This is a repost of a previous blog from The Icehouse in 2016. As relevant now as it was then, the points raised address today’s challenges around skills and talent shortages, and how to attract, develop and retain the right people.
The average cost of replacing a person accounts for just over 20% of that grade’s annual salary and, according to the US Bureau of Labor Statistics, the average lifespan for an employee at a company is 4.4 years. That number is dwindling each year, and is much less for employees under 30 years of age...
Without a doubt, the culture of developing people has become increasingly essential within the professional world. Businesses and employers alike are becoming all too acquainted with the ‘sting’ when an employee departs from an organisation; whether this be the projects that are left behind or the skills that go with them.
Nowadays, the harsh truth is that people aren’t staying in jobs for as long as they used to. Companies are spending lots of time recruiting with staff turnover being a real pain point. But for many employers, this is an issue that can be easily dealt with.
The new generation are after constant advancement. They’re not looking to necessarily leave the business, but they are looking to advance their own personal set of skills. And in many cases, the main reason these employees are fleeing their employer is because they don’t feel invested in - so the question stands: do you have professional development plans in place for your staff.
Staying relevant for employees
Today, what we’re seeing in the professional world is a requirement for businesses to stay relevant to their employees. Whereas, in the past, it’s more or less been the other way around. This comes down to the vast difference generationally. Different generations have different demands and, in a sense, values.
It’s therefore imperative for businesses to not only understand this but know how to become more relevant to their employees. Having a solid and clear succession plan in place is one of the key ways you can achieve this – if you’re in a business that’s planning for growth, you want to be enabling the people within your business to grow with your business.
At the end of the day, it’s about creating an environment whereby good people can achieve great things. Developing your people enables the future growth of the business and succession within the business, but it also allows individuals to steadily grow and transition into their next role.
When is a risk not a risk?
A lot of business owners worry that if they develop the people within their business too much, they’ll leave. Yes, this is a risk, but it is often not the case. There are all sorts of repercussions your business could face if your employees are left out in the cold (so to speak). Underperformance, demoralisation, boredom, lack of productivity are just some of these; and it comes down to one main factor that can quickly cause them to look elsewhere: neglect.
An employee’s capacity to perform is impacted through two different planes – their capacity to perform based around their competencies, and their desire to perform. If you have a competent person who is unmotivated to perform, then they’re only going to perform to a certain level. Naturally, the likelihood of a demotivated employee performing to their full potential is slim. The key, however, is to instil this sense of motivation. A Professional Development Plan embeds a real sense of value and worth within an employee which addresses their own questions of “does this business really appreciate me?”
If you’re developing your people, they will consistently perform rather than stew on the “what else is out there for me?” questions. For any business, it comes back to productivity and innovation. If your employees are productive and innovative, their creativity expands, their ability to think beyond what they’re currently doing in their day-to-day lives increases, and it also brings new insights into the business. And these are only some of the additional spin offs that comes from keeping your people.
Driving a people culture
But why not just give your employees a pay rise? Isn’t that motivation enough? Motivation, much like everything else, is 100% subjective. It varies between employees. What drives one employee, may not drive another. But, what you should always be cautious of is that there is always someone out there who can and will pay them more. It might be that you’re in the pay range, but people don’t leave businesses necessarily around pay.
People leave their managers, they leave their leaders; and they leave their leaders because they feel undervalued - they don’t feel invested in, they don’t believe that there is a future for them or a career path within the business. In some instances, that may well be the case. But then there is also the all too common case where the business hasn’t articulated what the future growth plans are, and better yet, the longer term plans and where the individual fits into the business.
Developing your people isn’t all about furthering their skills, it’s also about bringing them on the journey around where you’re planning on taking your business as well and how they fit into the grand scheme of things.
Leadership is absolutely essential within this scheme. While it’s critical for management positions or positions you look to as an advocate for particular areas of the business, leadership is not solely reserved for people managers. Leadership can come from multiple areas.
It drives the cultural ethos within the business – so the feel and personality of your business is critical to what you’re delivering to customers and your staff. If you have a good basis for leadership within your business, and your leaders are on par with your goals, then your business will ultimately be successful.
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