The ROI of Investments in Professional Development
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In my first job in the corporate world, I lived for professional development days. I love learning, and the chance to learn something new or hone a skill on company time seemed too good to be true. But what I didn’t know back then is that professional development is not just a great employee perk, it’s also a smart business strategy for increasing employee productivity and company profits.
The first writings on professional development date back to the late 1800s, but the concept was popularized in the 1960s in the education field. Today, we recognize professional development as either leadership or management training, or the deepening of specialized skills that help us do our work better. Sometimes, it’s both.
When HR departments and business leaders consider professional development (PD) programs, there are a wide variety of options to choose from. In-person seminars, offsite trainings, individual self-paced learning programs, and online group sessions. According to the Society for Human Resource Management (SHRM), memberships in professional organizations, workplace trainings, and offsite programs are the most common types of PD.
Recently, tuition reimbursement programs have become more popular with one survey showing that an average of 50% of employees have access to that perk. (Tuition reimbursements also offer the employer the added bonus of a tax write-off of up to $5,250 per employee.)
There is no set formula for a winning PD strategy, so it often comes down to budget. But how do businesses know that their investment in PD is going to pay off in more than just a write-off? The statistics speak for themselves…
- It costs an average of $4,000 to hire a new employee.
- It takes almost 2 months to fill an open position, and between 20-26 weeks to onboard them.
- And yet, the annual turnover rate in the US is about 20%, or 1 out of 5 of all employees. That means in a company of 20 employees, you should expect 4 of them to leave every year!
- What’s the cost of turnover? A whopping 6-9 months of an employee’s salary!
So how do you break the cycle and beat the odds? You guessed it: professional development perks.
According to SHRM, nearly half of all businesses cite professional development and training as their most effective tool when it comes to talent recruitment. One survey noted that “employees with access to professional development were 15 percent more engaged in their jobs, which led to a 34 percent higher retention rate. This means those employees are not only more productive day to day, but less likely to leave their positions.”
If your employees tend to be Millennials, professional development couldn’t be more critical. 87% of Millennials say it’s important to have their employer offer professional growth opportunities – and that access influences whether or not they’ll stay at a job. Regardless of the generation in question, employees simply feel more engaged when their employers invest in their growth and development.
And why wouldn’t they? For most of us, it’s baked in to try harder when others demonstrate they are fully committed to us as individuals. It’s reciprocity at work – if our employer fully commits to us, not just as workers but as people, we are more likely to fully commit to them. A recent study by Dale Carnegie reveals that companies with fully engaged employees outperform their counterparts by 202% — that’s a factoid HR managers cannot ignore.
If you’re a startup, a virtual company, or a small business owner, you might wonder where to start, especially if you feel you don’t have a big budget for PD. But impact investments in people don’t have to cost you big. Here are a few ideas that won’t break the bank:
- Let your rockstars shine. If you have a technical rockstar on your team, ask her if she would be willing to hold a live or online training on a particular platform or tool your company uses. We’re a virtual team at Blue Fox, and when we launched Hive internally, we held two hour-and-a-half long trainings via web conference to familiarize and train the team on Hive. For me, it was a no-brainer to ask the team member who implemented Hive to lead the training and develop some cheat-sheets for the group. She was more than happy to do it, and the team’s happiness with and ability in Hive skyrocketed afterwards. A solid win-win.
- Start small. If you don’t have a big budget or a large team, consider offering a small stipend to each employee annually for professional training or education on anything they’d like. $250 can go pretty far in online courses, local seminars, and the like. You don’t have to spend thousands to provide real value to your team and show your willingness to invest in them.
- Join your local chamber of commerce or professional association. A business membership to a networking group like the chamber of commerce or a related professional association often brings with it perks like educational seminars and trainings. If you’re not sure where to start, do some Googling, search our LinkedIn/Facebook/Twitter, and ask anyone else you know locally in your industry. Even if there aren’t robust training opportunities around, the networking opportunities alone can be a huge perk for your salespeople, or your more junior team members.
If you’re a manager or an HR decision maker, professional coaching and staff development should be at the top of your list of to do’s. Especially during budget season. Investments in practical training and employee growth is arguably more important than any other infrastructure purchase you might consider. Skilled, knowledgeable leaders make for happier employees. And happier employees make for productive people and increased profits.
Lastly, on that note, here comes our shameless plug. If a member of your team could benefit from financial management or financial technology training, Blue Fox is the best in the business. Give us a call at (321) 233-3311 or shoot us an email today!