This post about the importance of employee development was originally published in September 2021 and updated in November 2024 with new data and information.
Did you know employers believe that 44% of employees’ skills will be disrupted in the next five years? They also said that six in ten employees will need training by 2027, according to research from the World Economic Forum. As the workplace is disrupted by new technologies like artificial intelligence (AI), now is the time to invest in employee development — or risk getting left behind as your competition grows.
Though it may be driven by the urgent demand for upskilling and reskilling, that’s not the only reason to develop your people. Employee development programs also:
- Simplify employee training and provide clear avenues for career advancement
- Motivate and engage your employees
- Stand out to job seekers and candidates
- Enable new hires to envision a long career at your company
- Help save on hiring costs by training current employees to fill skill gaps
- Prepare future company leaders
- Influence company culture and how work gets done
Unfortunately, learning opportunities are lacking for a majority of workers. Only 25% of employees say their company’s learning and development (L&D) program actually helps fill skills gaps. Meanwhile, 83% of HR professionals say they’re having difficulty hiring employees with the right skills. It’s clear that there’s a need for more effective development programs.
Let’s dig into the benefits of developing your employees to understand why it’s such an essential component of talent management.
What Is Employee Development?
Employee development refers to the strategic process by which employers help employees refine and expand their skill sets, knowledge, and abilities to support both individual career growth and company goals. It’s a continuous process that can include, but goes beyond, basic job training. Development initiatives aim to equip employees with new capabilities that serve them throughout their careers, not just in their current roles.
Employee training and development are mutually beneficial. It’s about helping employees reach their full potential, which, in turn, strengthens the entire organization. The key components of effective employee development programs include:
- Skill-Building: Skill-building is targeted training designed to help improve employees’ skills or teach new skills relevant to their roles. Examples include technical training, project management workshops, or mastering a new software tool.
- Professional Growth: Professional growth efforts are designed to support employees’ career development plans. These often include soft skills training, like communication skills and critical thinking, that prepare employees for more complex responsibilities and roles.
- Leadership Training: Fostering your high-potential team members’ leadership skills can lead to long-term loyalty. Leadership training can include mentoring, team management, and strategic planning — essential skills for supervisory roles.
7 Reasons Why Employee Development is Important
Investing in employee development isn't just a supportive perk — it's a strategic move. Nurturing employees’ skills and knowledge empowers your people to do their best and rise to new challenges. It boosts employee productivity and resilience and helps you retain top talent.
Beyond that, L&D strengthens talent pipelines and enriches company culture. Let’s dig into the top reasons why your organization should invest in employee development.
1. Strengthen Employer Brand and Appeal to Job Seekers
Investing in employee development doesn’t just help your team grow — it strengthens your employer brand and makes your company stand out to today’s job seekers. Gone are the days when a few flashy perks were enough to attract top talent. Now, candidates, especially Millennials and Gen Z, want something more meaningful. They’re looking for employers who are committed to their growth and offer real opportunities to learn and advance.
Employee development statistics show that 90% of Millennials say growth opportunities are a top priority when they’re choosing a job. Even more compelling, 86% of employees would consider switching jobs if it meant more chances to learn new skills. These numbers highlight a clear trend: most people in today’s workforce aren’t just open to growth — they’re actively seeking it out.
Show candidates that your organization is serious about employee development from their first interaction with your company. Mention development initiatives in job descriptions to attract candidates who are looking to grow in their next position. Encourage hiring managers to discuss learning and internal mobility during the interview process.
Offering structured growth paths and skill-building programs sets your company apart, showing candidates that you’re an organization that cares about their future and values their contributions. This investment builds a reputation that attracts talented, ambitious individuals who want to work — and stay — with a company that supports them.
2. Engage New Hires During Onboarding
Onboarding is the time to live up to your promises during recruitment and show your new hires you’re serious about their career development. Make growth part of the onboarding process to reiterate the importance of employee development and back up your employer brand.
Your organization can implement critical elements of professional development during onboarding:
- Employee training: Even required employee training is an opportunity to reinforce your company’s learning culture. During standard training, new hires can get comfortable using your learning management system (LMS) and the different options for courses, course materials, and development paths.
- Mentorship program: Retention rates for mentees are as high as 72%. Pairing new hires with a mentor has numerous benefits. It helps new hires feel welcome and gives them a space to explore their career goals. Mentoring programs also offer experienced employees a chance to share their expertise and foster future company leaders.
- Goal-setting: Set goals large and small with new hires during onboarding. Work with new hires to determine what they need and want to accomplish in the next few weeks, months, and years. Upfront goal-setting eliminates confusion about what is expected of employees in the near future. It also makes it easier to take steps toward accomplishing their larger goals.
- Employee engagement: Encourage mutual feedback between employees and the company right away with an engagement survey after onboarding. Send an anonymous survey to groups of employees onboarded around the same time to gauge the effectiveness of the onboarding process.
3. Reduce Turnover, Especially Among Younger Workers
Did you know that retention rates are as much as 34% higher when companies offer development opportunities? On top of that, a staggering 94% of workers said that if a company invested in their learning and development, they would stay there longer. And when we look at Gen Z alone, 53% agree that through learning, they can explore career paths at their companies. These stats highlight a clear trend: development is a major factor in keeping employees, especially younger workers, engaged and committed.
To support retention, your company can make continuing education a priority. Actively encourage employees to take advantage of learning opportunities — whether that’s attending industry conferences, enrolling in skills training, or pursuing new certifications. Consider setting aside an annual budget for each department to cover these growth-oriented activities or invest in an LMS for managing your L&D program. Providing dedicated resources shows employees that you care about their future and are willing to invest in their success.
Another effective strategy is to create strengths-based development paths. Ask employees about their skills and what areas they’d like to develop, and then help them sharpen those strengths further. Research by Gallup shows that employees who know and use their strengths are six times more likely to be engaged at work. Focus on their unique strengths to help them improve and give them a stronger sense of purpose and belonging within your company.
With these kinds of development opportunities, employees are more likely to see a future with your organization — and choose to stay and grow along with it.
4. Foster a Continuous Learning Culture
Higher retention when employee development is available isn’t the only signal that people want to learn — 74% of employees said they feel they’re not reaching their full potential at work due to a lack of opportunities. There’s little doubt that there is untapped high-potential talent at your company that could drive stronger performance if given the chance to grow. A continuous learning culture encourages employees to seek out new skills, take on challenges, and ultimately become more engaged and motivated.
When your workforce consistently has access to learning and development, you’re creating an environment where growth is part of the day-to-day employee experience. Employees are more likely to set ambitious goals, collaborate, and support each other’s progress. With a focus on learning embedded in your culture, your team will be more adaptable, innovative, and ready to meet the demands of an evolving business landscape.
5. Develop Future Company Leaders
Employee development isn’t only about honing skills for current roles; it’s also about preparing employees for future opportunities at your organization. Identify and nurture high-potential talent to create a strong pipeline of future leaders who are prepared to step into key roles. Leadership development programs help build essential skills like decision-making, team management, and strategic planning, which employees can practice through:
- Mentorship and coaching opportunities
- Project ownership and responsibility
- Specialized training in leadership and management skills, like giving feedback and conflict resolution
Focus on developing internal leaders to set your company up for long-term stability and growth. Employees who see clear avenues for advancement and growth are more engaged and motivated, and as they develop their skills, they bring valuable knowledge and commitment to your team.
6. Improve Performance and Productivity
A well-executed development plan is a huge asset, not only for HR strategies but for your entire business. Research shows that learning and training programs can increase revenue by 218% per employee. When employees have opportunities to continuously upskill, they become more efficient, proactive, and effective in their roles. When you invest in their growth, you equip them with tools to handle new challenges and make meaningful contributions to the business.
Learning and development also empower employees to set higher standards for their own performance. As they expand their knowledge and learn new skills, they gain the confidence and ability to innovate and take on more complex tasks. That leads to increases in productivity, too.
7. Build Agility and Resilience
An agile, resilient workforce is a powerful asset, especially in our ever-changing business environment. Employee development programs equip your team with a diverse set of skills, making them more adaptable to new technologies, shifting demands, and unexpected challenges.
Investing in L&D sends a clear message that your company values each employee’s growth and long-term success. When people know they’re supported, they’re more willing to tackle challenges head-on and embrace new opportunities, strengthening both their confidence and their connection to your company. When your employees succeed, your business succeeds.
Why You Need Software for Employee Development
Employee development becomes a natural, seamless part of the employee experience when you use a talent management system. A robust software solution centralizes essential tools and processes, making it easier to set up, track, and refine employee development plans. With the right system in place, employees can take charge of their growth journey, and HR and managers can easily monitor and support each step.
Here’s how key features of talent management software strengthen employee development programs:
- Learning Management System (LMS): An LMS provides a one-stop hub for employee training, offering easy access to courses, certifications, and self-paced learning resources. With an LMS, you can create a structured learning pathway that keeps employees engaged and progressing toward their development goals.
- 360 Reviews: 360-degree reviews use feedback from managers, peers, and direct reports to assess employee performance from multiple perspectives. This holistic approach helps employees better understand their strengths and uncover areas where they can grow, promoting well-rounded development.
- Goal Planning & Alignment: Goal-setting tools make it easy to create goals that align individual and company objectives. Employees receive regular reminders and progress updates, keeping them on track and informed, while HR and managers can monitor milestones and adjust support as needed.
- Employee Engagement Surveys: Anonymous engagement surveys give employees a voice, allowing them to share honest feedback about their roles and the company. Surveys provide HR with insights into development needs and gauge the effectiveness of existing strategies, helping teams make adjustments for even better results.
Using talent management software simplifies the entire development process, creating a streamlined experience for both employees and HR. When employee development is built into the software they’re already using, your team is empowered to take control of their growth, and your company gains a workforce that’s continuously learning and improving.
A unified Talent Management System treats learning and development as an integral part of the employee experience. With an all-in-one platform like ClearCompany, development becomes part of every HR function, from hiring to promotions:
- Identify Skills Gaps: Determine which skills need to be hired for and which can be developed internally.
- Source Candidates by Skills: Find both skilled workers and those with the potential to grow and learn.
- Standardize Onboarding: Ensure compliance and efficiency in onboarding with personalized goal-setting and manager check-ins.
- Create Custom Career Paths: Build career paths based on individual employees’ strengths, personal goals, and business objectives.
- Deliver Diverse Training Materials: Offer materials in multiple formats to suit different learning styles.
- Analyze Performance Data: Spot effective development strategies, high-potential employees, and areas for improvement.
Talent management software like ClearCompany makes employee development an embedded part of your organization’s culture for a thriving workforce.
Interested in getting these results at your organization? Sign up for a demo of ClearCompany’s Talent Management System.
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