High Returns for Investing in People

Rationalisation is becoming business as usual for many organisations. There is one expense that is increasing for the world's most productive companies — training and development. Investing in people seems even braver when the forecasts for employee turnover are considered. Survey after survey is reporting that up to one third of employees — reporting low grades in trust and communication in the workplace — plan to look for another job when the economy picks up.

Before slashing the training and development budget, consider the productivity advantage of investing in employees. The world's best companies for leaders also are some of the most productive and sustainable businesses of the last century — GE, Procter & Gamble, IBM, 3M, and Nestle — and fastest growing — Infosys, Cisco, according to the Bloomberg BusinessWeek/Haye Group's 2010 Best Companies for Leadership. What do they have in common? They all invest in training and development in good times and bad.

In more challenging economic times, the temptation to curtail the training budget is all too tempting. The evidence, however, clearly makes the case for increasing investment in people. All tallied, the return on investing in people pays off. Some of the gains are harder to quantify but the benefits of investing in training and development are apparent:

· More knowledgeable employees to share new knowledge and techniques with other employees
· More qualified leaders to train and mentor the next generation of leaders
· More competent employees liaising with customers, partners and suppliers
· More confident employees: An employee's perception of self-efficacy, which is strongly influenced by training and development, is positively correlated with performance

There's more evidence. Companies that invest more resources in training and development enjoy higher retention rates. As a restless and demotivated workforce dusts off its resumes and prepares to job hunt as the economy rebounds, there is no better time to make a strong commitment to the personal development of your workforce.