Investment in employees, like any type of investment (time, money, and energy) into an employee’s development can be anxiety inducing: Will my Investment in employees pay off and reduce staff turnover? Am I making the right decision, for me and for them?
You might even feel so overwhelmed with the daily challenges in your business that you don’t have time to worry about the future. But studies and experience show that putting effort into your employees’ development will have demonstrable benefits for your business.
High staff turnover rates are costly. Investment in employees development is key to addressing this
Like any good business owner, you’re aware of your profits and expenses. You’re smart about where you spend your money, and you keep a keen eye on your profit line to ensure everything is going to plan. This might be one of the reasons you’re hesitant about making an investment in your employees’ development – a fear of wasting your money on talent you can’t retain. But the costs of onboarding new members onto your team, losing them and having to re-start the hiring process is often overlooked.
A study done by the Academy of Management into talent retention found that the total costs associated with replacing an employee can range from 90% to 200% of that employee’s annual salary. Moreover, constant disruption within a team can create feelings of distrust, unease, and low morale. This impact is only heightened within smaller teams, and it can limit your future success.
By not investing in your employees’ development, you’re creating a false economy within your business; you’re saving money in the present but setting yourself up for substantial losses in the future.
Putting time and money into your current team’s development is a tried and true method to retain talent and limit expensive hiring and onboarding processes.
If you invest in your employees futures, they’ll envision you as part of them
There are a lot of methods and theories when it comes to talent retention. In our experience of building and managing teams, we’ve learned the importance of investing in individuals to improve the collective.
A WorldatWork Survey of HR professionals found that promotions and career development opportunities was one of the top five methods for talent retention – more effective than above-market pay or spot bonuses.
Similarly, a lack of promotional opportunities and organizational commitment were found to be some of the strongest predictors of future turnovers by the SHRM foundation.
We’ve experienced top 10 firms who made the same decision you’re considering now – in challenging economic times they cut back on training and development for their employees and as the stats suggest, there was a jump in turnover rates and the firms struggled to hold onto skilled, promising graduates.
As soon as we implemented training and development programs back into the business, retention rates rocketed.
Put simply, employees want to feel like their investment of their talent and time into a business is being reciprocated. If you demonstrate that you’re working towards your employee having a successful future, they’ll want that future to be with you and your team.
Investment in employees: A trained employee is a more effective employee
As you can see, investing into your employee’s development will keep them committed to your team and prevent any costly turnover rates. In addition to this, employees who go through training and development programs provide a higher value to your business over time.
Especially for a smaller firm, putting recent graduates through ACA, ACCA, ACTA, and other qualification programs can be expensive. However, this investment will allow your team members to be more effective within your business. Nothing about your business is mediocre. Your team shouldn’t be either.
By investing in your employees’ training and qualifications, you’ll build a more highly-skilled, more profitable business. Your team will not only be committed but they’ll be more effective in the work they do every single day.
Don’t just get employees in the door. Give them a reason to stay.
Your employees are the heart and soul of your business. They’re worth the investment. You don’t just want to build a team – you want to build a dedicated, talented team that finds their work as meaningful as you. Achieving this requires more than hiring promising employees; it takes building a culture where your employees understand how much you value them.
It takes planned and proven investment in employees’ futures so they not only feel motivated to stay but are bringing more and more value to your business.
At Armadillo Academy, we have four key programs designed to take newly qualified employees in the earliest stages of their career and set them on the path towards managerial or partner roles. Addressing the issue of high staff turnover and helping with your investment in employees. From building commercial acumen, to team management, and all the way to business development, our training programs are the perfect tool for when you’re building your dream team. Learn more here.