Why Career Development is Key to the Retention of Top Talent
Career development is an important part of a successful employee experience, both for the employee and the organization. The benefits of providing career development strategies are well documented: Organizations that offer employees opportunities to learn and grow have happier, more engaged workers who perform better. But what's often not talked about is how career development can also contribute to retention rates - especially when it comes to top talent.
The hidden costs of employee turnover
It’s no secret that employee turnover is expensive. A study by the Society for Human Resource Management found that the average cost of losing a high-performing employee is six to nine months' salary to replace them. Other studies, including one by People Keep, state that it might in fact be much higher. Their data suggests that the costs range from 100% to 213% of an employee's annual salary. Some of the other less tangible costs associated with high turnover include:
Damaged company morale: High turnover creates an environment where employees are always on edge. This leads to a lack of engagement, which affects productivity and ultimately the bottom line.
Lost institutional knowledge: When an employee leaves, they take their experience, skills, and knowledge with them - creating a void in your organization that may be difficult to fill.
Cultural impact: The departure of key employees can also have a negative impact on culture because it may send the message that there's something wrong with your organization or its leadership if people are leaving so quickly.
Lower productivity of the departing employee: This often begins well before an employee has given notice of their departure.
While we can all agree that turnover is costly, it's important to remember that employee retention isn't just about saving money - it's also about maximizing the potential of your workforce and creating better working conditions for everyone involved.
According to the 2018 Retention Report by Work Institute, 77% of employee turnover is preventable by employers. If you want to retain top talent and reduce the many costs of turnover in your organization, start by offering meaningful growth opportunities for all employees - regardless of tenure or experience level - so they can reach their full potential while staying motivated at work.
Solving retention issues through career development
In a 2018 study conducted by LinkedIn, the lack of opportunity to advance was rated as the number one global reason for employees’ reasons for departure from an organization. Similarly, survey results from a study conducted by Work Institute saw the number one reason for employee turnover in an organization be the lack of opportunities for career development for the eighth year in a row.
Reem Darwish has seen firsthand how career development can lead to a more successful and cohesive workforce. As the principal business partner of learning and development at Hyundai Mobis, she further explains her experience with the direct effects career development can have on retention.
“A common thing I see is that people feel they’ve already learned everything they can in their current role - and that they’ve reached their capacity and they’re hungry for more enrichment. After a couple of years in a position, people start thinking, ‘What’s next?’”
The solution to a retention problem clearly isn’t just to offer bigger raises and better benefits. Instead, it’s about giving employees the opportunity to develop their skills so they can grow into new roles or take on more responsibility within their current roles, and making this a part of your corporate culture.
Having a consistent plan is the key to retaining top talent
Now that we understand the importance of career development, we can take a moment to explore what exactly it is, and how you can develop an actionable strategy. Career development can be defined as the support an organization provides to employee professional growth. In order for an employee to feel like they're growing within their role at work or in general, there must be a consistent plan for career development in place so that everyone knows what steps they need to take next on their path toward success.
Four tips to build a career development system
Assess the Current State
Create the Structure
Mentorship
Outsource HR Needs
Let’s explore a few starter tips for building an in-house career development system for your organization:
Assess the current state
Assessing the current state of career development within the organization is key. This assessment should involve gathering data on employee career aspirations, identifying skills gaps and career development needs, and understanding the organizational culture and resources available for career development. Based on the results of this assessment, the organization can develop a strategic plan for its career development program, including specific goals, objectives, and action steps. This plan should align with the organization's mission, values, and business strategy, and should be communicated clearly to all stakeholders involved in the program.
2. Create the structure
Following the assessment, we then create the structure. One-on-one meetings is a great first step as it allows employees to be more intentional about their careers moving forward by having them set goals and keep track of where they are headed. It also helps build trust between the employee and manager so that if performance slides, psychological safety has been established and the relationship is solid enough to bring forward concerns.
3. Mentorship
Oftentimes, we're so busy with our daily responsibilities that we don't have time to train new hires or up-skill existing employees without going through the process of scheduling training sessions and keeping track of progress. A mentorship program can be a great way to overcome this challenge by pairing experienced employees with newer ones who need guidance or support on specific projects or issues. Mentors can help less experienced employees navigate the challenges of their roles while also helping them gain relevant experience and build on the confidence of both parties.
4. Outsourcing HR
Outsourcing your HR services will allow you to do what you do best: run your organization! It also gives you more time to focus on other areas of the organization that may require more attention at the moment. Understanding that retention and career development should be top of mind for your organization, you can work with a trained professional to help build your career development program.
Summary
Employees are vital to any organization. They're the ones who create value, solve problems, and keep the organization moving forward. That's why it's important to invest in them - not just financially but also by helping them grow professionally. The best way to do this is by providing employees with a consistent plan for career development that meets their needs as well as the organization's goals.