Investing in Growth: Why Employee Development Should Top Your 2025 Budget Priorities

Tis the budget season…

We have to keep the discussion going!

Thank you all so much who reached out. My last article on generation Z and workforce skills readiness got some great discussion going and important feedback. Thank you everyone who reached out to have a deeper conversation and to share your experiences. If you missed it you can check it out here. The discussion has led to a further conversation with funding staff development and who should be responsible for training workers with these skills.?

Why does it have to be so hard?

For the 14 years I sat in the HR (and frankly (12 years in operations) chair, I was constantly fighting at budget meetings and truly year-round to defend development programs for our employees.? I would find that often when organizations assess priorities, they decide to cut perceived losses, lean into what they feel they are doing well, and hoping they make the right decisions for the year around their work.?I was constantly defending my team’s work.? I would say often “we might not be money makers, but we are money savers”.? When we hire the right people, train them and keep them motivated, we increase efficiency and lower turnover.

In today's competitive marketplace, companies that invest in employee development aren't just building a more skilled workforce; they’re creating a culture of resilience, engagement, and productivity. Employee development has proven critical to not only enhancing skills but also fostering loyalty and reducing turnover, ultimately benefiting the organization’s bottom line.

Challenges in Employee Development

Despite the benefits, funding employee development often faces obstacles, particularly in accessibility and budget prioritization. Limited funding or a disconnect between resource availability and awareness can lead employees to miss out on valuable training opportunities until it's too late.

As an HR professional, I frequently encountered resistance during budget discussions. It can be challenging to justify funding for development programs, especially when they're viewed as non-essential and/or non-money makers. However, these programs are not just a cost but a long-term investment. Hiring the right people and equipping them with the skills they need reduces turnover, enhances productivity, and eventually results in cost savings.

Did you know…

Here are some important statistics. ?

• Employee Retention: Companies that invest in employee training have a 24% higher profit margin than those that don’t, and 94% of employees say they would stay longer at a company that invests in their development (Society for Human Resource Management, SHRM).
• Productivity and Engagement: Organizations with a strong learning culture report 37% higher productivity and are 92% more likely to innovate (Association for Talent Development, ATD).
• Cost Savings: Replacing an employee can cost up to50-200% of their annual salary, depending on the role. Investing in development reduces turnover, resulting in cost savings (Society for Human Resource Management, SHRM).
• Skills Gaps: A survey found that 87% of executives experience or expect skill gaps within their workforce, which impacts business outcomes. Employee development is crucial to closing these gaps (McKinsey).
• Company Growth: High-growth companies are 3.6 times more likely to emphasize people development as a top priority (LinkedIn’s Workplace Learning Report).
• Employee Engagement: Employees who feel their employer supports their career goals are 4.6 times more likely to feel engaged at work, leading to better performance and reduced absenteeism (Gallup).
• Competitive Advantage: 74% of employees feel they aren’t reaching their full potential due to a lack of development opportunities. Offering training not only boosts employee potential but also enhances the company's competitive edge (Work Institute).

Strategies to Overcome Resistance

Ensuring buy-in from all levels within an organization can be challenging, especially for initiatives involving change. Strategies for minimizing resistance include:

• Clear Communication: Transparency about training benefits and impacts on roles fosters trust.
• Employee Involvement: Engaging employees in planning creates ownership.
• Showcase Early Wins: Demonstrating quick results builds momentum.
• Continuous Support: Providing necessary resources ensures employees feel equipped throughout the training.
• Celebrate Successes: Recognizing milestones boosts morale and encourages ongoing participation.

Organizations that prioritize employee development create a skilled, loyal, and adaptable workforce capable of meeting modern challenges. These programs are not only beneficial for individual growth but are instrumental in driving organizational success. Investing in development is more than a strategic decision; it’s a commitment to building a sustainable, resilient workforce that can weather economic and industry changes.