The Economic Case for Learning and Development

Turn on the TV to any financial or economic news  and you will hear the same thing, worry and fear  over a looming recession. While it is true that the  US economy has had a slight pullback in recent  months, the fears over a catastrophic recession  are at the moment just that, fears. During difficult  economic times organizations often pull back on  deploying resources towards the engagement  and development of their employees. This  decision will have a terrible impact on employee  morale and retention as well as the company’s bottom line. 

Disengaged employees have an 18% lower  productivity rate and a 15% lower profitability  rate than their engaged peers. In addition,  employees who are not engaged on the job are  37% more likely to take time off work. When  broken down, a disengaged employee costs a  company, on average, 34% of their annual salary  every year. That means a company loses $3,400  for every $10,000 a disengaged employee earns.  

One of the greatest economic impacts a focus on  learning and development can bring to an  organization is increased talent retention and  reduced turnover. Studies have shown that  companies who score in the top 20% in  engagement realize 59% less turnover; how much  does turnover cost your organization each year?  

Ok, so now that we know the economic impact of  not focusing on learning, development, and  employee engagement, what do we do with this  information? The easiest place to get started is an  employee engagement survey if your  organization isn’t currently doing one. Employee  engagement surveys (EES) are the only way to  get unvarnished direct feedback from your  workforce about the key drivers of their  engagement levels. This will give you invaluable  hard data that you can use to drive better results. One of the reasons organizations often seek third  parties to run these is employees often worry  about anonymity and retribution if they speak  

their minds about company direction and initiatives. 

The second consideration is what gets done after  an EES takes place. The number of organizations  that run EES but don’t take any actionable steps  afterwards is staggering. This shows your  employees that their opinions and feedback are  not valued at work and will likely lead to even  higher turnover and disengagement. 

If you are running surveys and understand the  value of developing your talent and keeping an  engaged workforce, you are now ready to put a  gameplan into action. While every organization  is unique, in Pinnacle Group’s experience there  are several major recurring themes across most  organizations that could be negatively impacting  its employees. Putting a training plan together  that includes communication skills, leading  through change, and developing and retaining  top talent will drastically increase engagement,  retention, and production at your organization.  

Many people think they only need to measure  and improve employee engagement when they  are experiencing high turnover or morale issues,  but nothing could be further from the truth. Such  a philosophy is highly reactive as opposed to  high performing organizations which focus on  being proactive. Failure to focus on employee  engagement will cost you your top talent in the  long run and therefore your company’s success.  The Pinnacle Group team has decades of  experience helping organizations maximize the  productivity of their workforce through  specialized Learning and Development  programs. Whether you want to begin running  employee engagement surveys, need help  deciphering the data of surveys you have already  run, or need help acting on that data by training  your leaders, Pinnacle Group can help  your organization reach its potential!

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