Employee development: the key to employee retention and business performance

When thinking about the employee experience, people leaders tend to think primarily of results, whether it’s performance reports or survey results. However, when companies are striving to improve the overall experience, focusing on the process of getting results can dramatically improve results. Culture Amp recently conducted research to understand the key drivers of employee engagement and retention, as well as business performance. An important finding of the study was that employee growth and development were the primary drivers of these results.

Here are some other findings and best practices for employee development that can lead to improved engagement, retention, and performance.

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Employee development is the most cited reason for quitting

According to the study, lack of growth and development was the most cited reason by employees who quit, at 37%. In addition, the study also found that an employee’s dissatisfaction with development would show up in engagement survey responses months before they left. This shows how important growth is for employees and how improving it can better attract and retain talent.

Main reasons for leaving a company

Source: Amp Culture Report

The study also showed that employees who feel they do not have access to learning and development are twice as likely to leave within a year. According to Kenneth Matos, director, people science, Culture Amp, a takeaway is that if you want to retain your employees longer, give them something to look forward to in their careers because of their role.

Another conclusion of the study is that if a manager does not show interest in an employee’s career, the person is 2 times more likely to leave within a year. When managers think about employee development, the 3 Es can be a good learning framework: experience, exposure and education.

Companies can also have thoughtful coaching conversations to better support employee interests, goals, and the way forward. A GROW coaching model is aligned with these conversations:

  • Goal (G) – What are you trying to achieve? Why is this important to you?
  • Reality (R) – What is your current situation? What obstacles do you encounter?
  • Choice (O) – What options do you have? What are the pros and cons of each option?
  • Go forward (W) – Which option suits you best now? How will you measure success?

According to the study, employees who quit were less likely to believe they had good career opportunities at the company. Companies must communicate their vision to their employees so that they can imagine potential paths for career development. Therefore, they must identify their organizational and team needs. This requires defining criteria to determine when new roles will be opened or expanded. Companies should then regularly share these needs with employees. This is important because communication helps people know about opportunities that may arise.

Development is one of the main drivers of employee enthusiasm

The study found that employees are 46% more engaged when they can develop skills related to their interests. This indicates that development is a key factor in the level of employee connection, enthusiasm and commitment to a company. A company that thinks about employee engagement must also think about how to support employees as they work toward their growth goals. The entire company benefits as employees become more skilled and innovative.

The study further revealed that companies whose managers are interested in the career aspirations of their employees have employees 15% more likely to recommend the company and 21% more motivated. These employees are also 15% less likely to think about looking for a new job and 13% more proud to work in the organization.

According to Dany Holbrook, senior scientist at Culture Amp, “development should be guided by regular collaboration, conversation, and coaching between managers and employees.”

Development-focused companies achieve better business results

Data from the study showed that organizations that focused on employee development had better business results in terms of headcount, funding, and stock prices. The data also showed that a focus on development preceded these results. According to the study, companies that have created a development culture increased on average by 24.3% more in terms of workforce than the others. They also received 41.6% more funding than others. On average, they received $77,000 more per employee. This may be because employees who develop their skills exploit their strengths and are more innovative than those who are not passionate about their work. This helps the company excel in the market, attracting more investors.

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To create a culture of employee development, efforts must come from the top. Paying lip service or claiming the need for development does not allow people to incorporate it into their work experience. To turn employee development from a fun-to-have program into a successful one, companies need to ensure that a growth mindset is embedded in their DNA. Organizational leaders need to arm themselves with data such as this study to prioritize a formal development plan and process, as well as a starting point for determining what the process might look like. Having a strong growth culture will help organizations reap the benefits both in terms of employee retention and better business performance.

What steps have you taken to create a culture of development in your organization? Let us know on Facebook, Twitterand LinkedIn.


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