Why Investing in Career Development Can Save Your Budget
The precarity of our economy has made employee retention one of all managers’ top concerns this year. Unemployment may be low, but wages are about the same, which means talented recruits have more options than ever if they’re dissatisfied with their current position. Instructure’s survey released earlier this month shows that 70% of US employees say they’re somewhat likely to leave their current company and not because of the cash flow.
Many managers feel the same way about onboarding and retention that I feel about fabric softener. It costs more than it should, but it keeps everything smooth, clean, and comfortable.
Yet when budgets get tight, retention often comes out of focus and everyone gets a little stiff. The fabric softener gets watered down. Onboarding is associated with dollar signs, a funnel of money where the only thing that you’re selling is yourself to your prospective recruits, and maybe trying to smell nice along the way.
But it turns out that recruiting and retaining top workers isn’t always about the money. The current economy has indeed made retention a huge issue that deserves adequate investment. However, such investments may be closer to home, and even more budget-friendly, than you think.
The Cost of Career Development
Instructure and the Harris Poll teamed up to survey 310 employers and 1,443 full-time employees about satisfaction, retention, and career development. The results reveal a striking disconnect between employers and their talent when it comes to investing in employees.
98% of the employers surveyed said that they offer career development tools, and 69% expressed that they feel development is important to retention. However, only 26% of employees rated the career development tools being offered as effective. That’s right, Instructure reminds readers that “employees give an F to their employers for employee development.”
Career development is one of the leading reasons that people leave jobs, second to compensation, of course. No matter how much money you can throw at people--which these days, is not much anyway--they will still be dissatisfied if there’s no opportunity for development. This is in part because of shifting values in the workforce, where millennials, in particular, are seeking quality over quantity.
That means a majority of the workforce is already scrutinizing their employer’s use of resources, and with current unemployment rates, won’t hesitate to look for better opportunities elsewhere. Three out of four employees told Instructure they “feel like they’re on their own” when it comes to career development and are forced to take it into their own hands.
Bridging Development Without Busting Budgets
In these circumstances, employee turnover, not retention and investment, is the real budget buster. Compared to the ghastly costs of turnover, the cost of investing in better career development opportunities is microscopic.
The average cost to fill a position can range anywhere from $3,000 to $18,000 and up, and if recent research is any indication, the cost is only going to grow. Last year’s National Retention Report showed that turnover costs will increase to $680 billion overall by 2020.
That’s why, in light of recent findings, balancing your budget and retaining employees requires a development strategy that supports employer, manager, and employee alike. And chances are, unlike complete turnover, it won’t cost everyone billions.
An adequate employee development strategy isn’t focused on bells and whistles, team-building activities, or one or two cool pieces of software. Development should stretch all across the board to include proactive coaching, long-term goal setting, and steady feedback with open dialogue between managers and their teams.
These are large changes of culture that don’t come with a huge price tag but do come with some hefty benefits--including keeping your best talent for the long haul by tangibly demonstrating investment in them.