It’s always a nice story when an employee comes in on the ground floor and is eventually promoted to the executive team. But it’s more than an inspirational story to share with the media and new recruits—developing employee talent from within also makes smart financial sense.
Employee turnover costs U.S. businesses $11 billion annually, according to the Bureau of National Affairs. Expenditures related to finding, hiring and training new workers, lost clients, and team disruption are expensive. In a CareerBuilder survey of 6,000 hiring managers and human resource professionals, 27 percent of U.S. respondents reported that a single bad hire costs more than $50,000.
But talent development should aim to do more than just keep workers in their seats. Studies also show that employee development leads to more engaged, innovative team members—and contribute to profitability. A study by Deloitte found that mature, high-impact companies spent 34 percent more on training and development than their lower-impact peers, and numerous companies report returns on their investment dollars as high as 200 percent.
So what are some of the high-impact ways that small businesses can develop their own talent for maximum impact? Here are six tools:
Companies report significant returns on investments from their in-house training programs. These can include empowering senior workers, harnessing institutional knowledge, and charging employees with on-boarding their peers to cement teamwork—as opposed to relying on a manager, manuals, or human resources. Another tactic includes cross-training, where workers rotate to be trained in complimentary departments in order to broaden their knowledge of the entire organization, as well as promote cooperation and understanding.
It’s no wonder 71 percent of Fortune 500 companies have mentoring programs—assigning employees a mentor can be a great way to not only express your interest in the worker’s long-term career success, but also develop leaders at your company. Some organizations match junior employees with a mentor who is also a senior manager within the organization, while others seek out mentors through industry organizations or through third-party mentor programs. Decide if this will be a program which selects high-potential employees through an application process, or if all new hires are paired with a mentor.
While a mentor relationship typically focuses on long-term goals and relationships, coaching is increasingly popular for its emphasis on creating and reaching specific, short-term goals. In a corporate setting, an employee’s immediate manager is often involved in the process—alongside a professional coach—and helps identify skills to be acquired. These skills may include public speaking, project management, or interpersonal communication.
University and Certificate Programs
Depending on your industry and the position, investing in formal coursework may be an investment in both the worker and your company—especially if it results in a title that can fetch higher fees or perceived value from clients. It’s important to create formal guidelines for how much your company will pay, and the conditions under which employees are eligible for this benefit.
Conferences, Seminars and Professional Organizations
When your workers participate in industry groups and events, they—and by proxy, you—gain access to a network of peers, vendors, thought leaders, and case studies—all of which trickles back down to your bottom line.
Online Skills Education
E-learning is an increasingly popular option for many growing organizations. For monthly fees starting at $25, Lynda.com offers more than 3,300 online professional video tutorials in topics ranging from office software, programming languages, photo and web development software, as well as professional skills like presentations, communication, and productivity. Other resources for acquiring general business skills include SkillSoft and Robert Half, but be sure to research resources that are specific to your industry.