By making learning and development a strategic priority, employers can benefit from measurable return on investment

By Karmen Blackwood
Canadian HR Reporter
Feb 9, 2015

Training and development dollars are often the first to disappear when organizations tighten belts, which is unfortunate — developing staff is essential to the success of any organization.

While many managers pay lip service to the importance of creating an organizational learning culture, in a faced-paced world where people are being pulled in 100 different directions, and dealing with sometimes severe resource constraints, other priorities often take precedence.

However, it is very important to make learning and development a priority and ensure employees’ skills, abilities and knowledge levels are being regularly updated.

There are many reasons for investing in employee training and development plans. Examples include:

  • onboarding new hires
  • individual employee development plans, where you are training to fill a skill or knowledge gap, address a performance issue or prepare an employee to take on greater managerial or leadership responsibilities
  • succession planning, where HR has identified high-potentials and is grooming the next generation of leaders
  • addressing technology changes and providing the skills and knowledge needed to leverage new and emerging technologies
  • addressing legal or regulatory issues and changes
  • helping a team address a range of issues and opportunities around growth and change, including helping the team and organization respond and adapt to structural change in the economy.

In creating an organizational learning culture, there are solid best practices but there is no one size fits all. Organizations need to examine their own context, culture and strategic goals and develop an appropriate organizational training and development plan for all levels of the organization that includes a selection of public, open-enrolment programs of choice for employees’ individual learning needs and custom in-house training for team training and development needs.

In addition to this, there should be systematized coaching and mentoring and on-the-job training plans in place and available for all employees. It is important to cascade the learning throughout the organization, and it is always imperative to ensure consistency in the training and development approach across the organization.

Some of the key benefits to organizations that make employee training and development a priority include:

Increased productivity: Timely and relevant training helps boost productivity. By closing skills, knowledge and performance gaps, and arming employees with new ideas, best practices and skills they can put into practice in their jobs right away, their competence, ability and confidence levels increase. As a result, these employees are able to make better decisions and do their jobs smarter and more efficiently.

Return on investment: By making training and development a strategic priority, and implementing it in a thoughtful and deliberate manner, an organization can benefit from measurable ROI. HR can measure for impact, for qualitative and quantitative ROI, and there are various ways to do so. For example, you can do pre- and post-training assessments and measure the improvement; this can then be translated into financial return when you calculate the value of saved time, increased productivity, increased sales, for example. It is important for organizations to view training and development as an investment, not an expense, and to leverage training and development for the achievement of business and organizational goals. Investment in employee training and development should be regarded as a capital investment where you will look for ROI.

Increased employee satisfaction and retention: The costs of employee turnover can be high, and not only in pure financial terms. There are many hidden costs executives find hard to calculate, and some estimates place the costs of employee turnover at anywhere from 150 to 250 per cent of an employee’s annual compensation, depending on how senior or specialized the position is. By investing in employees’ training and development, an employer helps employees feel more connected, valued, accountable, focused, and part of the team. And while we cannot expect any employee to stay with an organization for their entire career — nor do we necessarily want them to — training and development has been proven to increase employees’ sense of loyalty and decrease turnover. Most people by nature want to learn new things, expand their knowledge base and skills set, grow as professionals and advance in their careers. When an organization has invested in their development, both the company and the individual can reap great rewards. Training and development can not only be a tool for filling knowledge and skills gaps, but also for rewarding employees who are high-potentials and high-achievers.

The subtext of all training and development — particularly in-house (custom) programs — is always team-building. These initiatives tend to bring employees closer together, strengthen culture and help individual team members identify new partners, collaborators, mentors and subject-matter experts within the organization whom they can turn to for advice and share ideas
with.

Fostering an organizational learning culture: It is important to foster a learning culture, one where expectations are clearly set from the outset and the benefits to the employee and the organization are shared. It is also important to be able to point to success stories within the organization, and to always walk the talk.

By sending employees to open enrolment (public) courses and workshops where they can network with their peers at different organizations and across industries, they are provided with the forum to test ideas in a safe environment and discuss ideas and best practices they can bring back to their organization. They should be encouraged to apply these new ideas to their own workplace immediately, and to share ideas with their teams back at the organization.

One way of doing this is to encourage the employee to host a lunch-and-learn, where they can present the key takeaways to their teammates. This will also help with the transfer of knowledge as it will help to reinforce a culture of learning and create common language and frameworks for the team.

Organizational learning is an ongoing, dynamic process and it should become part of an organization’s DNA. A learning culture supports a community of learners, as a total organization, where — at all levels — everyone teaches, everyone learns, everyone shares knowledge. Individual and collective learning is encouraged and rewarded. And those organizations that embrace these values will be able to gain and sustain competitive advantage over competitors that do not.

Employees are a company’s greatest assets. While employers upgrade plants and equipment, they need to renew individual skills sets, upgrade teams and arm employees with what they need to remain competitive and do their best work. In this increasingly competitive global marketplace, organizations that invest in employee training and development are the ones that will win.

Karmen Blackwood is Director of Continuing Studies & Executive Education at Capilano University in North Vancouver, B.C. For more information, contact karmenblackwood@capilanou.ca

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Reprint was created with permission on January 28, 2015 from the February 9, 2015 issue.