How companies ensure success through personnel development
94 percent of employees would stay with a company longer if it offered learning and development opportunities [1]. These are numerous workers who want to contribute new skills and abilities to their company. An attitude that ensures long-term success for companies. After all, with a modern management style and continuous on-the-job training, they not only increase the productivity of their employees, but also increase their satisfaction. In addition, new employee skills ensure that companies can react faster and more easily to upcoming changes in the market. In this way, you can maintain your own position in the competition. But does a good personnel development strategy really lead to greater competitiveness? A new study by management consultancy McKinsey now provides concrete figures and shows: Yes, “performance through people” is possible and is even the key to future success.
Continuing education as an important element of HR transformation: More success guaranteed?
In its broad-based study [2], management consultancy McKinsey surveyed over 1,800 companies from 15 countries about two key dimensions:
1. How much value did companies place on the development of their employees?
2. How well did they perform (financially) compared to their competitors from the same sector?
They wanted to find out whether investments in the human capital of their own employees would also be reflected in financial performance. The result? Impressive! Julian Kirchherr, partner in McKinsey's Berlin office and expert on organizational and personnel issues, summarizes:
“Companies that keep a close eye on both their figures and the well-being and, above all, the development of their workforce are one and a half times as likely as the others to remain successful. And more opportunities to retain good people permanently. ”
They found that these companies, which the authors of the study called “People & Performance Winner,” showed particularly high resilience in times of crisis. During the survey period and the pandemic years, their performance even improved. The authors of the study explain this phenomenon as follows: “Companies that build up reserves of loyalty, goodwill and innovative capacity over the years through investments in their employees may have more internal resources that they can draw on when push comes to shove.” Interestingly enough, People and Performance Winners are also real “talent magnets”: Their turnover rate is five percentage points below that of competing companies. Employees are also happier and more likely to stay with the company.
Sounds too good to be true? A little bit. The study found that only a few companies (9 percent) manage the balance between investments in their workforce's human capital and financial performance: The majority of the companies surveyed focused more on their own performance rather than on the well-being and development of employees (76 percent), while those who paid exclusively attention to employees and their development (15 percent) missed the translation into financial performance. The majority of the companies surveyed are therefore in fact “only” mediocre.
All companies can become People & Performance Winners
Which companies successfully balance investments in development and sales? And how can other companies achieve exactly this balance? In the course of the study, 7 criteria were identified that companies in the People + Performance Winner dimension have in common:
- Strengthening and at the same time challenging leadership style
- Extensive personal responsibility and joint focus on a vision
- Enterprise-wide innovation and collaboration
- An inclusive work environment
- Transparent performance expectations and incentives
- Support for initiatives and entrepreneurship
- Effective on-the-job coaching and continuing education
Take a look at yourself and consider: Which of these criteria have already been met in your company? In which areas is there still room for improvement?
Become a People & Performance Winner with Strategic Staff & Potential Development
So if continuing education is one of the keys to better financial performance even in times of crisis and higher employee retention: How do you use this key correctly? Strategic personnel planning and development is at the top of this. Personnel developers and managers alike should ask themselves the question: Which specialists will our company need with which skills in 5, 10 or 20 years? Are we recruiting them from outside or can we further train and prepare our own people for the future through clever re- or upskilling?
Experts purchased externally are often expensive and not so easy to find in times of a shortage of skilled workers. Focusing on your own employees therefore proves its worth twice: They know the processes in the company and the culture and are even more committed to the organization through continuing education. You know: “My employer invested in me! ”. This feeling strengthens loyalty and therefore ties to the company. Companies also avoid high vacancy costs as a result, when vacant positions can be quickly filled internally with their own talent. After all, an unfilled job costs companies up to 38,000€ [3]. These are costs that can be avoided through clever personnel planning and targeted development.
Successful digital transformation thanks to continuous development
Too few companies currently have the skills they need for the working world of the future with its changing requirements. This was confirmed by a study by the online academy Udacity in cooperation with the market research institute Ipsos. As a result, numerous companies reported a faltering digital transformation that threatened their own competitiveness. [4]
In order for companies to develop the right competencies and skills in good time, they need the right continuing education measures. Not an easy task, as according to Udacity, most employers overestimate their own L&D measures. For example, 80 percent of the employers surveyed stated that they rated their own development measures as effective. However, it was only 45 percent of employees.
Learning has become more individual, demanding and also more digital — both on the part of learners and on the part of personnel development. While the former want to learn flexibly, interactively and independently, the latter want to further develop employees of their organization based on data, strategy and goals. The most important requirement is to understand that development is not a one-time event, but a continuous process. It is successful in a learning culture that meets all needs.
Conclusion: Becoming a People and Performance Winner with Learning Solutions
Transforming your own learning culture is no easy task that can be done overnight. So take small steps. As with any strategy process, it starts with an analysis: What skills and competencies do we already have in the company? Which do we need in the short, medium and long term. From these findings, you will deduce which skills need to be developed or learned anew in the organization.
Then ask about the needs of your employees. Do they want to learn flexibly, digitally, locally or would they rather learn completely independently? The needs vary from company to company and vary depending on the size, industry, and history of an organization. Then look for suitable learning solutions that can help you develop your employees in line with your strategy, needs and needs. Under the Haufe Academy Digital Suite, for example, you will find the right digital learning solution for every need. After all, in this product family, the Haufe Academy combines decades of experience in the continuing education market with the latest learning technologies and high-quality educational content. Start your transformation into a People and Performance Winner today!
About Digital Suite
The Digital Suite is the Haufe Academy's product family for digital learning. This is where decades of experience from the leading provider of continuing education in German-speaking countries meet innovative technologies and exceptional content.
With individual combinations of modern learning environments and a variety of digital learning content, the Digital Suite adapts to the specific challenges in companies. For employees who are motivated and happy to work on their development — and for companies that help them transform their potential into long-term success.
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[1] LinkedIn, 2020, “LinkedIn Learning Report.”
[2] McKinsey, 2023, “Performance through People: Transforming Human Capital into Competitive Advantage.”
[3] StepStone, 2022, “Vacancy Expenses.” https://www.stepstone.de/e-recruiting/blog/vakanzkosten-unbesetzter-arbeitsplatz.
[4] Udacity & Ipsos, 2021, “Talent Transformation: Digital-Skilled Needed.” https://www.ipsos.com/en/talent-transformation.