The business impact of a rightly executed L&D strategy is often underestimated. Just like a right recruitment strategy or even your product R&D, it can have profound impact on your organization’s future and its business potential.
Keep up with the continuous learning era and Millennials expectations
Currently, 56.1% of the world’s population is part of the ‘digital population’. To be competitive, companies need to constantly upskill to integrate new technologies, adapt to customer changes or new systems. As a result, companies embracing continuous learning are more likely to adapt and keep their competitive edge.
At the same time by 2025, millennials will represent 75% of the global workforce. Companies including Ernst & Young and Accenture have already reported that Millennials make up over two thirds of their entire employee base.
Is your company ready to manage their expectations? According to Linkedin 2018 annual survey, 87% of millennials prioritise Learning & Development opportunities in their jobs. Studies show that punctual Learning & Development are not sufficient to retain millennials, who expect a to be provided with a continuous stream of L&D content. Not surprising to see big groups investing in digital devices and Learning & Development platform to make the learning experience available, actionable and interactive. With the continuous rise of technologies, such as artificial intelligence, lines are blurred between physical and digital systems. Millennials have embraced that change, and are expecting their workplace to do just the same.
Attract and Retain Talents
Wherever the employment market is competitive, like in Southeast Asia, companies engage in a talent war. According to a 2019 Linkedin study, an astonishing 94% of employees would stay at a company longer if it invested in their career development. In some cases and where the legal framework permits it, significant development programs can be tied to the signature of a bonding contract that commits the employee to the company for a fixed duration.
Annual surveys about “Why people leave their jobs” reported by Gallup or Korn Ferry consistently rank lack of training development opportunities among main reasons why employees change their jobs: Employees fearing that their skills are becoming obsolete will consider leaving their company to pursue other professional development.
Employees also don’t want to be stuck in the same position for years. Assuming they have mastered a particular role, the lack of new challenges is demotivating,
Those issues place Learning & Development central in the employee retention. Training is not only an excellent tool for helping the company improve its business, but it is also a critical tool to manage employee turnover and retention. Companies should also consider to prioritise their L&D efforts in favour of High performers, who can be up to 4 times more performant from normal employees. Training programs and Individual Development Plans must be linked with real development opportunities together with a career roadmap. As a result, few employees would risk the uncertainty and stress of looking for work elsewhere.
Training employees is cheaper than to hire new ones
Cost of hire is higher than you think. Not only it requires full time HR to recruit the right candidate with needed skills, but it also presents hidden costs you may not be aware of.
While it may seem simple just to replace one worker with another, consider those hidden costs:
- Cost of non productivity while the position is vacant
- Cost of non productivity during on-boarding and training period: According to studies, it takes minimum 8 to 26 weeks for an employee to achieve full productivity. Before this time runs out, you are essentially losing money – the new employee costs more than they are earning for the company
- Time loss for your management: management time should be focused on making business decisions rather than filling the gaps spending time in operations. Management salaries are high, companies with high turnover do not make the best use of their managers skills while they spend most of their time recruiting.
- Impact on high performers: onboarding requires training for the new incumbent to adopt the right standards and process that your company require. High performers may be selected to train those incumbents to the right standards.
- Overloading the teams: Gap unfilled by the departure of the employee impact the rest of the team. Think about how long can a team thrive without a crucial team member crunching the operations.
- Engagement cost: Employees living, whatever the reasons, have an impact on the morale of the teams. Some companies struggle to
Of course the above excludes costs related to the classic hiring process, which may involves headhunter fees or platform fees.
Gallup estimated that employee replacement costs can be 150% of the workers annual salary, or more.
Increase workforce engagement
The average worker isn’t satisfied with just base salary anymore. Boredom at the workplace may also create feelings of dissatisfaction and negative working habits. Not only for the employee itself, but for the colleagues all around. This is when “culture” comes into action.
Regular development initiatives can prevent workplace idleness and Having frequent training programmes will support internal opportunities and self initiatives to generate a positive virtuous cycle. The role of managers is key during the process, to assess the current skill levels and gaps to be developed and to provide regular feedback. The availability of new Learning & Development platforms provide on demand training programs with interactive contents.
To increase employee engagement, companies are also thinking about what are the most effective ways to learn. The rise of digital and online learning in talent development is highlighting the change from traditional face to face learning to on demand learning. The 2018 Linkedin Learning survey highlights that 58% of employees prefer opportunities that allow learning at their own pace.
The same report revealed that 49% prefer to learn when the point of need occurs – making accessible, independent online learning the most suitable for an increasingly diverse, multi-generational workforce.
Increase in productivity
The increase in productivity is usually the first that comes to mind when considering a Learning & Development action. Achieving productivity boosts requires a good understanding of employee mission and a carefully crafted action. After the program is completed, productivity increases can be measured by a series of metrics available directly from the company data or collected on purpose by the employer.
A learning culture creates an environment for employees to continuously upskill, knowledge share and better themselves. Studies show that an effective learning culture promotes enhanced productivity and cross-department support. It can result in up to 12% higher profit and 7% more engaged customers. The equation in the end is Better People, Better Business.
A learning & Development culture goes along with a strong Performance Management system, alimented by one on ones, Individual development plans, and a culture of feedback.
Consult us for more information about ROI measurement on L&D actions.
Learn as if you were not reaching your goal and as though you were scared of missing it