Importance of Employee Development

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Entrepreneurs often underestimate or overlook the importance of employee development in relation to the success of their business. What these business owners don't realize is that employee development is an investment in their company's future.

Why Employee Development Is Overlooked

Small businesses and some larger companies overlook employee development for a number of reasons.


The first reason is the cost of training. This is an understandable concern for a small business, but there is more than one way to evaluate cost. Instead of looking at it as money spent without much return, look at it as an investment that reaps returns through happy employees who enjoys their jobs. Keeping a good employee saves money in the long run.

If you aren't sure you see the monetary value in keeping an employee satisfied, all you have to do is answer this question: How much does employee turnover cost you? When an employee feels unfulfilled or like they are trapped in a dead end job, they tend to look for a new job. Employee turnover costs money on more than one level. For example:

  • Expenses related to exit interviews
  • Additional administrative duties required due to a termination
  • Possible severance pay
  • Increase in unemployment compensation

On top of these costs, think of the additional expenses related to hiring a new employee.


Training sessions held off site not only incur the cost of the seminar or workshop, but may also include an employee's expenses for lodging, travel, and time away from work. Once again, if you can step back and consider the benefits your company will reap, the small time investment will be worth it.

To help manage the element of time away from the office, another option is to look into online workshops or webinars that provide online training opportunities. This form of training can be accomplished in-house, and eliminates travel time and related expenses. Another benefit of in-house employee development is that employees can often keep up with some of their job related tasks like returning phone calls and emails.

Fear of Losing an Employee

Another reason employers hesitate to provide employee development opportunities is that they are afraid the employee will look for a better job once they are more qualified. This is always a possibility, but if your employee feels valued, they are less likely to leave.

Importance of Employee Development

Once you realize the importance of employee development, the next step is to figure out how to implement training to further develop an employee's skills in a way that benefits your company in the long run. Here are a couple of ways to help access your company's needs along side employee expectations to see where the two best complement each other:


Self-reviews are generated by the employee. These are different from reviews performed by management. Self-reviews are designed specifically to open lines of communication between the employer and employee. It gives the employee a way to express their aspirations for personal growth within the company, and it gives the company a chance to see where the employee's goals line up in ways that will help the company improve and grow.

Needs Analysis

A needs analysis first looks at your company's strengths and weaknesses to help identify what needs to change. Along with this you'll also have to identify what outcome you hope to achieve through employee development. The analysis will answer such questions as:

  • What's going to change in my business?
  • How will my employee's behavior or performance change?
  • How will these changes benefit my company?

Looking at the Big Picture

When you look at the big picture, it is easy to see the advantage to employee development, for the employee. They can further their career with improved skills which makes them more marketable. However, benefits for the employer can prove to be long term as well.

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Importance of Employee Development