So, you want to create an employee development plan. You’ve come to the right resource! Employee development plans are fantastic for strengthening both the individual members of your team and your company overall. In this article, we’ll review the business case for employee development plans, highlight the many kinds of employee development opportunities that exist, and share a four-step process to design your own employee development plan, complete with a downloadable template to make the process as simple as possible.
The Impact of Employee Development
Employee development plans benefit not only individual employees, but companies as well. Organizations that support employee development plans are able to retain and continually improve their existing talent. The benefits arise logically: when a company invests in the employee, they invest in a functional component of their organization. In a happy win-win situation, both parties benefit from the company’s willingness to make an upfront investment that delivers long-term returns.
Still, to some employers, the relationship between investment and the subsequent payoff feels vague. What exactly are the specific mechanisms and metrics we can point to as evidence of how employee development plans impact an organization?
Below are three of the most compelling reasons that employers should invest in employee development plans, supported by empirical evidence:
1. Reduced Turnover
One of the biggest ways that employee development plans benefit your business is by reducing the likelihood that existing employees will leave your company (i.e. turnover). According to SHRM, 41% of employees at companies with weak or non-existent employee development plans say they will leave the company within the year, compared with only 12% of employees at organizations with exceptional employee development plans. Another report found that almost all employees — 94% to be exact — say they would stay at a company longer if it invested in their professional growth.
Companies already make many investments in their employees, beginning with recruitment and followed by onboarding, training, and the slow accumulation of institutional knowledge. This knowledge cannot be quickly replaced in a new hire, and the amount of time, money, and effort a company puts forth toward any employee can become more efficient with the addition of an employee development plan. When companies retain employees, these investments pay their returns.
Finally, higher retention can also improve morale. Constant turnover creates an unsettling air of impermanence and makes it difficult for employees to form lasting, meaningful relationships with their peers.
2. Better Organizational Efficiency
Employee development plans also benefit your business by improving the way your organization operates. By strengthening the company’s individual components — in this case, your people — employee development plans help the entire machine run more smoothly.
One study looked at companies distinguished by what researchers described as a strong “coaching culture.” They used the term to refer to organizations where individualized training plans were common. The study found that coaching cultures yield 70% higher productivity and 81% better overall team functioning. Researchers also noted advantages in more specific areas, including a 67% faster onboarding timeline and 71% faster response time from leadership.
3. Increased Profits
Finally, it should come as no surprise that companies that invest in employee development plans see increased profits in the long-term. One study looked at outcomes for companies that made a significant investment in employee development plans (defined as more than $5,000 per employee per year), as well as companies that made smaller investments (less than $1,500 per employee per year).
Although the outcomes were more drastic at organizations that made a larger investment, the study still uncovered sizable returns, even for organizations with relatively minimal spend. Some of the most compelling findings included:
- Higher Revenue
- Low-investment companies saw 85.3% higher revenue
- High-investment companies saw 104.9% higher revenue
- Higher Rate of Attaining Quota
- Low-investment companies saw a 55% increase in employees reaching their quotas
- High-investment companies saw a 57.4% increase in employees reaching their quotas
- Higher Win-Rate
- Low-investment companies saw a 46.1% improvement in win-rate
- High-investment companies saw a 51.4% improvement in win-rate
It’s encouraging to see that even a small financial investment in employee development positively impacts the bottom line.
Not only do employee development plans make sense from a business standpoint, but they also help employees feel supported at work. In fact, employee development plans are one of the clearest ways for a company to send the message they’re rooting for their people’s success. When employees feel like their colleagues are working for them, becoming continually better versions of themselves is simply a matter of swimming with the current.
Types of Employee Development Plans
Clearly, employee development plans have major benefits. Now, let’s dig into what they look like in practice.
To start, let’s address the many shapes and sizes employee development plans come in. Whereas some employee development opportunities will be extremely role-specific (e.g. learning how to use a certain software or operate a particular piece of machinery), others will address more broadly applicable professional strengths like communication and leadership abilities. Both are important and beneficial.
The opportunities you choose to include in your employee development plans will, of course, be specific to the individual and their unique skills and goals.
That said, understanding the most popular employee development plans can offer a useful starting point, especially when working with employees who know that they want to generally improve themselves but perhaps need guidance and direction.
One study asked nearly 40,000 employees what kinds of professional development opportunities they would be most interested in. By far, leadership training and professional certifications were the most popular options, comprising a combined 62% of all responses. Diversity and inclusion training and communication/public speaking courses fell to the bottom of the list. Note that the lower placement of these options doesn’t signify that they are unimportant, nor does the predominance of the most popular options indicate they’re the most important. Rather, these are the opportunities employees will opt for of their own volition, which is useful to understand.
For example, if one employee’s high-level goal is to become a manager, they’ll probably say that leadership and management training is the most important thing to include in their employee development plans. However, what they might not realize is that effective managers need to be well-versed in diversity and inclusion best practices, which requires much more formal education than many people realize. Knowing that this type of opportunity tends to fall to the bottom of the list can be helpful because you can guide these aspiring managers in the right direction.
Below is the complete list of preferred employee development opportunities from the study, with the percentage of respondents who selected each program type indicated in parentheses.
- Management/leadership training (32%)
- Professional certification (30%)
- Technical skills training (17%)
- Teamwork/interpersonal skills training (8%)
- Employer-subsidized degree (7%)
- Communication/public speaking (4%)
- Diversity and inclusion training (2%)
Use this list both as a guide to understand which opportunities employees find most appealing, and also to inform your recommendations about what learning opportunities to include in a well-rounded employee development plan.
Creating an Employee Development Plan
We’ve laid the groundwork, and now it’s time to discuss the process of actually creating an effective employee development plan. The one we’re sharing today has four major steps that each leave plenty of room for individualization and adjustment depending on your employee’s specific needs.
Read through the details of these four steps to employee development. After that, download the template below and fill it out with the employee(s) you have in mind.
1. Set Goals
The first thing to consider when creating an employee development plan is major goals or milestones the employee has in mind. This gives your employee development plan an important sense of direction with which you can align the more granular components.
Goals in your employee development plan should be high-level and fairly ambitious. Setting challenging goals makes fulfilling them more satisfying and pushes your employees to reach beyond their comfort zones.
One example of a goal that could be included in an employee development plan would be landing a promotion and more senior job title. It’s lofty without being unrealistic, and it’s a big enough accomplishment that the employee will likely be motivated to put in significant effort to bring it to fruition. We’ll continue to use this example as we move through the next three steps so you can see how it might be broken out into an actionable employee development plan.
A final tip on the goal-setting step: the best employee development plans also consider the goals of the company. Ideally, the two should align and support one another. Employee development plans can be an excellent way to support your existing talent and also address the skills gap that many recruiting professionals struggle with. This is key to ensuring that employee development plans are symbiotic in practice.
2. Outline Objectives
With goals in mind, you can outline objectives that support bringing those goals to life. Like goals, objectives are still high-level. However, they are more actionable and ideally measurable. Goals can be tied to awards, titles, and honors, whereas objectives need to be a specified milestone that the employee can measure as they get closer to their goals.
Let’s use the previous example of an employee who wants a promotion. Maybe you decide that to position themselves to earn one, they should improve their annual performance by 30% compared to the previous year. Depending on the role, the specifics of what improved performance looks like may vary, but the point is to select an achievable outcome that ties directly back to the goal. Objectives should answer the question, “What is the employee going to accomplish?” without getting distracted with the details of how they’re going to accomplish it. Identifying those details is the next step.
3. Plan Actions
Actions will be the most granular component of your employee development plan. It’s the courses, certifications, speaking engagements, etc. that the employee will complete to bring their objectives and, subsequently, goals, to life. Each objective will probably need several actions, and the more detailed you can get about planning them, the easier it will be for your employees to stay on track.
Keeping with the same example of the employee pursuing the promotion, action steps might look like taking an online learning course, obtaining new professional certifications, or reading a book.
This step of creating an employee development plan is where it becomes important to specify timelines. Timelines ensure employees are moving toward their goals at a reasonable pace and increase accountability by specifying completion dates for each of the action steps.
4. Establish Ways to Provide Feedback
The last step of your employee development plan (besides actually executing it) is ensuring employees regularly check in and receive feedback about how they’re pacing along with the original plan.
In the template, you’ll find space for planned versus actuals of the employee development plan. At each major milestone, set aside time for the employee and their manager to discuss the actual outcomes that resulted from the actions outlined. It’s okay for timelines to evolve as the plan unfolds, but try to refrain from changing objectives — and, more importantly, goals — as much as possible.
In addition to these defined checkpoints, employees will be better equipped to succeed in their employee development plans if they receive regular performance feedback from their managers. That means recurring check-ins, meaningful recognition for the things they’re doing right, and real-time communication about the areas they could improve.
By outlining the answer to each of these four criteria, you can create a clear path toward employees’ goals and effectively track progress.
Download the Template
The template below lays the groundwork for the steps outlined above. Download it and fill it out with the employee(s) you have in mind.
The Secret to Success: Culture
Finally, keep in mind that you can have the best and most thoughtfully developed employee development plan in all the world, but if your culture doesn’t promote growth, employees will have difficulty pursuing their goals.
Alternatively, if your company supports a culture of feedback and recognition, you’ve already established many of the environmental factors that help your employee development plan succeed. Key strategies for facilitating this kind of culture include company-sponsored employee recognition programs, regular check-ins with managers, and transparent communication from the company’s most senior leadership.
In the end, there’s a myriad of factors that must be in place to support employee development effectively. The good news is that each one benefits both your business and your people. Investing in employee development is one of the smartest decisions you can make.
Katerina Mery is a Marketing Specialist at Fond with a background in cognitive psychology and a passion for improving the way people live and work. She especially enjoys learning about how to accomplish this through rewards and recognition. In her spare time, you can find Katerina running outside, admiring art, and exploring the latest and greatest local restaurants.