An effective L&D strategy is essential to the company’s success
Year by year, human resource management gains in importance. It attracts more and more attention from essential staff and is part of the business strategy of an increasing number of organizations. Why? Managers know perfectly well that a properly designed training and employee development strategy are conducive to the achievement of its business goals – it allows companies to generate higher revenues, raise the level of customer satisfaction, and implement projects on time. It is also an important element of Employer Branding (EB) activities and an effective way of retaining existing talents and attracting new ones. What exactly should an effective L&D strategy contain? What role does it play in the organization?
What is the role of an L&D strategy?
An L&D strategy is nothing more than a human resources development strategy. A process aimed at equipping employees with specific competencies and skills necessary to achieve the business goals set by the organization. It is the opportunity to generate more income which is the main reason why companies are now ready to invest considerable money in the development of their employees.
This is the main reason, but of course not the only one, because the implementation of effective L&D strategies allows companies to achieve many other significant goals, including the following:
1. Acquiring new talent
Promoting a culture of continuous development, as well as offering employees many training opportunities and alternative career paths is undoubtedly an effective strategy for attracting talent. It is also an important element of EB activities, i.e. building the company’s image as an attractive workplace. And though the vast majority of HR department employees are undoubtedly fully aware of this, L&D is only used as an element of EB activities by a small number of organizations.
2. Retaining key employees in the organization
Acquiring employees with appropriate competencies undoubtedly requires considerable effort and substantial costs. Therefore, it is worth making every effort to keep them in the structures of the organization for a sufficiently long time. As almost all studies and surveys regarding the reasons for resignation from work show, the lack of professional development opportunities almost always appears as a reason for quitting and, in the vast majority of cases, it is a critical one. Bearing in mind the above-mentioned information, it is important to invest in L&D programs and LMS platforms (Learning Management System), and thus build a culture of continuous development in the company.
3. Avoiding high rotation costs
Regardless of whether an experienced essential employee or a rookie leaves the company, such a situation generates substantial costs for the organization. How high are the costs? Most often they are estimated at 1/3 of the employee’s annual salary. The amount is therefore considerable, and, what is even worse, the organization must also take into account the fact that after an employee submits a notice of termination, his or her motivation and commitment drop significantly. Replacing an employee with a new one does not result in immediately regaining the desired level of effectiveness. It takes at least a few weeks or months to become fully productive again, especially in the case of specialized positions.
4. Building foundations for dynamic growth
Scaling up business is a goal included in the business strategy of any organization. Without a competent and properly motivated team, its implementation is extremely difficult. Therefore, it is necessary to ensure that the team has a proper motivation, the opportunity to develop competencies, and appropriate tools for sharing knowledge. High rotation not only generates huge costs, but also creates a risk of losing invaluable know-how, without which dynamic development is practically impossible. Tools supporting the functioning of the HR team and the automation of HR work are crucial aspects of the rapid growth of an organization. A functional remote education platform is essential when a company begins to grow dynamically and hires a large group of new employees each month.
L&D as an opportunity to improve employee involvement
Issues related to motivating staff and building commitment among employees are also worth mentioning in the context of L&D strategies. Annual research conducted by the Gallup Institute proves to what extent the level of commitment influences the results achieved by organizations. The study clearly shows that organizations able to effectively engage their employees achieve an increase in profit per share over four times higher than companies that have problems with building commitment. Additionally, the former are characterized by higher productivity and higher employee retention. Moreover, they have a lower number of work-related accidents, lower absence count, and significantly higher profitability.
A properly designed L&D strategy is undoubtedly conducive to building employee involvement, so it is worth spending time creating it and constantly improving it. Employees will appreciate a wide range of growth opportunities at hand and the very fact that their development is of interest to the company’s management.
How to effectively shape the strategy of employee training and development?
A challenge any HR department faces is providing company management with arguments confirming that the most valuable asset of an organization is a competent and properly trained team. It is therefore extremely important to try to create an effective human capital development strategy, and also to ground it on the organization’s business strategy. Why? Because it is the plans and business goals assumed for the coming years which should determine the employee development management policy.
Creating such a policy only seems to be a simple task, but in reality it is not. Designing an effective L&D strategy requires not only proper business competencies, but also a good understanding of the organization’s business strategy and extensive knowledge of effective employee development methods. Only then can a company start designing a successful and, most importantly, tailor-made L&D strategy.
In this case, tailor-made means optimally designed for the current and future needs of an organization. A different strategy would work in the case of a company which assumes organic growth, and another in the case of an organization which plans dynamic development in the near future – taking over competitive entities or expanding to new, foreign markets. Each case would require different organizational structures, competence models, and training goals, along with varying training methods and techniques.
Of course, the creators of L&D have to face numerous more challenges. The current and target employment structure, upcoming demographic changes, or potential cultural differences should also be taken into account. It is particularly important in the case of organizations employing foreigners or operating in different locations around the world.
While company development plans can be verified in its business strategy, the demographic characteristics of employees, potential competency gaps, and training needs – not necessarily. For that purpose, it would be necessary to conduct appropriate analyses and studies in the company. An LMS, i.e. a remote education platform, can be an extremely helpful tool with regard to such tasks. With its help, companies can efficiently carry out knowledge tests, identify competency gaps, and prepare dedicated training programs for specific groups of employees. Through such means, companies can flexibly adapt to changing needs and new requirements.