Your greatest asset is your people – it’s one of those business clichés that actually holds a whole load of truth. However, the thing about assets is that their value is always determined by the time and energy you invest in them. And that’s pretty much where we are with the idea of talent development strategies.
In a nutshell, it’s the idea of building your best people in line with your company’s goals and strategic plans. As a result, you’ll seem like a much better proposition and that helps you attract and retain people. The problem is that a lot of people look at talent development as an isolated issue when its biggest value comes through the other things that happen when you invest in it.
That’s what we’ll focus on here, five of the key talent development bi-products that prove its importance.
What’s the importance of talent development?
You can’t always buy or borrow skills, so you have to build them using internal talent! Not only does it help employees support business goals, it drives their development by making them better at their role in the context of their role – boosting productivity, engagement, and retention.
1. It engages and motivates people
If you’ve ever been in a job that feels like it’s going nowhere, you’ll know just how demotivating and demoralising that can be. You’ll also completely understand these numbers. 76% and 68% of employees highly value career growth opportunities and training and development policies, respectively, according to ClearCompany.
Who can blame them!? Without clear development programs and pathways, it’s difficult for employees to see a clear purpose in their work or the ultimate form of recognition for their hard work – the opportunity for progression into higher-paying or more senior positions. But with the UK having an average employee engagement score of just 45%, effective talent management plans make you stand out from the competition.
And, without bombarding you with numbers, disengaged employees are reported to produce 60% higher error rates and cost the UK up to £70bn per year. Wash all those worries by engaging your employees!
2. You’ll keep top talent for longer
We lied about the number overload, but there are some great statistics that highlight how talent development helps you retain employees. It’s linked to point number one, but 94% of employees would stay at companies longer if they took an active role in their learning and development, according to LinkedIn. Those people can see the light at the end of their hard work tunnel.
Another study showed that highly engaged people are 87% less likely to leave their companies. And here’s a number from Willis Towers Watson that really hammers home the point: almost 75% of “high-retention-risk” employees leave because they’ve reached the top of their company’s career ladder.
So, you can’t be all stick and no carrot! People need the chance to progress, and they need to see your strategy for helping them do it. If you can’t do that, it might hit you in the pocket and it’ll cost a lot more than a few loose vegetables. A 5% increase in employee retention can drive a 25% to 85% lift in profitability, while the average cost of replacing an employee for an SME has been quoted as £12,000.
3. It helps you close skill gaps
Have you ever had one of those arguments where you storm off and say you’ll find what you need elsewhere, only to discover it’s not as simple as that? That’s a little bit what it’s like when you’re looking to add skills to your team. The grass isn’t always greener on the other side but where you water it.
A 2020 study of 1,000 business owners by PeopleCert found six in 10 job applicants lack the skills employers are looking for. While 40% of companies told McKinsey that they’re unable to find people with the necessary qualifications, even for entry-level jobs. So, what’s an L&D or HR manager to do?
Assess which skills you’re lacking, understand who has the existing or transferable skills and temperament to build those, and create learning pathways for the right people to reach that destination. Learning pathways should be a key part of your employee development and talent management strategies, and the more personal the better. The more relevant they are to your company and people, the more efficiently they’ll build skill – that’s the power of intelligent learning platforms.
4. It drives better customer experiences
You might be pleased to know that we’re entering the least stat heavy part of this post, there’s just two here! 41% of customers remain loyal because they notice positive employee attitudes, while a negative feeling from staff is the reason why 68% defect. We already know that talent development plays its part in motivating and engaging employees, so that will be reflected when they speak with customers.
There’s also the other elephant on that phone line, won’t knowledgable, better-skilled and high-performing staff be able to deliver better customer experiences? They’ll certainly be better placed to give the right answers sooner.
5. It creates career opportunities
A nice way to round off this article, we’ve already discussed how much employees value progression and here’s your chance to deliver. Ultimately, by using a little bit of each point we’ve covered so far. Understanding your skill gap can help you realise the positions you’re lacking and give you justification on why you need to create them. Or it might be that you implement a development plan that forces your hand by driving an employee to the point where they reach that more senior position naturally.
However you go about it, you’ll create an environment where your top talent wants to stay and you start noticing admiring glances from potential applicants. Here are two final stats that show just how it can help you stand out from the crowd. Only 29% of employees are “very satisfied” with their current career advancement opportunities and yet only 29% of organisations claim to have clear learning and development plans in place.
New reasons for 2023, a year when talent development could be more important than ever.
We’re writing this just before we hit 2023, at a time when terms like cost living crisis, redundancies, hiring freezes and budget cuts are all popping up in our news feeds more than we’d like to see.
And that means there are new reasons why talent development is probably more important than ever.
6. Talent development helps build skills when we can’t buy or borrow them
When we’re facing those hiring freezes, redundancies, and budget cuts, it’s incredibly difficult to buy or borrow the skills we need – we can’t recruit new people, and our pounds don’t stretch to expensive freelancers.
And that leaves us with one option: build from within! Help your current employees build the skills you need and offer them progression at the same time. The fact those people become integral to the company mission and are a part of truly meaningful work only heightens their sense of purpose, which aids retention.
This is also the most sustainable option for the long-term. Eventually, we’d run out of budget to hire or borrow freelancers to fill skill gaps, and so we’d end up at the same point in the end.
7. Employer brand has never been more crucial
The factors above all feed into how your employer is perceived! Do you offer progress, mobility, and promotion from within? If you do, your employees are might likely to speak positively about you to others.
LinkedIn posts, Glassdoor reviews and word-of-mouth recommendations all add up to how willing great people are to apply for roles in your company.
In challenging times, it’s even more important that we hire the right people for roles. We want good cultural fits and people who can drive performance, and we’re more likely to get those with a strong employer brand.
HowNow can help you shape an effective talent development strategy
This isn’t going to be a long and boasting monologue, we’ll just keep it to two of the issues we looked at here. When it comes to upskilling, it’s crucial that you understand which skills are in-demand and can monitor progression. We collect and analyse more than 500,000 live job roles so that you can benchmark your skills against what’s important, and also allow you to measure skill proficiency through self and peer review.
What happens between those points all depends on your learning pathways and whether they’re effective. Personalisation and relevance are two of the key determinants and you can tick both of those boxes in HowNow. Use your best internal resources, expert knowledge and high-quality content from third parties to tailor courses to individuals – ensuring they complete their talent development journey sooner, better and with a smile on their face.
Check out our other people development resources
- How People Leaders Can Create Effective Learning Strategies | The Definitive Guide
- Why you need to train and develop your employees
- How innovative companies train their employees (Google, Amazon, Uber & more)
- Training and development: Why forward-thinking companies need to add learning to the mix
- Why employee development is the key to driving people and businesses forward
- Build A People Development Strategy That ACTUALLY Develops People
- 5 reasons companies fail to retain talent
- The 7 Skills Every Successful People Development Professional Needs To Develop