As companies have grappled with employee retention and a general worker shortage over the last two years, the circumstances around the pandemic have revealed several weaknesses around the talent wars. Some employees who were furloughed or let go when businesses shut down have simply retired or started their own businesses.
Other employees endured the struggles around working remotely only to burn out and decide to find a better work-life balance elsewhere. And as the talent shortage continues to grow, leaders are left trying to figure out where to hire talented people and how to keep the ones they have.
While there is much necessary conversation around such factors as expanded hybrid and flexible work options, wellness and work-life balance, and DE&I initiatives, among other things, one area that can be overlooked is the role that career development plays in employee engagement and retention. It’s not just training for their current jobs that employees care about; rather, they want to know that their companies and leaders are willing to invest in their careers for the long term, whether they stay or not.
Investing in employee career paths can be expensive, and for companies watching the bottom line, it may be tough to justify the cost of providing coaching and training. Some companies may fear that they will train and mentor talented people who will then take their skills elsewhere.
Both lines of thinking, however, are rooted in short-term thinking. The truth is that replacing an employee can cost anywhere from 1.5 to 2 times the employee’s annual salary–possibly even more for high-level employees, and employees are more likely to leave a company that does not provide learning and career development opportunities. In fact, a survey from late 2021 showed that 72% of tech workers were thinking of leaving their jobs because of limited career development and learning opportunities.
Given these realities, it’s clear that career development is a strategic retention choice. In fact, investing in the future careers of your employees may be the key to thriving during the ongoing talent shortage.
Here are four ways that investing in the career development of your staff can help you thrive during the ongoing talent wars:
1. Improve employee engagement and employee experience
Leaders intuitively understand that happy employees are more engaged and more likely to stay with the company, but they may struggle to know exactly how to give employees the experience they crave. While things like wellness programs or flexible work schedules are essential, it’s important not to neglect the value of career development across the employee population. One study found that employees who are given professional development opportunities are 15% more engaged in their jobs and had a 34% higher retention rate.
2. Upskill employees to meet future demands
No one knows exactly what the future holds, but when organizations such as the World Economic Forum predict that 50% of all employees will need reskilling by 2025, it’s a safe bet that educating and training current employees will pay off in more skilled people who can meet future demands. And this doesn’t just mean retraining employees to use different technologies; it may also mean upskilling employees who could benefit from academic instruction or management training.
3. Help employees find a niche where they can thrive
Companies that invest in the long-term careers of their current employees are giving those people the opportunities to explore interests, find new talents, and practice new skills. This endorsement of exploration and curiosity can unleash employee potential and help them find a niche where they can flourish It also communicates that leaders recognize their potential and want to develop it. Employees tend to rise to the occasion when given the opportunity to chart a career path with full support from their leaders.
4. Improve performance—and reputation
Giving employees career development opportunities internally can only strengthen the performance of the company. An organization with a strong reputation for helping people grow their careers can attract other talented people, giving the organization an advantage in attracting and retaining talent.
As the war for talent continues to heat up, companies will need every edge to stay competitive in an employee-driven market. Aside from the current “Great Resignation,” the ongoing and anticipated shortage of skilled workers will mean continued competition for high-quality employees. Helping everyone in your organization plan a career path and pursue development opportunities toward those goals could be the key to thriving and growing throughout whatever the future of work brings.