Discussing with clients about why they invest in L&D is always interesting. Every client is different, so the conversations take unique turns. Over the years, we’ve noticed a few recurring themes in their responses.
Even though these talks are informal, not formal surveys, the answers tend to fall into three main categories:
1. Retention, Productivity, Motivation
Retention: Replacing skilled employees can cost companies a lot—half to double an exiting employee’s yearly salary. When employees feel valued and supported, they’re less likely to look for other opportunities.
Productivity: When employees have the right skills for the job, they work more efficiently. In our rapidly changing world, with agile work cultures becoming the norm, staying updated is crucial. Staff need skills to adapt fast, be effective, and challenge the status quo.
Motivation: L&D equips employees with tools to be productive and helps them grow, take on new opportunities, and assume more responsibilities. This leads to progress, success, and potentially better pay, perks, and promotions.
Other benefits of L&D investment are often discussed too. These include attracting top talent, fostering innovation, thought leadership, and promoting collaboration.
2. Strategy – Organisation Capabilities – Implementation Levers
Conversations often shift to a strategic perspective, linking a company’s strategy with the capabilities needed to execute it.
Some see human capital management as a key lever to ensure the organisation’s collective capabilities are in place. Other levers might involve organisation structure, processes, and technology. Here, L&D is seen as a crucial part of human capital management.
We often delve into the 70:20:10 rule during these discussions, highlighting how formal L&D can inspire continuous learning. L&D aids in change management, reinforces company values, and nurtures the company’s culture.
3. ESG Commitments
Some responses elaborate on a company’s commitment to communities and the ESG metric of Human Capital Development (HCD), a metric to which some ESG rating agencies place great importance.
Companies have diverse reasons to strive for a strong HCD score. It reflects not only the broad performance of Human Capital Management but also talent development specifically. HCD scores hint at reputation risks a company might face. They showcase how well a company involves and collaborates with local communities impacted by its operations, a major concern for those aiming to make a positive community impact. The benefits of sustained HCD can therefore include increased brand loyalty, customer satisfaction, and employee engagement.
In conclusion, L&D plays a pivotal role. Yet, we must grasp our staff’s development needs and choose L&D interventions that genuinely benefit both employees and the business.
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