Want to motivate your employees during uncertain times? Here are three ways L&D can help.
Retaining your top talent is always critical, especially during economically trying times. As the economy and working world shift, Harvard Business Review (HBR) says employee-centered learning and training are essential to retaining your people — and research backs this up.
Studies like Gallup’s meta-analysis show that Learning & Development (L&D) is a critical and profitable investment. Teams that receive strengths-based development achieve 19% increased sales, 29% higher profits, and up to 72% less turnover. By investing in L&D, Sayge has received a +69 average satisfaction Net Promoter Score (NPS) compared to the L&D average of -8.
3 Reasons to Invest in L&D in 2024
Data shows that by investing in L&D, companies can minimize the cost of turnover, poor management, and poor employee wellbeing. Let’s look at each of these in more detail.
1. Reduce the cost of employee turnover
Estimates show that it costs companies one-half to two times an exiting employee’s annual salary to replace them. During uncertain economic times, this is not in the budget. The good news is that L&D can help retain people and attract new talent. In fact, at one company, employees who received Sayge Coaching reported 20% higher retention rates than the overall employee population.
Additionally, according to a 2021 Gallup survey, younger workers are drawn to jobs with skills training. Workers aged 18-24 ranked learning new skills as the third-most important perk, behind only health insurance and disability benefits. On top of that, when surveying U.S. employees of all ages, 71% of respondents said job training and development increase their job satisfaction.
As a sought-after employee benefit, upskilling and reskilling can help you attract and retain talent, minimizing the cost of voluntary employee departure. And the employees you keep can apply their new skills to help drive innovation and growth.
2. Minimize the cost of ineffective management
Managers need proper training to engage their teams. Poor management leads to low productivity, poor morale, and quiet quitting (i.e., employees who fulfill their primary responsibilities but do the bare minimum). “Many people, at some point in their career, have worked for a manager that moved them toward quiet quitting,” explains HBR, “This comes from feeling undervalued and unappreciated.”
Fortunately, manager training and development can make a significant difference in quiet quitting rates. Zenger Folkman analysts found that while the least effective managers had 14% of their direct reports fall in the “quiet quitting” category, the most effective leaders only had 3%. One Sayge Coachee said,
“Coaching has given me a perspective that I was unaware of. It allowed me to disconnect my emotional thinking from my reactions to provide the safest and happiest environment for my team. During my day-to-day interactions, coaching has [given me] confidence in myself [to] tackle any and all tasks.”
Before you cut your L&D budget, consider the financial upside of developing more effective managers through coaching. Employees want to give their time and energy to leaders who deserve it. Gallup research shows that “it takes more than a 20% pay raise to lure most employees away from a manager who engages them, and next to nothing to poach most disengaged workers.” Help your leaders develop their management skills and engage their teams.
3. Decrease the cost of poor employee wellbeing
Researchers estimate that poor employee health costs U.S. employers $575 billion annually. This total accounts for expenses like lost productivity, workers’ compensation claims, disability leave, absenteeism, and presenteeism. “If you really want to increase employees’ health and well-being,” writes Jeffrey Pfeffer, Professor of Organizational Behavior at Stanford, “focus on job control and social support.”
Job control — or the amount of discretion employees have to determine what they do and how they do it — impacts physical health. Most often, employees lack job control due to micromanagement. And micromanaging, Pfeffer says, “…is all too common at work, simply because many managers are poor at coaching and facilitating others to do their jobs better.”
One Coachee mentioned how their Sayge Coach “…empowered [them] to navigate some difficult conversations with senior management regarding [their] workload.” Coaching and other L&D benefits can help employees set boundaries, improve their worklife balance, and prioritize their wellbeing. Additionally, by investing in L&D, companies can build a more highly-skilled and empowered workforce — keeping top talent engaged and not burnt out.
4 ways to Prioritize L&D During Economic Uncertainty
You may be hesitant to invest in L&D during times of uncertainty, but data shows it’s not the time to cut back. Here are four ways you can make L&D a priority at this time:
1. Always budget for L&D. When the going gets tough, how can you retain the L&D budget? Remember, your L&D budget helps develop more effective managers who can reduce the effects of quiet quitting and improve employee wellbeing.
2. Provide upskilling and reskilling opportunities. Your team is eager to grow, and growth opportunities don’t always need to cost money! Use your staff’s internal talents to create a knowledge share. These benefits attract and retain more talent, reduce attrition rates, and lower the cost of filling vacancies.
3. Conduct an engagement survey. Always understand what your people need. When companies reduce attrition rates, they can maintain employee morale and minimize the negative impact of attrition on workplace culture.
4. Offer wellness benefits. When highly-skilled employees are empowered to solve problems, they tend to be more engaged, healthier, and not burnt out; This can reduce the cost of lost productivity, presenteeism, and absenteeism. Consider rewarding high-performing teams with wellness benefits like a day off, a meditation session, or a meeting-free day each week.
L&D is an essential investment
Far too often, companies view L&D as easy to cut, but L&D cannot be a “nice to have.” It’s essential to the wellbeing of your people and your bottom line. Before L&D ends up on the chopping block, consider the value of investing in your people. Investing in L&D reduces the cost of quiet quitting, absenteeism, and turnover and minimizes future recruitment and hiring expenses. It’s a critical investment for you and your people!
Want to learn how Sayge can amplify and support your L&D initiatives? Let’s talk.