Workhuman Editorial Team |   May 9, 2021 |    17 min

Did you know that 85 percent of the jobs that’ll exist in 2030 haven’t been invented yet?

Just like most jobs nowadays weren’t a thing 10 years ago, the future also demands a set of new skills that seem to be lacking in employees according to nearly every 9 in 10 managers and executives.

This is where employee development becomes critical for the growth of companies. This is why companies must invest in employee development in order to stay competitive in today’s work environments.

In this guide, you’ll learn about the ins and outs of this concept, from its definition and importance to its types and strategies.

What is employee development?

Employee development means “the expansion of an individual’s capacity to function effectively in his or her present or future job and work organization” (McCauley & Hezlett, 2001, p. 314).

The goal is not just to improve employee competencies, but it’s also to reduce job insecurity, as your employees will be more confident when it comes to successfully managing changes in the event of job loss or if their current position loses value within the company.

This is where human resources comes into play. The human resources department of a company is responsible for planning, implementing, and managing the developmental process through various employee training and development programs and strategies.

The ultimate goal of developing employees for a company is to boost the existing competencies of every employee and create new skills to support your organization’s goals.

We define competencies as, “a broad set of observable, measurable attributes that are predictive of effective performance in a job or role.”

What is the purpose of employee development for the employee?

Employees across all fields and industries need to be constantly updating their skills and abilities to keep up with the always-changing professional world and its increasing demands.

Stagnation is the one thing employees can’t afford in today’s corporate scene. According to a survey by McKinsey Global on future workforce needs, 87 percent of organizations are either currently experiencing skill gaps among their employees or expect them to occur within a few years.

As such, employees need to reevaluate their skill sets and work on improving them. They also need to take the steps to create new competencies that are essential for keeping up with the demands of the modern workplace.

Fortunately, a lot of employees recognize the need for development activities when it comes to maintaining their place among the fierce competition in the job market.

According to the Linkedin 2022 workplace learning report, the results for 2022 compared to 2021 show a notable increase in the number of responses for every single L&D (learning and development) program the platform has tracked.

Participating in an employee development plan offers employees access to learning opportunities they wouldn’t have otherwise had, higher income potential, and a proven way for them to advance towards their career goals.

Staff development also provides workers with an opportunity for a more promising career in case their company doesn’t have room for higher positions (because someone else got it or the scale of the establishment, for example). With the new and improved skills that they gain, employees can pursue prospects in other companies.

Plus, for those just interested in learning and growing as an individual, employee development offers them a chance to learn new knowledge. This can help keep them engaged at work, solidify relationships with colleagues with similar interests, and build a network of contacts.

What are the benefits of employee development for the company?

A well-thought-out employee development plan can do wonders for your business. It’s all about creating a win-win situation where employees are happy due to increased knowledge and competencies, and organizations are happy because development efforts are helping them achieve their business goals.

The following points will walk you through some of the benefits your business can expect to reap via people development.

1. Supports employee retention

Employers and HR professionals often face the challenge of retaining their top talent.

Resigning when a better opportunity comes along is a common occurrence, but one way you can improve your retention rate is through a robust employee development program – presenting the “better opportunity” at your workplace.

According to Clear Company, 94 percent of employees reported that they would stay longer at companies if their companies invest in the professional growth of employees. What’s more, organizations that offer employee development programs have 34 percent higher retention rates.

Another study by Ceridian found that 91% of high performers reported that working for an employer that offered learning and development opportunities was important to them.

These numbers are only logical. Employees who feel that their companies care about their career growth are more likely to feel loyal and want to stay at their jobs.

That’s why employee satisfaction is a key factor if you want to attract and retain top talent. According to an Udemy survey, 51 percent of employees would quit their jobs if they didn’t receive sufficient training.

Also, 67 percent of millennials said they would quit a job if there aren’t enough opportunities for employee growth and leadership skills’ development.

Since employee development activities are such a huge part of job satisfaction, it makes sense how it can have a massive impact on retention rates in your company. A vast majority of employees – 88% of millennials and 89% of Generation Xers – cite development as influential to job satisfaction.

So, if you want your employees to remain loyal, you need to invest in a talent development plan.

2. Builds professional relationships

Employee development plans offer new areas to discuss and explore both individually and as a team. It’s even an opportunity to make use of peer collaboration as a learning method.

This isn’t just a reliable way to boost staff’s abilities and knowledge, but it also helps your employees bond over the learning experience, resulting in creating and strengthening workplace relationships.

3. Boosts the performance of employees

Any workplace wants employees whose performance only gets better with time.

Most employees actually want to do their jobs well.

So how do we achieve both? By training and developing your employees.

Employees demonstrating poor performance often lack full knowledge of what they’re supposed to be doing. With advancements in the related industries and no training to keep their skills up to date, employees will become more and more unaware of the tasks and roles they’re meant to master.

Investing time and resources in employee development can help eliminate poor performance. In fact, one study from HBR found that 72% of employees surveyed said they think their performance would improve if their managers gave them corrective feedback.

Underperforming employees will get better, good employees will be great, and excellent employees will be valuable assets. The chain of positive effects on performance will only grow more intense if you let your team learn the skills they need to improve their output.

To ensure you get the most efficient results possible, your company must first identify the areas causing employees to perform poorly. Once you put your finger on the weaknesses, you’ll be able to tailor development programs that tackle these particular issues.

The feeling of empowerment that employees experience when they improve their skills will also contribute to better performance. Not to mention the sense of trust conveyed by investing in staff development will lead to enhanced morale and overall confidence in their work.

4. Develop leaders for the future

What will the management structure look like in your company 10 or 15 years from now? Who will be sitting in strategic positions and making crucial decisions?

The answers to these questions can either be dreadful or reassuring depending on the developmental structure within your company. If you’re concerned about the future growth of your business, you need to focus more on creating competent leaders for when the time for succession or expansion comes.

As such, the professional development of employees is necessary for evolution. Acquiring talent for leadership roles can happen by bringing in new hires, but it can be a lot less stressful and costly to train current employees and promote from within.

5. Enhances engagement in the workplace

Employee engagement plays a key role in productivity and retention.

A work culture that lacks employee development opportunities and a clear development strategy is a fast track towards losing your top talent.

Offering career development plans not only boost employee engagement, but also help your company succeed in the long run. In addition to working on employee weaknesses, concentrating on boosting skills they’re already good at can produce even better results.

According to Gallup, strength-based learning and development can enhance performance by 18 percent, increase employee engagement by 23 percent, and cut down attrition by 73 percent.

Conducting such programs also gives your company a chance to evaluate employees constantly and monitor their progress as well as the success of the development methods. Additionally, the company’s attitude towards reviewing and utilizing existing talent will take a more proactive turn.

Pro Tip: Allow employees to learn at their own pace

It’s important to note though that ongoing training and development should be done at their own pace. In fact, a LinkedIn survey found that 58% of workers said they prefer to learn at their own pace.

You also want to empower employees to set their own development goals and offer paths and bite-sized microlearning content to support those goals, accessible from anywhere. Enabling your employees to set and track their own goals will make a difference, not only to learning but also on engagement levels.

Plus, if you discuss their development needs and goals with them on a regular basis, that will lead to even more engagement. Gallup found that managers who’ve had conversations with their employees within the last 6 months about their goals are 2.8x more likely to be engaged.

The key for you as an organization though, is aligning your company goals with the goals of each individual employee. By syncing up employee and company goals, employees are 3.5x more likely to be engaged.

What are the types of employee development?

Employee development can cover various areas that are categorized under two main types: professional development and career development.

1. Professional development

The purpose of professional development is to help employees develop into experts in their fields. Companies often do this by offering employees the chance to obtain official certifications, consequently making them more proficient.

For many employees, professional development can help further their careers, especially for less experienced employees. This is certainly true in the case of organizations that consider professional skills as criteria for promotions, not just seniority or performance.

2. Career development

Career development focuses on topics such as stress management, communication, organizational skills, leadership skills, and conflict management.

The goal here is to encourage employees to become more competent in handling more strategic positions. It involves training employees to take on managerial or executive responsibilities, preparing them for becoming leaders within the company in the future.

What are the main approaches to employee development?

Employee development doesn’t have one right answer. Experts use various approaches to implement and support growth plans depending on the goals and orientation of the business.

The following are the four most common approaches to employee development. Understanding what each approach involves is how you can apply what would best align with your company’s structure and direction.

1. Assessment

Without assessment, employers would have no reliable way of knowing and evaluating the strengths and weaknesses of their employees.

This is done by collecting data regarding workplace behavior, professional skills, communication, performance, and so on, then sharing feedback with employees.

A great way to tackle this is through continuous performance management, where you’re not just assessing employees in an annual or semi-annual basis, but rather, are doing so on an ongoing basis. This approach helps foster a growth mindset, emphasizing feedback that is in-the-moment, frequent, and informal.

2. Formal education

Offering your employees opportunities to continue their education while working for your company can be highly beneficial as a development approach.

In addition to attracting talent amid the fierce competition of today’s market, contributing to the furthering of your employees’ education will make them more motivated to shine in your organization to keep enjoying the otherwise very expensive resources.

3. Interpersonal Interactions

A very effective form of learning comes when employees interact with more experienced members of the organization. As such, one approach to staff development is through interpersonal relationships or leadership training.

When employees interact with coworkers and superiors within the same company, a shared bond based on respect and professionalism is created. This facilitates the passing of skills and information among people via coaching or mentoring.

4. Role Play / Hands-on job experience

Nothing can teach employees how to perform better at a job quite like hands-on experience. In many cases, team members with more practical experience tend to resolve issues and complete tasks faster than those with more formal education.

One way to get hands-on experience without actually performing the job in a live environment is through simulation, games, or role play.

According to a study done by the Journal of Organizational Change Management, the best way to train employees is through, “behavioral role modeling, business games, and/or role playing.” Another study also cites role play, games/simulation, and one-on-one instruction as highly effective training methods.

What are the stages of employee development?

The development of employees goes through six main stages arranged as follows:

1. Attraction

If a company can’t attract the required talent, there’s no way it can succeed. This is where building a good employer reputation and raising brand awareness comes in handy.

2. Recruitment

Next, the company seeks out talent to recruit them to join its team.

3. Onboarding

After hiring new employees, there should be a period of adjustment so they can get used to the workplace environment and the outline of their new role.

4. Development

After the onboarding phase, the company should guide the new hires using a suitable training program to ensure they possess the necessary skills and knowledge to fulfill their roles.

5. Retention

You should focus on retention strategies such as employee recognition, open communication, team initiatives, and seeking and providing feedback regularly once the development stage is completed. As we noted earlier, the more you invest into your employees, the more likely they are to stay.

6. Separation

The life cycle of an employee ends with separation. It can be a resignation for personal reasons, a new employment opportunity, or retirement.

The goal here is to ensure a smooth separation process with minimal impact on the employee morale and productivity of other team members.

FAQs

How do you create an employee development program?

Formulating an effective employee development program starts with an analysis of the missing skills and the skills gap. What training needs are your employees lacking? Once defined, you need to identify which employees show potential for career and personal growth.

When you’re sure that the employees’ learning goals and the company’s goals are on the same page, use employee development as a tool that can benefit the organization. As your program begins to take shape, keep track of progress and make adjustments to the training course as needed.

What are the most effective employee development methods?

Mentoring, coaching, computer-based training, job rotation, simulations, conferences, workshops, role play, games/simulation, and hands-on training are among the most effective methods of employee development.

Wrapping up

The demand for L&D specialists nowadays is greater than ever, increasing by a whopping 94 percent between July and September 2021 compared with April to June 2021. This only goes to show how important employee development is for the success and growth of your company.

To monitor your objectives and follow up on goals, try our Conversations performance development tool to generate and receive structured feedback and assessments, efficiently creating a culture of connection and continuous growth.