If a business is to run lean to increase its profitability and competitiveness, it doesn’t make a lot of sense to spend money on its people. It might look that way at first, but, according to a white paper from Franklin University, doing what appears counterintuitive is exactly what is needed to not only survive but thrive in the future. Education, in particular, is what attracts new talent and keeps current talent in place, producing and innovating for the company.
Knowledge exchange is how businesses start to begin with. It’s how they expand and stay profitable. When an organization creates a work climate that promotes learning, it helps new ideas gain traction and thus turn a profit. New potential employees are attracted to working for an organization that will welcome its ideas, not turn them down because of the ingrained tradition of how things have always been done in the past.
Education and Retention and Attraction
When employees learn new skills through strong, company training, they are more likely to remain loyal to the company longer. Skill refinement, competency development, best-in-class opportunities, professional designation programs, personal growth, and technical expertise can all have a positive impact on attraction and retention. College and graduate courses and degree programs can influence retention. So if you’re looking to keep your best people and to attract strong new candidates, educating your employees is the way to go.
Leadership Development and a Skills Gap
In order to increase retention and attraction, however, companies have to align their business goals with their training. Leadership is what will carry a company forward, but there is often a lack of investment in leadership development.
The Deloitte Global Human Capital Trends 2015 report found that “9 out of 10 global HR and business leaders (86 percent) cited leadership as a top issue.” Just six percent of organizations, however, feel that their leadership pipelines are really ready to handle future problems. This indicates a very wide skill and capability gap.
The answer is not, as many organizations might think, to conduct short-term training programs or to invest in a one-time leadership event. Companies that think of developing talent as something they must do in good and bad economic times have better outcomes than those that don’t. The Deloitte survey says that “research shows that high-performing companies spend 1.5 to 2 times more on leadership than other companies, and reap results that are triple or quadruple the levels of their competitors.”
Businesses should treat leadership development as a strategic initiative, says the Deloitte report. It’s not going to be enough to buy “off-the shelf leadership development solutions” that are “fragmented and of inconsistent quality.” These types of solutions are too broad, and they do not provide the tailored education needed, along with a wider view.
One way to offer professional development that will work is to use data-driven tools to assess leadership qualities and to comprehend the career paths of successful leaders. This can also help organizations learn what types of development are the best options. If an organization looks at what jobs and backgrounds create the best leaders, they can “target training that best prepares leaders to learn from this experience, and use assessment tools to measure capability and readiness for the next level.”
Other Benefits of Professional Development
Besides helping to improve a company’s lot of leaders, education also has a good return on investment, says the Franklin University white paper. Employees increase a company’s value, so it’s smart to invest in them as assets and not to treat them as risks and liabilities. Research has indicated that education can have a direct impact on a company’s ROI, financial and on other forms of success measurement.
Finally, education can help a company develop its innovation and creativity. This leads to new ways of doing business, new methodologies, and new products. This helps move the company to the front of its industry and to lead it.
Investing in your organization’s professional development program for the long-haul is what will help the company attract new talent, keep current star employees, increase employee loyalty, improve its leadership pipeline, and increase its capacity for innovation. When a business puts its limited resources into its people, the bottom line typically improves, and the business’ reputation among employees and customers who hear about its efforts does as well.
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