The Case for Employee Development

Many senior managers assume the Great Resignation and the risk of losing top talent is gone, as the tech industry continues layoffs and uncertainty about the economy persists. However, recent data shows that a sizeable percentage of employees are STILL considering quitting in 2023.

According to the Achievers Workforce Institute, 38% of workers are looking for a new job in 2023. Another 23% reported that they might be looking for one, totaling 61% of workers seemingly dissatisfied with their job and open to leaving this year.?

HR must not assume that employees will stay put in this climate and instead be proactive in deploying early interventions to prevent the best talent from walking out the door.?

High employee turnover rates harm a company’s culture, employee morale, and manager satisfaction, not to mention causes a lot of extra work for HR, but it also has a significant impact on a company’s finances.

A 2019 Gallup report reveals that replacing an individual employee can cost 50-200% of that employee’s annual salary.?Gallup also concluded that U.S. businesses are losing $1 trillion every year due to voluntary employee turnover. And that was before the Great Resignation.

Beyond the costs of replacing individuals, employee turnover also negatively affects productivity.?

In a 2022 Gusto survey, 73% of HR professionals report that an employee who has been with the organization for 3+ years is 25-100% more productive than an employee who’s been with the organization for 6 months.

Moreover, 60% of employees interviewed report that a disengaged worker has a ripple effect of decreasing engagement & enthusiasm for others. Thus, greater employee turnover leads to less productive employees. Unproductive employees lead to more unproductive & disengaged employees.?

How do we stop the cycle? Start offering more employee development opportunities.

A 2022 麦肯锡 study showed 41% of participants citing lack of career development as the top reason for quitting their previous job. Furthermore, according to the LinkedIn Workforce Learning Report from 2019, 94% of employees would stay at their jobs longer if they had learning opportunities.?

Career coaching is typically reserved for the top 1% - the C-suite and senior managers. However, this excludes most employees from getting the kind of career development opportunities they desire. If companies can find a way to invest in learning opportunities for employees at all levels, they might wind up saving in turnover costs.

This is important when considering not only our retention goals but also our DEI goals. If we want more diversity in leadership roles and to be more strategic in retaining demographically underrepresented talent, we must provide clear opportunities for growth.

In a 2022 survey by The Conference Board, Black, Hispanic & Latino, and Asian employees reported a 9-10% higher lack of opportunities for career development than their White counterparts. Lack of employee development opportunities across our organizations not only impacts retention and productivity, but also risks a backward slide in our DEI progress.?

Did you know that inclusive companies are 1.7x more likely to be innovative and get 2.3x more cash flow per employee?

(Source: https://joshbersin.com/2015/12/why-diversity-and-inclusion-will-be-a-top-priority-for-2016/ )?

It’s time to be more intentional in our DEI strategies and ensure that talent from underrepresented demographics at your organization are getting the resources and opportunities they need to be successful.?

If you’re looking to increase retention, better engage employees, enhance productivity, and progress in your DEI goals, you have a great case for investing in employee development.?

Find out how your organization could save on turnover costs using our customized cost savings calculator. Book an appointment with a PILOT Inc. crew member today to see the impact employee development could have on your organization’s finances: https://hubs.la/Q01JRt4P0