The Business Case For Employee Professional Development
Providing professional development for employees can be advantageous for businesses and enable them to achieve long-term growth. Here are some of the reasons why it makes sense to invest in your employees:
Improved job performance
Investing in professional development for employees can be beneficial for businesses and contribute to their long-term business growth. Through professional development, employees in various roles can acquire skills that would help them improve their performance. For example, those who undergo sales professional development may be able to convert more qualified leads and add to revenue, while those who train on customer service may be able to improve customer retention. Managers who undergo leadership development and mentoring become better leaders. As a result, businesses can enjoy robust growth.
Better job satisfaction and engagement
Professional development gives your employees the opportunity to improve their skills, and enable them to advance in their career. When employees feel that the company is investing in them, they are more likely to become devoted to their job. Professional development can also enable your employees to be more engaged with their work when it is tied to the core values of the company. This will help them understand how their contribution fits into the larger picture, and motivate them to do well.
Lower turnover and enhanced recruitment
When your employees are content with their work, they are also more likely to stay longer in your company. As a result, your business can avoid the various costs associated with a high turnover. This includes lower productivity, lower morale of the remaining employees, as well as allocating a huge amount of time for recruitment and on-boarding new employees. In contrast, satisfied and engaged employees can make your company attractive for fresh talent. This will enable you to build a competent workforce and stand out from the competition.
Though professional development is certainly beneficial, companies should determine its ROI to balance the need on investing in people while achieving returns for their business.
A Step-By-Step Process On Evaluating Employee Professional Development ROI
The Kirkpatrick Four-Level Training Evaluation Model offers a systematic approach in assessing the impact of training and professional development on your employees and to your business. It seeks to evaluate employee training and professional development in a series of four steps or levels.
Level 1: Reaction – This level assesses the reaction or engagement of your employees to the training and professional development program: its presentation, materials and the instructor. You can get verbal feedback by asking them directly if they found the program relevant, worth their time and if it accommodated their personal learning style. Gauge employee reaction through post-training and professional development surveys, or by observing changes on the job.
Level 2: Learning – Evaluating what your employees have learned entails measuring the level of understanding of your employees on the information, skills and techniques that were discussed during training and professional development. To do this, you need to test the knowledge level, skills and attitudes of the participants before and after each session with interviews or verbal assessments.
Level 3: Behaviour – You then need to check how your employees were able to apply the information or skills that they have learned to their job. However, you need to take into account the organisational culture and management practices when assessing behavioural changes. The employees may have learned a lot during training and professional development, however may fail to apply it because of an unsupportive organisational culture or a boss that fails to recognise the behavioural changes; thus leading workers to revert to their old ways. Evaluating behaviour entails conducting interviews or observing employees for a couple months or a year after the training and professional development program ended.
Level 4: Results – Results pertain to the impact of the training and professional development on your business. Did the program increase productivity, sales or customer satisfaction? Was it able to reduce turnover? You need to assign a monetary value to the benefits your business experienced for measurement. This will then lead you to compute for the actual ROI.
The ROI Equation
Computing for the ROI of Employee Training and Professional Development involves subtracting the cost of training and professional development from the monetary benefits, dividing the result by the monetary benefits, and multiplying this by 100 to get the percentage value for the ROI. For instance, a skills development program at a facility producing small engines generated about AUD 500,000 in benefits through increased productivity and sales. The cost of the program was AUD 100,000. Therefore, ROI can be calculated as shown below:
ROI = [(500,000 – 100,000)/100,000] x 100
ROI = 400%
Using the example above, the ROI of the skills development program is 400%. This means that for every dollar invested in training and professional development, the company earns back four dollars. With this information, senior management can now decide whether the investment on employee training and professional development is worthwhile and how much is appropriate.
Employee development doesn’t have to be elaborate or costly, and the right investment can have substantial payoff in terms of productivity and long-term loyalty. People care if you take a genuine interest in their future, and are likely to return the favour toward your business through their contribution.