employees? How has an employer helped to develop you?