According to a recent talent perception insight survey, investment in an employee’s development and a clear path for career advancement remain a top priority for talent in the UK. Failure to satisfy these essentials are often one of the main drivers for employees resigning. However, investment in career development has been over looked in recent year. Admittedly, the pandemic has played a key role as organisations faced major disruption, and focus turned to ensuring businesses and employees could effectively work from home.
For employees this meant that conversations around career development and training have been put on hold. And while employees have been largely understating of the exceptional circumstances, this understanding is now starting to wane.
Addressing the need for a renewed focus on career development
Development opportunities are of extreme importance to employees. In fact, a lack of growth and development opportunities is the second highest reason why people leave and has seen an increase of 170% since 2010.
Before too long, an organisations failure to invest in career development will have serious implications. Employees will disengage and ultimately leave – something that no business, especially those already reporting skills shortages, can afford.
The strongest talent does not want to place their career ambitions on hold a moment longer. Unless organisations can make a concerted effort to help them achieve their career development aspirations, many may well look to quickly move elsewhere.
The risk of not investing in career development
Given the cost of replacing an employee, can an organisation afford not to invest in career development? It is widely accepted that the cost of replacing an employee is equal to the annual salary of the role – all to effectively be in the same position you started in. This is a culmination of multiple factors including: three months’ salary paid when they hand in their notice, recruitment costs for the new role at 20% of the new starter salary, three months’ worth of onboarding and additional IT, HR and administration resource.
The true cost to replace someone on £50k salary
• Cost of loss of productivity during notice period following resignation – £12.5k People will move on, but you can make the best of their time at your organisation.
• Recruitment costs for replacement – £10k
• Onboarding costs while employee gets up to speed – £12.5k
• Additional IT, HR and admin resource – £3k
• Loss of knowledge of departing employee – incalculable
When you then factor in the added implications of an employee leaving the business such as lost knowledge, impact on stakeholder relationships and the time taken before they become truly productive – all of which are legitimate considerations – the real financial and productivity burden on organisations is clear.
Considering these benefits and risks as a whole it is easy to see why an investment in career development is vital to the success of your business. Holding on to your people and investing in their careers becomes a must if businesses are to avoid a mass exodus of employees, driven by a refusal to put their career aspirations on hold any longer.
INTOO’s latest guide to career development, provides detailed practical advice on how organisations, managers and employees can work together to bring career development to the forefront of your people strategy in order to drive business success – reaping the rewards at individual, team and organisation-wide level.
Download your copy of our Career Development guide – ‘The Silver Bullet to Employee Attraction, Retention & Engagement’ by clicking on the button below.