Employees are the engine of growth, especially right now, and the competition for talent is only going to intensify. According to the results of our Q3 CEO Confidence Index survey, more than two-thirds (67%) of business leaders believe that hiring challenges are impacting their organization’s ability to operate at full capacity.
Unfortunately for those who hire, employee requirements change as the demand for labor increases. Potential employees want more than a good job and competitive pay; they also want companies with a compelling culture, flexible work options, lofty purpose, and development opportunities for personal and professional growth.
To meet these needs, SME business leaders must turn their attention to employee development. It is important to discern that employee development is different from performance management. Employee development is about improving skills, knowledge, and abilities to enhance the performance and individual growth of team members. Investing in employee development will improve retention, but it will also have a positive impact on engagement and discretionary effort. This combination of skill and will results in greater productivity.
According to research from Vistage, the majority of small and medium-sized businesses direct their investments and resources toward the beginning of the employee lifecycle. In other words, they equip employees with the skills and knowledge to do their jobs well and manage performance expectations accordingly. When going the extra mile and investing in the growth of team members, CEOs should consider the following factors:
1. Culture and values
New employees need to assimilate quickly into the culture of their work environment. This happens by training them on the core values, operating principles, mission, vision, and purpose of the company. Absent this, it can take someone months to observe and understand “how we do things here”.
Even more complicated than onboarding, modeling culture for new hires has become even more difficult with a hybrid or remote workforce. To set clear expectations for employees, companies need to identify and communicate the behaviors that align with their values; led by the CEO from top to bottom. If an employee’s behavior does not align with these values, managers must train them to “live the culture” and meet job expectations. Leaders must intentionally develop and promote their culture so that employees see it shaped every day at all levels; culture is more observed than listened to.
2. Skills and development
Time to Productivity, or TTP, for new hires is a key metric that impacts business performance. While all companies should provide skills training, it is essential for organizations that “hire to fit and train for skills”. These organizations need to set clear expectations for productivity and on-the-job training timelines for different roles. This includes clarifying the processes and policies needed to bring new hires to full productivity, as well as the responsibilities of teams and managers in this regard.
For the avoidance of doubt, organizations need metrics that measure progress and signify total productivity. This includes guidelines on how long it takes to train the average employee to determine if they are meeting expectations. Peer mentors can also help new employees learn organizational skills and processes, including those supported by unfamiliar technology. It is often best to supplement this peer-to-peer training with formal vendor training on technology applications and platforms.
3. Plans for personal and professional growth
When competition for talent is high, it’s important for leaders to provide a clearly defined future for employees beyond the job they were hired to do. For CEOs, it starts with understanding their organization’s strengths, high-potential employees, and how quickly they accelerate through defined career paths. This gives insight into succession planning and helps reveal talent gaps that are hindering the achievement of long-term goals.
If too many employees are forced to acquire skills to meet minimum performance standards, the organization will struggle to achieve its strategic goals. And if employees want to contribute strategically but don’t have a path to it, they become a retention risk. The career path contributes to the development of employees. Based on employee interests and needs, it uses a bottom-up approach to define growth opportunities and map required technical and soft skills. While career pathing is a bottom-up approach that helps individuals grow personally and professionally, succession planning is more top-down, helping the organization identify and develop employees for specific leadership positions.
Organizations need more than just a strategy to succeed. They also need great employees who are both fully engaged and equipped with the right skills and competencies. Companies that engage in employee development demonstrate the value they place on their employees, project the values of their culture, and realize a competitive advantage to attract new employees.
Employee development is an essential part of talent management. For small and medium-sized businesses, it’s a means to many ends. It improves productivity and efficiency. It supports the retention of top talent. It is a differentiator for effective recruitment. It is a manifestation of values and culture. More importantly, it is a roadmap for the future of the organization.
Vistage is the global leader in business performance and leadership advancement for small and medium-sized businesses. For more information, visit www.Vistage.co.uk.