Investing in Professional Development
Employers are considering more efficient ways to bridge skills gaps in today’s competitive talent landscape. Many companies are hiring to meet new business challenges, but it might not be the most economical choice. According to the Society of Human Resource’s 22 Human Capital Report, the average cost-per-hire was $4,683 for typical employees, and upwards of $28,329 for executives.
While the allure of fresh perspectives may seem enticing, investing in the growth of your existing workforce can yield remarkable results more cost-effectively.
- Recruitment and Onboarding Costs: The recruitment process can accumulate a variety of expenses when hiring new talent. Job advertisements, recruitment agency fees, background checks, and screening assessments can cause enormous upfront costs for new hires. Then once the employee is hired, there are onboarding expenses like paperwork processing, training, and familiarization with company culture, policies, and procedures – all of which take time…and we all know that time equals money. However, training – or upskilling – current employees typically skips over most of these costs since the individuals are already hired members of the organization.
- Productivity and Time: When hiring new talent, there is an adjustment period of learning required for them to become effective team members. During this time, productivity may be lower, and additional support or supervision may be needed. On the other hand, training current employees allows them to acquire new skills while still contributing to their regular role responsibilities. This can minimize productivity disruptions and potentially lead to more efficiencies and faster returns on investment.
- Employee Engagement vs Employee Turnover: Providing professional development opportunities sends a powerful message to your employees: their growth and success matter to the organization. This investment can ignite a sense of engagement, motivation, and job satisfaction in your workforce, leading to a committed team dedicated to contributing their best work. Simply put, employees who feel valued and have growth opportunities are more likely to stay with the organization. This stability in your workforce fosters a positive work environment, minimizes disruption, and saves resources on recruitment and training in the long run.
While both hiring new talent and upskilling current employees come with costs, it’s important to consider the long-term benefits and return on investment for your organization. Ultimately, the decision between hiring new talent and training current employees should be based on the organization’s specific needs, available resources, and long-term goals. Striking a balance between the two approaches can help organizations optimize their workforce, maximize cost-efficiency, and foster a culture of continuous learning and growth.