Check out a recent white paper authored by Sarah Perez discussing the importance of employee development.
The ROI of Talent Development
Training and development budgets took big hits across the globe during the recession, but there is light at the end of the tunnel. According to figures released by Bersin by Deloitte in its 2014 Corporate Learning Factbook, spending on corporate training by U.S. employers increased by 15 percent in 2013, the highest growth rate in seven years. In fact, training and development budgets have been steadily recovering for the past several years. In 2011, U.S. spending on training and development increased by 10 percent, and in 2012, it increased by 12 percent.
This is good news. Organizations that invest in the development of their talent benefit by having stronger talent pools, increased retention, lower turnover, higher employee satisfaction rates, and ultimately, healthier and stronger organizations. If HR professionals want to see their training and development budgets fully recover, however, they must be prepared to demonstrate the return-on-investment (ROI) that talent development, particularly talent development at the leadership level, brings to their organizations.
There are a host of reasons why it makes sense for an organization to invest in the development of its talent. Perhaps the most persuasive argument is that it costs a lot more—some estimates put it at as much as 150 percent of an employee’s annual salary—to recruit new talent than it does to develop existing employees. Investing in talent development is vital for employers because it directly affects employee retention, motivation, engagement, and productivity.