Employee Development in SMBs: A Complete Guide

Chapter 1

Employee development: why bother?

For small business owners and leaders, employee development can be quite far down a list of priorities that also includes “keep business afloat” and “pay bills”. You know it’s something you should do, but it’s not necessarily something you should do right now.

That could be a mistake. Far from a ‘nice to have’, employee development is increasingly fundamental to business success, as this guide will demonstrate. If anything, it is the most valuable of all employee benefits.

But that’s not always an easy message to get across. As far as hard-pressed managers are concerned, employee development means…

These fears should be set aside. The benefits of employee development far outweigh any disadvantages.

“Employee development is almost universally recognized as a strategic tool for an organization’s continuing growth, productivity and ability to retain valuable employees.” 

Society for Human Resource Management (SHRM)

The benefits of training and development as part of an employee benefits’ package

Your talent stays

Far from taking the skills you’ve helped develop to a competitor, an employee benefits package that includes a comprehensive training element makes it more likely staff will stay. PWC research has found that 35% of employees saw training and development programmes as the main factor making an organisation compelling to work for. The UK L&D Report 2018 shows that businesses which spend more on training and development enjoy the lowest turnover of staff. And the LinkedIn 2018 Workplace Learning Report found that 94% of employees would stay at a company longer if it invested in their career development. 

Development is cheaper than recruitment

Recruitment is expensive. The cost of replacing a single member of staff can be as much as £30,000, and that’s if you get the right person for the job. The Recruitment & Employment Confederation (REC) has found that making the wrong hire at mid-manager level can cost businesses up to £132,000. 

It’s seen as an employee perk by prospective hires

A comprehensive employee development programme helps you attract the best and brightest recruits. Research by Gallup found that 59% of millennials say opportunities to learn and grow are extremely important to them when applying for a job. 

“Leverage your training as an employee incentive, and add it to your existing benefits package alongside retirement and health and wellness options.”

Cameron Bishop, CEO of SkillPath

Employee benefits and your bottom line

Well trained employees make your business better, too, because they perform better at their jobs. Gallup research reveals that businesses which invest in strengths-based development can increase profits by 29%. What’s more, employee development is a way to keep staff engaged. That’s crucial. One US study put the cost of employee disengagement at an extraordinary $500 billion a year!

Training together helps teams to bond. It can unlock skills that employees didn’t know they had (again both making them happier and reducing staff turnover), and uncover potential leaders. A good training and development programme is mapped to your company’s strategic goals, ensuring you always have the right skills in place. When change is almost constant and business objectives fluid, a systematic programme of employee development will help you to keep up.

“Technological innovations are happening faster than ever. New competitive threats are emerging in practically all industries…In this environment, employee roles and responsibilities can change quickly—which means team members need to learn and adapt quickly to succeed.”

Versal Group

Chapter 2

Employee development: what’s available?

Training and development is one of the most crucial employee benefits. So what does it look like? You have a range of options for a range of situations, challenges and use cases. 

Onboarding

Onboarding is “the…process of integrating a new employee into an organisation.” Good onboarding gives new hires the skills they need to start making a productive contribution to your business, and a feeling of being wanted and respected from day one. (Bad onboarding leads to a new junior software developer wiping the entire company database on their first day…)

CPD

Certifications for Professional Development (CPD) offer distance and classroom learning for professionals in subjects from project management to veterinary medicine (and everything in between). Many courses are online, backed by workshops and seminars, and you study at your own pace and in your own time. CPD allows “individuals to continually ‘up skill’ or ‘re-skill’ themselves, regardless of occupation, age or educational level,” and CPD usually counts towards ongoing professional certification to practice.

Online learning

The global e-learning market is expected to be worth $200 billion by 2024, such is its rocketing popularity. It’s easy to see why. E-learning is cost-effective and convenient, because you don’t pay for teachers, classrooms or travel. It can be self-driven, self-paced and features interactive elements. According to LinkedIn, 58% of employees prefer to learn at their own pace. Online learning is also often bitesize (which won’t take too long to complete) and can be completed at a learner’s convenience, meaning less time away from the workplace. 

Peer to peer (P2P) training

Why pay for a third party to provide skills that already exist in your business? Use regular sessions to encourage knowledge sharing among employees. Skilled staff who know your business inside out might be the best trainers of all. Give them incentives to share best practice with colleagues. Sessions should be informal, fun and frequent.

“Two people will collectively know more than one. Three will know more than two. And when you have…smart people sharing their knowledge, there’s very little you can’t accomplish together.”

Douglas C. Merrill, former CIO at Google

Mentorship and coaching

With mentorship, more experienced members of staff (or external specialists) teach others, usually one-to-one. According to the Association for Talent Development, 71% of Fortune 500 companies have some type of mentorship program, and SMBs can benefit from them too. Mentorships help to create a culture of learning, while reducing costs and creating a safe place for employees to learn without judgement. According to a study by SuccessFactors and Oxford Economics, millennial workers want monthly feedback on performance and progress, something which a mentorship programme can provide.

Reverse mentoring

With reverse mentoring, junior members of staff teach senior executives, creating a two-way channel of continual learning. It’s not a new idea. In the 1990s, General Electric used reverse mentoring to teach older executives about the internet. Today, reverse mentoring might tackle questions like how a company might better engage with younger people or attract millennial employees. Estee Lauder uses the technique to educate senior executives on the use of social media influencers and knowledge sharing software.  

Cross-training

Cross-training teaches employees to do other jobs within your organisation. Cross-trained staff learn new skills and develop connections with colleagues in other parts of the business. It’s a fast way to create not just a trained workforce, but one that is resilient and responsive to changing circumstances.

Shadowing

Work shadowing involves one person experiencing the work of another by observing them for an agreed period of time. Shadowing can be highly effective for onboarding new staff and for career development through job transfer, giving an insight into the reality of different roles and responsibilities.

Informal learning

Guest speakers, webinars, customer/supplier visits, senior management Q&A sessions…all these and more are ways to help instill a culture of continual learning, and are viewed as valuable employee experiences.

Chapter 3

What’s going to work for you?

So what is the best employee development regime for your business? Here are the pros and cons of the most common employee development options.

Online learning

Pros

Online learning is cheap and convenient, with no teachers, classrooms or travel to find and book. Learners can jump to the parts of an online course that are most useful to them, skipping information they already know, or repeating parts they are less sure of. They can learn at their own pace, access training wherever they are, and benefit from an immersive learning experience which can include text, graphics, video, quizzes and more. 

Cons

E-learning can’t provide the kind of hands-on training some business functions need. Self-paced can easily become no-paced. Online learning doesn’t allow for the kind of group interaction that can be the nursery of new ideas and support. It is perhaps better for teaching easily defined practical skills, and less appropriate for high level business skills. 

Classroom learning

Pros

A tutor-led process has obvious benefits, from a more nuanced training environment to tailored individual feedback. Tutors can assess the needs of a class to focus on specific knowledge gaps. They can offer one-to-one direction for slower learners. A group dynamic can emerge that helps learners explore issues and arrive at solutions for themselves. Interaction with a good teacher can be motivating. 

Cons

Cost, in terms of both time and money. The hire of rooms and tutors and the travel and subsistence needs of staff don’t come cheap. Some tutors are better than others, so classroom learning can be inconsistent.

Mentoring, shadowing and P2P

Pros

P2P means one-to-one or small group learning at low cost and with direct relevance to your business. When more senior or experienced staff members are involved, it helps to cement a culture of continuous learning. P2P sessions can be organised for the least disruptive times, while mentoring and shadowing can combine learning and productive work, all customised to the exact needs and environment of the business.

Cons

Staff members are not professional trainers, and may lack a teacher’s insight and empathy. Mentoring takes time away from other activities, which might be costly when senior executives are involved. Peers steeped in company culture will teach ‘your’ way of doing things, whether or not your way is best.

What works?

In practice, you’re likely to employ different combinations of employee development techniques in different circumstances. For example…

Onboarding: a blend of online learning and shadowing might be useful.

Leadership skills: classroom-based learning and mentorship can teach a combination of hard and soft skills.

New technology training: e-learning blended with P2P support from tech-minded colleagues might work best here.
Blending training in this way can help to overcome many of the challenges of employee development. For example, combining P2P and online learning discourages the inertia that e-learning alone can promote. An e-learning module can help to reinforce lessons learned in a classroom session and ensure instructions stick.

Chapter 4

How to implement an employee development programme

Continuous improvement requires a commitment to learning. That has to come from the top of your business. A commitment to learning permeates down through an organisation, with employees seeing the value of continually upgrading skills if leaders appear to respect it as well. LinkedIn found that 56% of employees would spend more time learning if a manager suggested a relevant course. This is easier for an SMB, where leaders are seen to play an active part in identifying skills gaps and determining training goals.

Understand your needs

Why develop your staff? Firstly, because employee benefits are, as we’ve seen here, valued by staff.  

More immediately, you might be targeting a new market sector, or implementing new software. Maybe your staff lack technical skills that are becoming increasingly necessary. Maybe you want to nudge high performing employees towards management roles.

Whatever it might be, defining your goals, identifying gaps and making a plan to fill them is the first stage of any employee development programme. Don’t forget soft skills. All staff can benefit from development in areas like communication, problem solving and asking the right questions of customers.

“People skills are more and more important in an era where we have powerful and pervasive technology. It sounds counterintuitive, but to beat the bot, you need to be more human.”

Paul Roehrig, chief strategy officer, Cognizant Digital Business

Setting goals

What might your employee development goals be? Most importantly, they need to be precise and attainable, and aligned to business strategy. This in turn will help you measure impact and return on investment.  

Goals should be SMART: Specific, Measurable, Achievable, Relevant and Timely.

Define success

What does success look like in terms of employee development? You can measure how many employees complete training goals, the collective cost of training, and the effect on business or departmental performance over time.

More specifically, you might measure:

Attach development goals to performance reviews, and see if your approach is showing tangible benefits.

Other factors to consider

Different groups of employees may have different needs based on age, culture, background and so on. For instance, older employees may be concerned with staying abreast of rapidly changing technology. Younger ones may be looking more towards career development. Give all employees the same access to training and career development programmes, and let them decide on the path that best suits them.

“Employees of all age groups should be encouraged to take control of their own career progression and development, and the benefits of lifelong learning should be promoted in a way which appeals to all workers.”

Claire McCartney, Training Journal

“Providing opportunities for employees to solve real problems facing the organisation is a key element of an employee development program. When employees work to research a challenge and collaborate with others to develop a solution, the workplace becomes a laboratory for the skills learned in the classroom.”

Sherri Kong, Executive Coach

Chapter 5

The paperwork

Employee benefits that work need to be properly administered. Here’s what you need to keep on top of.

Career development plans

One for every employee, discussed in advance and reviewed regularly. Talk to your employees about their goals for personal growth. Align those goals with the needs of the company and the resources you can access. Create plans with the full involvement of employees so they buy into their aims and methods.

Training needs

Use the career development plan to decide between you what an employee might reasonably achieve towards their goal this year or six months, and the resources that might be required. Create a practical time-limited programme of training and development. Establish targets and measure progress regularly.

Training records

Keep records of the training every employee has completed, acknowledging high achievement, so you have a complete record of your company’s knowledge pool. Training records also remind employees of your commitment to their career development, and allow them a transferable record which will serve them throughout their careers.

Annual reviews

A review of progress towards development goals can be included as part of an annual performance review, or during more regular ‘performance conversations’. Whichever it is, review progress, update goals, and decide on new training requirements. Make employee development a continuous cycle, not an occasional stipulation when a new skill is required. 

Fund employee benefits with Soldo

We’ve seen that employee development is crucial to the health of your business, but how to pay for it? Soldo is a sophisticated business expenses solution that empowers staff with controlled access to company money, letting them pay for training, bespoke to their personal needs, without ever allowing spending to spiral out of control. Give staff control over their learning journeys and boost engagement and retention. Learn more at Soldo.com.