How Professional Development Dramatically Impacts Your Bottom Line

The value of investing in professional development cannot be overstated. It’s the perfect combination: employees crave professional development opportunities, and workplaces need skilled, talented employees. When your organization invests in development programs, you can help attract top talent, retain your best employees, and build out a skilled, future-ready workforce. 

Most companies invest in new software, acquire new properties, or even fund new projects. But, what good is new software if the user has no idea how to work it? What is the point in investing in new projects if your employees are still applying outdated principles to them? Professional development training keeps your employees up to date with what is going on in the field, expands their skill sets, and allows them to do their jobs more efficiently.

The Cost Of Investing In Professional Development

A strong, effective professional development program requires an investment. However, the costs associated with training and development can vary based on your company.  In 2020, the average company spent about $1,111 per employee on training. As the size of the workforce increases, organizations typically spend less per employee.

When budgeting for your organization, it’s best to keep in mind and track your spending on development per employee. This will enable you to better forecast and budget for the future.

Benefits Of Investing In Professional Development:

Employee and professional development opportunities have been rising in the ranks of importance for job seekers. Recent studies have shown that 34% of employees left their previous positions due to having more career development opportunities from other employers. It’s clear that employees are taking professional development very seriously. Working professionals want to advance in their careers by training in new areas.

When you invest in professional development, you’ll see benefits like:

• Increased Retention — Retention rates rise 30-50% for companies with strong learning cultures. This shows employees you care about their career progression and are interested in keeping them at the company long term. 
• Easier Succession Planning — Did you know that internal candidates can fill 42% of critical roles quickly? Promoting from within has its benefits, such as preventing learning gaps and decreasing turnover rates. Additionally, you know your employee’s track record and performance, reducing the risk of taking on a new hire. 
• Improve Efficiency — When you invest in developing employees, they can share their new skills and insights with the team, helping everyone become more knowledgeable and efficient. With new perspectives, you can rework old processes and procedures to better apply to your current needs.
• Prepare Future Leaders — Professional development allows you to invest in the next generation of company leaders. Due to the effects of the pandemic, many companies have undergone a massive shift. With professional development, employees can learn to balance organizational needs, customer requirements and understand the market state.

When you invest in your employees’ professional development, you’ll find yourself saving money on recruiting and onboarding while having a more highly productive workforce.

The ROI Of Investing In Professional Development

The best way to understand the impact of professional development is to look at the return on investment (ROI). Your shareholders will want to see the benefits of such an investment, and you need to be sure that your efforts are working as intended. Some things to analyze include:

• Retention rates — As stated earlier, you can reduce the likelihood of turnover by 30-50% with training and development programs. Check out the reduction in turnover after you implemented a professional development program. How does this number compare to before you started your initiatives? You should see a decrease in the number of employees leaving your organization. 
• Productivity rates — When your team is well-trained and highly skilled, you should see productivity increase by up to 10%. Keeping your team focused and working efficiently will make a significant impact on your bottom line. 
• Engagement levels — As you invest in professional development, you’ll find that employee engagement rates rise. Employees like to know they are advancing their skill set and adding value to the processes. This has a rippling effect on other metrics of your organization. Companies with high levels of engagement are 21% more profitable and see 41% lower rates of absenteeism in employees. 
• Recruiting and onboarding expenses — With a more skilled and loyal workforce, you’ll find you spend less money and time recruiting and onboarding new talent. This can lead to significant savings, seeing as an average mid-sized company spends upwards of $40,000 a year on onboarding.

Did you know? It pays to invest in the development of your employees. Depending on the effectiveness of your efforts, you can see an ROI of upwards of 350%!

Professional development can greatly aid in your company’s success. To stay competitive in the recruiting space, your company needs to offer learning and development initiatives that compare to other organizations. And, to keep your existing team happy, you’ll need to provide them with the support and space to learn new skills and advance within your organization. With the right approach, you can create a development program that churns out highly talented employees, reduces turnover and recruiting costs, and impacts your bottom line with a positive ROI.

Investing in professional development in the workplace can be challenging, but Caliper makes it easy. We help employees reach their full potential by going beyond traditional training with self-awareness. Download our Personal Development Guide today to plan out your company’s goals, behavioral changes, practice, and more.