Six reasons why high-performing companies invest in leadership training

  • April 20, 2016
  • /   Rachael Gillette
  • /   training-development

Organizations who invest in employee training and development have an average of 24 percent higher profit margins and a 218 percent higher income per employee.

To compete in today's economy, workers need to think critically, solve problems, innovate, collaborate and communicate more effectively—and at every level within an organization, according to an American Management survey.

Talent development needs to be a priority to advance the skills of individuals and drive business success. It's clear that high-performing companies are grasping the value of learning and development, and the role those investments play in recruiting, engaging and retaining talent, as well as increasing profitability.

For companies considering investing in employee development, the Studer Community Institute has a cost-effective training program designed to impact and improve every aspect of the organization. More information on our latest training sessions targeted to improve communication skills can be found here.

Teresa Barber, principal, and founder of Five Point, a strategic services agency, has identified six key facts and trends that help us understand why learning and development investment is considered so valuable to high-performing enterprises. Read more here.

  1. The companies that “get it” with L&D are more likely to be high-performing. High-performing companies consistently spend more on learning and development per employee and are more likely to invest in a total L&D strategy. Companies ranked as “high impact” by Forbes consistently average more spending on training.
  2. Leadership development is highly demanded. As millennials and new leaders emerge into leadership roles, companies need to cultivate strong leadership skills at all levels. Spending on management and leadership training is the top priority and focus for companies investing in L&D.
  3. The next generation and a desire for continuous learning. Brianna Crabb, a data engineer with Capital One, suggests that her decision to join Capital One was largely influenced by several aspects of the company’s culture of engagement and continuous learning. She notes that, especially for young and early-stage associates, professional goals may not yet align with technical and managerial skills and abilities. For tech and knowledge-based companies, or those in industries with rapidly-evolving markets, policies and products, L&D is critical both to maintain technical skills and also to cultivate the next generation of company leadership in the context of rapidly-changing technologies, markets and environments.
  4. The Toolkit is evolving. Explosive growth in training technologies, including self-developed video and presentations, online and social media communications channels, virtual learning platforms and MOOCs (including Coursera, edX) are both revolutionizing today’s training toolkit and boosting accessibility of complementary curriculum and content for learners and companies. Among highly advanced companies, as much as 18 percent of all training is mobile.
  5. Technical evolution leads to greater engagement opportunities. Technology and increased access also encourages greater collaboration and engagement of learners and employees participating in L&D – ongoing and in-depth discussions of topics with learning groups and cohorts no longer must be restricted to the availability of brick-and-mortar classrooms and facilities. When considering the value of investing in L&D, the payoff of Return on Engagement (ROE) grows significantly in the context of these increases in collaborative opportunity.
  6. Keeping pace with innovation. Technology changes rapidly. And as technological changes and improvements flood industries from aerospace to zoological logistics, companies must help team members keep pace with new and relevant services and tools that help them do their jobs, manage their teams, and support the mission and goals of their enterprise. Especially for companies that recruit talent with the promise of innovation, providing platforms for access and learning are critical for retention of that talent. And the payoff of ROE will only improve products and services as your team becomes proficient in technical use and begins to apply new technologies and tactics in innovative ways.

Teresa Barber is a third-generation Pensacolan and Principal & Founder of Five Point, a strategic services agency dedicated to helping clients go to market, and understand and strengthen their market position. Her commentary has been featured in Florida Trend, Context Florida, and numerous other outlets and publications. She can reached at [email protected] or on Twitter @teresathinks.