INDUSTRY FACT: Growing your people grows your revenue
If you want to grow your business, you need to grow your people. This isn’t just a motivational quote – it’s a proven strategy of the world’s most successful businesses.
“Workforce 2020” – a study by Oxford Economics – found that companies with above-average revenue growth prioritized their workforce development and created a culture of learning (Forbes). They offered advanced training programs and formal mentoring programs, and then used a merit system to promote from within the ranks.
Above all, high-performing companies recognize the importance of investing in future leadership. They don’t take the leadership skills of their people for granted. “Armed with a more forward-looking plan, it may be that high performers are more self-critical of their leadership shortcomings. And, in making room for workforce issues at the strategy table, high performers will be better prepared to meet future workforce needs.”
Here are three reasons that investing in your team’s development will help your company’s bottom line.
1. People development leads to higher productivity
The money you put in your people pays off a lot more than the money you put in machines. A study by the National Center on the Educational Quality of the Workforce found that when companies increased training by 10%, overall productivity increased by 8.6%. But when they invested the same amount in mere equipment, productivity increased by just 3.4%.
It makes sense: better skills lead to better results. But the most effective programs go beyond technical workshops and modules. There’s a shift from training to learning, technical skills to whole-person development, and individual performance to team thinking and collaboration.
According to Forbes’ article “Six Learning And Development Trends To Embrace For Maximum ROI”, organization-wide development elevates “the leadership capacity of every person in the organization, setting employees up to be successful as leaders, not just as employees. People are empowered to find their own answers and leaders are no longer the bottleneck in getting things done.”
A learning and leadership culture also drives innovation, since it encourages employees to share ideas, take more risks and embrace change. According to an IBM C-Suite study that analyzed conversations with 4,183 leaders in 70 countries, “Organizations that are significantly outperforming their industry peers also happen to be making more headway on newer approaches to work. They are using dynamic, collaborative and connected ways of working to get things done effectively within a constantly changing environment.”
The study report claims that learning can have a huge impact in every stakeholder relationship and business process, including:
16% increase in customer satisfaction
$70,000 in annual savings for a seven-person team and a 10% increase in productivity
22% faster rollouts of products and processes
IBM also noted that programs geared towards developing a team mindset – where team members learned together and knew how to work better together – dramatically increased their ability to meet deadlines and business goals. “Increasing team skills by 1/3 increases likelihood of stakeholders meeting their objectives from 10% to 100%.”
2. People development increases engagement and innovation
Addressing employee engagement is becoming increasingly important for organizations. Research by Deloitte shows that issues of retention and engagement now pose the second biggest challenge in the minds of business leaders. According to Josh Bersin, one way organizations can increase engagement is by creating growth opportunities for their employees. Organizations with a strong learning culture have engagement and retention rates that are 30-50% higher.
Engaged employees are not only happier but also more productive. “Engaged employees are excited about their future and continued growth,” says Lisa Whealon, chief people officer at GI group. “In fact, highly engaged employees are 38% more likely to have above-average productivity. They think carefully about how they’re doing their work, leading to continually improved processes and increased efficiency.”
And when employees are engaged, great things can happen. “Employee engagement assumes a critical precursor role to creativity and innovation at the workplace,” says a study presented at the Asia Pacific Institute of Advanced Research (APIAR). ”Without engagement, any attempt at innovation is anemic.” According to Bersin, organizations with a strong learning culture are “92% more likely to develop novel products and processes.”
3. People development helps you retain your best employees
Many companies are wary of investing in employees who will eventually leave the company for greener pastures. However, studies show a strong link between people development and retention. According to employee retention statistics, 70% of respondents say that training and development opportunities influenced their decision to stay with a company.
The number is higher for the millennial workforce. According to HR Daily Advisor, 63% look for jobs where they have access to skills training, and 55% look for leadership training and opportunities. They also crave continuous feedback and monitoring, with 41% hoping that they get it on a weekly basis.
IBM”s study reinforces how employees want to feel that the company’s goals are aligned with their own personal goals. They want to grow, and if an organization can’t help them do this, they will find another that will. “Employees who do not feel they can achieve their career goals at their current organization are 12 times more likely to consider leaving than employees who do feel they can achieve their career goals. This number skyrockets to about 30 times for new employees.”
And according to IBM, the cost of hiring someone new far exceeds the cost of investing in their learning. “The costs of replacement can reach 200% of an employee’s annual salary.”
Grow facilitates team development
Grow helps teams develop a culture of growth so that they can perform better and become more productive. A culture of growth takes both reflection and action. First, teams work to become more self-aware, both as individuals and on a collective level. This involves individual and team self-reflection, as well as getting feedback from others. Second, teams take action by setting personal and team development goals and by producing a plan to achieve those goals. By checking in regularly on progress, teams are able to make development and learning an ongoing activity.
Grow provides teams with the tools and guidance they need to establish a culture of growth. Teams can access Grow’s tools and resources from within a common team space. Each team member also has a personal development space, where they can access tools and resources just for them.
Rudi Ramin, CEO of Grow, describes what a culture of growth looks like. “Teams that learn to grow are not only successful, but also fulfilling for team members. Everyone takes ownership of their team and shares accountability for team results. They collaborate effectively, communicating information, maintaining a safe environment for the exchange of ideas, and addressing conflict effectively as it arises.”
To find out more about Grow, schedule a demo today.