Develop Your Employees: All Else Will Follow

Talent Management Magazine’s Associate Editor Frank Kalman recently reported (October 15, 2013) on a study done by global human resources services firm Towers Watson, which indicated that:

• Only about one third of the employees in U.S. corporations know how they can advance their careers
• Less than half of employees are able to advance in their careers

Kalman goes on to point out that “the survey’s findings are especially alarming considering the prospect of continued development is the reason many people join companies to begin with, while the lack of career advancement once they join is among the top reasons people leave.”

Since the cost of replacing an employee who leaves is far greater than the cost of retaining existing employees, looking into some of the causes of this problem might be beneficial.

Kalman cites Laura Sejen, global leader of rewards at Towers Watson, saying that:

• Managers are not effective in providing career management support to their employees
• The benefits of focusing on employee development far outweigh the costs

While Talent Management magazine tends to focus on larger corporations rather than small businesses, there is an important lesson which we can learn from the study: focus on developing your employees.

As a manager in large business, I always focused first on developing my employees.  My informal motto was Develop Your Employees: All Else Will Follow.  Whenever I began a new project or thought about moving into a new area, I first asked myself, “How can this be used to develop my team?”  I would recommend that small business owners adopt this motto as well.  By doing this, you will keep employees engaged, perhaps lessen the risk of your most valued employees leaving the business, and prevent boredom (which can lead to errors and lower quality work).

While skill development is very important to many high-quality employees, developing skills alone does not lead to guaranteed employee retention.   As employee skills develop, you may be able to take on more business, make more money and consequently increase the compensation for your employees.  You may be able to grow the business and make today’s trainees into tomorrow’s team leaders.  You might also consider succession plans for your business.  Perhaps, as part of your compensation plan, over time you might want to gift or sell part of your business to your employees, ultimately leading to possible lifetime loyalty from the employees at little cost to you.

Even with all of the above development activity, employees may still decide to leave and potentially become your competition by working for someone else or by deciding to go into business for themselves.  I’ve heard some people say they don’t want to teach their employees too much because they may be training the competition.   This is a genuine possibility, thus, on a daily basis each of us needs to work on increasing our employee loyalty.  If we do this correctly, we should be able to be the most profitable business in town, and consequently pay the highest wages.   If we make our employees into business partners and maintain a friendly environment, there would be much less of a motivation to leave to start one’s own business.      True, some employees will leave due to family reasons for moving out of state, but if you have built a trusting relationship with your employees, they are more likely to share their intent months, if not years in advance so that you will be able to plan a more logical transition to training new employees rather than discovering yourself shorthanded at the busiest time of the year.

Special thanks to Margarita Posada Cossuto for helpful comments.

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