How companies ensure success with personnel development
94 percent of employees would stay longer in a company if it offered learning and development opportunities [1]. These are numerous employees 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 Employees skills ensure that companies can react more quickly and easily to upcoming changes in the market. This enables companies to maintain their competitive position. But does a good personnel development strategy really lead to greater competitiveness? A new study by management consultants McKinsey now provides concrete figures and shows: Yes, "Performance through People" is possible and even the key to future success.
Trainingas an important element of HR transformation: more success guaranteed?
In its broad-based study [2], management consultants McKinsey surveyed over 1,800 companies from 15 countries on two key dimensions:
1. how much value did the companies place on the further development of their Employees?
2. how well did they perform (financially) compared to their competitors in the same industry?
They wanted to find out whether investments in the human capital of their own Employees would also be reflected in their financial performance. The result? Impressive! Julian Kirchherr, Partner in McKinsey's Berlin office and an expert in organizational and HR issues, sums it up:
"Companies that keep a close eye on their figures as well as the well-being and, above all, the further development of their employees are one and a half times more likely to remain successful than others. And more likely to keep good people in the long term."
They found that these companies, which the authors of the study called "People & Performance Winners", showed a particularly high level of 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 innovation over the years by investing in their Employees may have more internal resources to fall back on when the going gets tough". Interestingly, People and Performance Winners are also real "talent magnets": Their turnover rate is five percentage points lower than that of competitor companies. Employees are also more satisfied and more likely to stay with the company.
Sounds too good to be true? A little. The study found that only a few companies (9 percent) managed to strike a balance between investing in the human capital of their workforce and financial performance: The majority of companies surveyed focused more on their own performance rather than the well-being and development of Employees (76 percent), while those that focused solely on Employees and their development (15 percent) missed the translation to financial performance. The majority of the companies surveyed are therefore actually "only" mediocre.
All companies can become a People & Performance Winner
Which companies successfully achieve the balance between investment in development and sales? And how can other companies achieve precisely this balance? In the course of the study, 7 criteria were identified that companies in the People + Performance Winner dimension have in common:
- Encouraging and at the same time challenging management style
- Far-reaching personal responsibility and joint focus on a vision
- Company-wide innovation and collaboration
- An inclusive working environment
- Transparent performance expectations and incentives
- Support for initiatives and entrepreneurship
- Effective on-the-job coaching and further training
Take a moment to think about which of these criteria are already fulfilled in your company? In which areas is there still room for improvement?
Becoming a People & Performance Winner with strategic personnel & potential development
So if training 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? First and foremost is strategic HR planning and development. HR developers and managers alike should ask themselves the question: Which specialists with which skills will our company need in 5, 10 or 20 years' time? Do we recruit them from outside or can we train our own people through skillful reskilling or upskilling and make them fit for the future?
experts bought in externally are often expensive and, in times of a shortage of skilled workers, not so easy to find. Focusing on your own Employees therefore pays off twice over: they know the company's processes and culture and become even more committed to the organization through further training. They know: "My employer has invested in me!". This feeling strengthens loyalty and thus the bond with the company. Companies also avoid high vacancy costs if vacancies can be quickly filled internally with their own talent. After all, an unfilled position costs companies up to €38,000 [3]. These are costs that can be avoided through clever personnel planning and targeted further development.
Successful digital transformation thanks to continuous development
Currently, too few companies have the skills they need for the working world of the future with its changing requirements. This was confirmed by a study conducted by the online academy Udacity in cooperation with the market research institute Ipsos. As a result, numerous companies reported a faltering digital transformation that jeopardized their own competitiveness[4].
Companies need the right training measures to build up the right competencies and skills in good time. This is no easy task, as according to Udacity, most employer overestimate their own L&D measures. For example, 80 percent of the employer surveyed stated that they rated their own further development measures as effective. For employees , however, the figure was only 45 percent.
Learning has become more individual, more demanding and also more digital - both on the part of learners and on the part of HR development. While the former want to learn flexibly, interactively and independently, the latter want to develop their organization's Employees in a data-based, strategic and goal-oriented manner. The most important prerequisite is to understand that further development is not a one-off event, but a continuous process. It succeeds in a learning culture that meets all needs.
Conclusion: Becoming a people and performance winner with learning solutions
Transforming your own learning culture is not an easy task that can be accomplished overnight. You should therefore take small steps. As with any strategy process, the first step is to analyze: What skills and competencies do we already have in the company? Which ones do we need in the short, medium and long term? From these findings, you can determine which skills in the organization need to be expanded or newly acquired.
Then ask about the needs of your Employees Do they want to learn flexibly, digitally, on-site, or completely independently? The needs differ from company to company and vary depending on the size, industry, and history of an organization. Then, look for the right learning solutions to help you Employees according to your strategy, needs and requirements. Under the Digital Suite the Haufe Akademie For example, you will find the right digital learning solution for every need. After all, the Haufe Akademie This product family combines decades of experience in the continuing education market with the latest learning technologies and didactically high-quality learning content. Start your transformation to become a People and Performance Winner today!
About the Digital Suite
The Digital Suite is the product family of Haufe Akademie for digital learning. Here, 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 enjoy working on their further development - and for companies that support them in transforming their potential into long-term success.
Springs
[1] LinkedIn, 2020, "LinkedIn LearningReport".
[2] McKinsey, 2023, "Performance through people: Transforming human capital into competitive advantage".
[3] StepStone, 2022, "Vacancy costs". 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.
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