For many candidates seeking new professional opportunities, learning & development (L&D) opportunities can be make or break. In fact, according to research by LinkedIn, new employees who don’t believe they can achieve their career goals with a current employer are 30 times’ more likely to consider leaving.
L&D has benefits for organisations, too – not only in terms of productivity and profits, but also for developing future leaders. Research highlights that companies that invest in employee training enjoy 24% higher profit margins than those who don’t, while those that invest in developing leaders during significant transformations are 2.4 times more likely to hit their performance targets.
By embedding L&D into the fabric of its culture, an organisation will be in a better position to retain their new hires as long-serving employees.
In this blog, we outline why it’s so important for employers to demonstrate their commitment to professional development from day one.
1. L&D is a key draw card for candidates
Research from Gallup shows that organisations that have made a strategic investment in professional development are twice as likely to retain their employees. This is particularly true for millennials, for whom development is a key priority when choosing an employer.
Demonstrating your commitment to professional development will demonstrate to new hires that they have made the right decision in joining your company.
HROnboard’s onboarding solution offers personalised inductions in which employers can promote their commitment to L&D throughout the onboarding process.
2. The first six months are a high stakes period for new employees
According to research, 40% of new employees quit in their first six months of a new role. Given this surprising statistic, it’s clear this period is a high stakes one.
L&D can also be made a key part of the total rewards offered to employees. A total rewards approach takes a holistic view of everything an employer can offer to employees. This includes the mix of financial and non-financial benefits, and all the development opportunities provided to employees. A total rewards approach should be communicated not just to candidates but also be followed through with new starters. By clearly outlining what the organisation can offer – and continuing to do so – it’s more likely employees will stick around for longer.
For more information on developing a total rewards strategy, download our free whitepaper here.
3. It’s an investment, so make it count as part of your employer brand
Research from ELMO’s latest HR Industry Benchmark Report revealed the average employer spends $6,600 annually per employee on training, so given this level of investment, employers should ensure L&D opportunities are positioned as a key part of their employer brand. This will help boost an organisation’s reputation as an “employer of choice.” Ensure your learning opportunities are clearly communicated in any candidate-facing advertising and marketing, such as videos on the jobs page of your corporate website, or job ads.
4. Hiring is more expensive than employee retention
It’s well-established that the cost of turnover can be harmful for business, not to mention for staff morale. ELMO’s 2020 HR Industry Benchmark Report revealed it costs on average $10,500 to hire one employee.
Personal development is always a risk when it comes to new hires, but not investing in this initiative is riskier – not to mention more costly. There is a well-known HR story that describes an L&D conversation between a CFO and a CEO. In this dialogue, the CFO airs their concerns around employee training costs, saying “What happens if we invest in training and the employee leaves?”, to which the CEO responds “What happens if we DON’T invest in training and the person stays?”. This highlights that while L&D is an investment, it’s one that will enhance business performance; and that should an employee leave having undertaken training provided by the company, they are more likely to do so as an advocate, as opposed to an embittered departing employee with the potential to harm the organisation’s reputation.
5. It shows the ‘bigger picture’ to new hires
Connecting L&D initiatives to broader organisational objectives will mean more motivated employees, whereas employees who don’t understand the roles they play in company success are more likely to become disengaged.
Offering training programs in the workplace helps employees feel like their work is aligned to the overall corporate mission and goals. By continuing to provide opportunities for employees to develop new skills and capabilities, they will not just become better workers, but will feel like more productive members of the organisation – improving both morale and productivity.
This blog only presents top-level results from one section of the ELMO 2021 HR Industry Benchmark Report. If you’d like a comprehensive overview of HR and payroll trends, challenges, use of metrics and technology, download your report today. The HR Industry Benchmark Report provides in-depth insights into the current state of end-to-end HR processes, including recruitment and onboarding, learning & development, performance management, and more. Data in our report is split by company size, geography (Australia / New Zealand), role seniority, and industry^ – enabling you to benchmark your current HR practices against your peers.
HROnboard, an ELMO company, offers a best-in-class software solution that reduces the amount of time HR teams and leaders spend securing the best candidates and undertaking the critical onboarding process for new hires. Our solution also helps manage internal employee role changes and can create a smooth and seamless process for exiting employees. To find out more, reach us here.
ELMO Software offers people, pay and process solutions for the entire employee lifecycle, from ‘hire to retire’. This includes recruitment, learning, performance management, payroll, rostering / time & attendance, expense management, and more. For further information, contact us.