What is employee development? Its benefits and importance (2023)

In this guide, we will first examine what employee development means. But we'll also look at a number of other facets, including the benefits to the organization and different methods and approaches to employee development.

We'll also detail how HR professionals and L&D specialists can createactionable employee development plansfor their organizations.


  • What is employee development?
  • Benefits and Importance of Employee Development
  • What are the most effective employee development methods?
  • What areas of employee development are there?

As human resource (HR) specialists or learning and development (L&D) professionals, employees are one of the most valuable assets we deal with.

Making decisions about interviews, hiring, and evaluating and evaluating them are daily tasks for most of us. A very important aspect of our work is to focus on opportunities to further develop these assets.

While it may seem like a fairly simple challenge, just practice a bit! - The reality is very different! The way in which we develop the human resources of the company, whether they are as good or better than those of the competition, can very well determine the competitiveness of the organization.

What is employee development?

human resources developmentIt is a process in which employees' existing skills and abilities are enhanced and new ones are developed to support organizational goals.

Inherent in this definition are the following refined points of interest:

  • People development is not just about developing organizational L&D strategies
  • It's About More Than Conducting Mandatory Employee Training
  • It goes far beyond meeting with employees annually to discuss their shortcomings and identify areas for improvement.

Done well, these investments will be more than profitable in the long term, although the development of employees requires investment (time, effort and financing) on ​​the part of the company.

For example, it sometimes costs money to fire an employee with limited skills or to develop those skills to organizational standards. However, if these development efforts lead to long-term employee retention, it's a win-win situation for everyone involved, thanks to a well thought out employee development strategy.

(Video) Why Training and Development Matters

What did employee development do in the above scenario?

  • Avoided the costly (and sometimes time consuming) process of hiring a replacement for a departing employee.
  • Preserve much of the "sunk capital" already invested in that employee in terms of their experience and organizational knowledge
  • It allows HR professionals and L&D specialists to develop (rather than build from scratch) the organizational culture (as opposed to experience and technical knowledge) already instilled in that employee.

In short, the promotion of an employee means that, according to company standards, human capital is used much more efficiently thanIntegrationor indoctrination training for newly hired employees.

Benefits and Importance of Employee Development

A well thought out staff development strategy is important on several levels. And when done right, it can have many benefits for everyone involved, including employees, HR managers, and the organization as a whole.

Some of these benefits include:

1. Performance improvement

For companies to remain competitive in their niche, the organization must continue to outperform the competition.

People development can help the organization meet and even exceed performance expectations.

What is employee development? Its benefits and importance (1)

Those:2017 CSO Insights - Sales Manager Enablement-Bericht

In a 2017 report that focused on the impact of employee development on performance, CSO Insights (the research division of Miller Helman Group) showed how developing sales managers can significantly improve performance metrics, such as quota compliance, income and earnings ratio compliance. In some cases, it invests as little as $500 in employee development.produced a 46.1% win rate improvement, while an investment of $5,000 brought 51.4% more profit for the company.

2. Deal better with unexpected situations

Today's business world is all about constant change. And this change not only brings challenges (for the workforce), but also opens up previously unimagined opportunities if managed well. Therefore, it is crucial that the workforce is able to deal with constantly changing situations quickly and effectively.

"More than two-thirds of business leaders believe that unless their business significantly digitizes by 2020, their business will cease to be competitive."
– Brian Kropp, vice president, Gartner HR practice group.Those.

adaptable employeesthey're great for makeshift solutions where employees with less developed skills would simply accept the status quo.

(Video) The Importance of Training and Development for Employee Performance

One of the benefits of a well-defined employee development program is that it can empower employees to better deal with the unexpected.

3. Learning about the culture within an organization helps attract new employees and increase loyalty

Recruiters can attest that it's not enough to simply post job openings, it's just as important that potential employees want to apply for these positions.

Without the latter, companies will not attract the best and brightest to remain competitive.

According to a white paper prepared by ATD Research (sponsored by Paradigm Learning) titledBuilding a culture of learning, the foundation of a successful organization– Companies are more competitive and agile and their workforce is more engaged when there is a culture of learning and knowledge sharing throughout the organization.

What is employee development? Its benefits and importance (2)

Fostering employee talent development, including through tactics like personalized development plans, creates a highly engaging work environment.

According to the study, such organizations are those that have a history oflearning culture, are three times more likely to use this fact as a recruiting tool. And implementing a strong employee development program is the first step in that direction.

4. Save money by retaining employees

Investing in internal employee development programs is important to ensure that the workforce can do what they need to do to 'keep the ship afloat'. However, employee development can also save a lot of money in the long run.

“Global Talent Monitor report on workforce activity in 2Q18 shows lack of future career development continues to be a major factor in employee burnout, cited by 40% of employees leaving as a reason for job dissatisfaction.

AT&Tfound that only 50% of its 250,000 employees worldwide had the right skills to lead the company into the future. As a result, company management launched a billion-dollar retraining program (the company calls it "retraining"). How has this internal employee development program helped the company save money? Math!

The company calculated that the average cost of replacing a worker who lacked the necessary skills was approximately 21% of that worker's salary. And as employees' base salaries rise, so does the cost of replacing them, making training a much more cost-effective option. Not only do companies not have to start from scratch (as they do with new hires), but AT&T found that companies conserve valuable resourcesinstitutional knowledgeRecycling and retention of the current template.

"It's important for companies to hire and retrain at the top level, instead of constantly going out on the streets to hire new people."
- Bill Blase, Senior Vice President of Human Resources, At&t.

(Video) 3 Big Reasons EMPLOYEE DEVELOPMENT Is So Important & Benefits Everyone, Including Your Business!

5. Help turn potentially good employees into great leaders

If an organization wants to grow, survive, and prosper over the long term, it must create a steady stream of emerging leaders.

Unfortunately, leadership skills rarely come from Ivy League institutions or weekend leadership exercises, although that helps.

Organizations with strong leadership show +37% increase in revenue per employee and +9% increase in gross margin, according to a report by Deloitte's Bersin –High impact leadership. The new maturity model for executives.

Financial KPIs in low and high leadership organizations*

financial performance indicatorAverage for low maturity organizations (†)Average for high maturity organizations (‡)Difference in performance of organizations with high maturity versus low maturity
billing per employee402.35551,65+37%
Bruttogewinnmarge§43%47%+9 %

Those:Bersin de Deloitte, 2016.
*Effects are significant at the 95% confidence level. We control for the size of the organization through regression analysis, using both the number of employees and revenue as control variables, where appropriate.
† An organization is considered "low maturity" if its composite score is in the bottom 50% of all organizations included in this study.
‡ An organization is considered "Very Mature" if its composite score is in the top 50% of all organizations included in this study.
§ To calculate the percentage difference, 47 percent minus 43 percent divided by 43 percent and multiplied by 100 equals 9.3 percent.

An American Management Association®outlines 10 leadership qualities that aspiring leaders must possess. Usually, the qualities required to turn good people into great leaders come from within your own organization.

One of the benefits of establishing an internal employee development program is that these leadership skills can be tailored to the organization's standards.

Top 10 Leadership Qualities List

  • Be results oriented
  • Be customer focused
  • have a vision
  • Be strategically focused
  • Let other people do the work effectively
  • Be good at managing conflict
  • ask big questions
  • Make quality decisions
  • be a trusted leader
  • Be an amazing communicator

6. Improve employee engagement and motivation with good training

Having a workforce that is fully engaged and involved in the business at all levels is critical to success. Rideemployee engagementKeeping them motivated for the company's mission depends on several factors, such as a good work environment, recognition and appreciation from employees, regular communication, and excellent training.

studiesDale Carnegie Institutediscovered that ahighly engaged employees can lead to extraordinary productivity gains, up to 202%🇧🇷 Actually,85% of executivesWe believe that employee engagement is a strategic priority.

According to Gartner, employee engagement is low worldwide and has been low for at least the last two decades. The most recent Gartner Global Talent Monitor found that only 32% of employees worldwide report a high intention to stay and only 14% report a high level of volunteer effort in everyday life.

A well-defined employee engagement program can balance all critical employee motivation factors, including training and skills development, to deliver the benefits of a fully engaged workforce throughout the organization.

7. This gives the company the flexibility to expand, innovate, and compete more strongly in its niche.

To be a true market leader in your niche, it is important for companies to be agile, flexible, and adaptable to the needs of their customers and partners.

A balanced workforce with the skills to innovate and compete for new business opportunities is an advantage that strong employee development plans offer companies.

(Video) Why Is Employee Skills And Development Important

These programs not only build on existing skills, but can also be used to teachlong-term competitiveness by teaching new skillsthis may be necessary in the future.

In short, a well-trained, dynamic and highly motivated workforce is essential for any organization. And the best way to ensure that employees meet these standards is to invest in their ongoing development. These employees not only provide financial benefits to the organization in terms of profitability and performance improvements, but also contribute to employee morale and retention.

What are the most effective employee development methods?

There are many methods and types when it comes to employee development, but it is clear that some are more effective than others.

As you'll see, employee development is more than just creating a training program, although training is one of the listed methods.

It's much more robust than that and involves exposing employees to new information and ideas in a variety of ways, from putting them in other roles, creating a mentoring program, and even using virtual reality.

As with all types of learning, people respond differently to each type, and success depends on the person being trained and what they are learning.

Despite these differences, there are some methods that are more effective than others, namely:

  • Training
  • Task/Job Rotations
  • Training
  • maintenance
  • workshops/committees/working groups
  • simulations
  • conferences
  • on the job training
  • self study

For a full explanation of each of these methods, check out our detailed article onEmployee development methods..

What areas of employee development are there?

It is not enough to simply decide that your organization needs people development, you must also be able to identify which areas specifically need development.

Without a complete understanding of it, you will not be able to develop one.employee development plan.

Each of these critical areas encompasses many different types of skills, fromleadership conflictfor relationship building. Some areinterpersonal skills, Others areHard Skills, but overall, they will all help your people to be more effective and ultimately lead to better business results.

The top 7 areas of employee development with room for improvement are:

(Video) Why is employee development important? By Alan Schnurman

  1. flexibility
  2. communication skills
  3. Conflict resolution, tact and work ethic
  4. leadership skills
  5. organizational skills
  6. creativity skills
  7. cope with stress

For a full guide to all of the areas listed above, check out our article onEmployee development areas.


1. The Importance of Employee Training
(Corporate Culture Revolution)
2. Benefits of Internal Employee Development Programmes
(Convey Law)
3. Employee Training and Development - Reasons and Benefits
4. Employee Training and Development: The Benefits and Why it's Important
(Roldan, Lyca R.)
5. Creating an Employee Development Plan for Improved Employee Performance
(Stephen Goldberg)
6. Importance of Training Employees.| Employee Development - Sanjay Sehgal
(Sanjay Sehgal)


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