Training your employees, common sense tells us, builds loyalty and capacity and makes your organization more likely to retain talent for longer. But is this sensible assumption really true? Recently two professors for the University of Iowa decided to find out.
Management professors Scott Seibert and Maria Kraimer surveyed 246 pairs of employees and managers at Fortune 500 companies, asking them both about available professional development and opportunities for advancement. What they found is that while training is nice, without advancement opportunities to follow it up, your efforts to build employees’ skills will likely benefit your competitors rather than yourself.
"Only those employees who can see a way forward in their careers will stay with an employer. Otherwise, professional development opportunities might simply make their workers more employable by other firms," Seibert explained.
High costs, limited ROI
The researchers conclude that without giving careful thought to channeling your newly trained employees’ ambitions, much of the $134 billion business spends on employee development each year may be wasted.
“More developmental support is associated with higher performance and lower turnover generally. However, when career opportunities are low, development support was not related to performance and it actually increased turnover," said Kraimer.
But don’t think that just because you have to supply advancement opportunities to get the most out of your training program, you need to give everyone who completes a course or module a promotion. The study’s authors conclude that a range of less drastic measures can make employees feel like their efforts at self-improvement are appreciated.
According to the study, "career opportunities are perceptual in nature, so raising perceived career opportunities for employees may be largely a matter of letting employees know more about the range of possibilities that are already available within the organization."
So rather than hand out new titled or raises, simply providing mentors, job rotations and opening conversations about possible career advancement can ensure your training investment pays off.
London-based blogger Jessica Stillman covers generational issues and trends in the workforce for BNET.com.