What is People Development & Why is it Vital for Your Organization?

People development is helping employees cultivate skills, knowledge, and expertise to support an organization’s goals. This strategy produces many benefits, including boosted productivity and profitability, making people development a worthwhile investment for companies in every industry.

People development is not a nice to have; it’s a critical component for successful organizations now and in the future.

A recent study by management consulting company Korn Ferry predicts that by 2030, there will be a global human talent shortage of more than 85 million people, or roughly equivalent to the population of Germany. Left unchecked, this talent shortage could result in about $8.5 trillion in unrealized annual revenues. About $1.7 trillion of those losses will be sustained by U.S. companies.

There’s no need to wait until 2030: skill gaps negatively impact businesses today. Data from McKinsey, for instance, shows that 87 percent of companies are experiencing [skill] gaps now or expect them within a few years.

Moreover, nearly half of those—43 percent—said that skill gaps impacted them. You can address or avoid these issues by focusing more on people development.

Learn about people development and its value for your business, including eight strategies and tips for applying best practices.

What are the benefits of people development?

The benefits of people development aren’t just for employees but for your organization. By equipping your teams with greater knowledge and stronger skills, talent development produces positive ripple effects that benefit all aspects and levels of your business, from workplace culture and morale to productivity and revenue.

So what are some ways you can benefit by prioritizing an employee development program? Three specific examples include increasing employee retention, improving the ability to attract top talent, and boosting overall profitability.

Learn more about the strategic benefits of people development for businesses, and explore seven ways to empower your teams.

Boost profitability

People development aims to grow your team’s skills—and when your team’s skills increase, so do your profits. According to research by the American Society for Training and Development (ASTD), businesses that implement employee training programs report 24 percent higher profits than their competitors.

Additionally, research from MIT indicates that training and development programs can deliver an astounding 250 percent ROI in as little as eight months. Examples of skill sets or skill types that can be cultivated through people development include hard skills (such as knowledge of specific software) and soft skills (such as time management or inclusiveness).

Attract top talent

Prioritizing people development helps your organization attract top talent. Gallup data reveals that 59 percent of Millennial workers seek employers that provide career and professional development opportunities, such as training or educational programs. This demand is unsurprising when you consider research showing that the employees of companies who invest in training earn 218 percent more income.

With Millennials now comprising the bulk of the labor market, that’s a trend you can’t afford to ignore.

Reduce turnover and improve retention

Millennials—and other employee demographics—expect employers to provide opportunities for upskilling and career advancement. Companies that fail to meet this expectation risk losing talent (and revenue) to competitors. This poses a significant issue, considering employee turnover costs U.S. businesses an average of $1 trillion annually.

You can address these pain points, reducing turnover-related losses while improving employee retention rates, by creating a workplace culture that values and emphasizes people development.

What’s the difference between people development and employee development?

People development and employee development are typically used interchangeably. However, some organizations differentiate them by linking employee development to career advancement and people development to filling skill gaps.

Both people development and employee development result in a more competent and confident workforce, making it vital for organizations to ensure they enable both.

Providing development opportunities can increase productivity, morale, and employee engagement.

Examples of people development in the workplace

Employees are motivated by different factors, respond to different leadership styles, and have different learning styles. They also have different talents that can be leveraged—and, on the other hand, different gaps in their existing skillsets.

In short, your employees have unique weaknesses, strengths, and needs when it comes to their training, education, and professional development.

You must accommodate these differences to build people development initiatives that deliver over the long term.

Fortunately, there are many different people development strategies, providing opportunities for every member of your team to learn and grow successfully. From mentorship programs to knowledge-sharing and corporate training days, here are eight people development strategies your business can implement on-site and/or virtually.

Corporate training sessions

Whether you host them in person or online, corporate training days or events can build your team’s skills while encouraging stronger relationships.

Examples of topics appropriate for organization-wide corporate training days include software demos or training on diversity and inclusivity.

Job-shadowing events

Job shadowing provides opportunities for current and/or prospective employees to expand their knowledge of various roles within your company, including the tools, skills, and projects they’re working on.

Job shadowing gives employees and candidates deeper insights into your organization’s goals and values—and helps team members find the right niche for their talents. That means you save money on recruiting while providing opportunities for employees to explore their passions and talents.

Knowledge-sharing activities

Silo mentality, which occurs when there is poor (or zero) communication between colleagues and departments, results in problems like operational inefficiency and diminished workplace morale. Lack of knowledge-sharing also makes it harder for innovation and collaboration.

Therefore, promoting and facilitating knowledge-sharing between teams and individuals is beneficial. You can use tools like a learning management system (LMS) to enable knowledge-sharing and foster a culture of continuous learning.

Mentorship programs

Workplace mentorship programs have multiple benefits. They help employees discover and develop valuable skills and forge stronger, more positive connections that lay the groundwork for a culture of learning while improving job satisfaction.

That’s why mentorship programs are in place at nearly three-quarters (70 percent) of Fortune 500 companies.

Online L&D opportunities

The explosion in remote work has changed how businesses operate—a trend that can (and should) extend to their L&D programs.

For example, you can deliver some or all of your people development programs through a secure, cloud-based LMS like WorkRamp, which provides convenience and flexibility for everyone on your team.

Peer coaching

Like mentorship programs, peer coaching allows informal and social learning to flourish. For example, research shows that over half of employees (55 percent) are more likely to consult their peers than their managers for help or insight.

Read more: How to Create a Coaching Culture to Support Employee Development

Skill gap analysis

It’s critical to perform an in-depth skill gap analysis. This process is the first and most fundamental step to define the gaps between your organization’s goals and your team members’ current abilities.

Performing a skill gap analysis helps you deliver better, more relevant training content so employees can develop the skills to support their career growth and make your organization competitive.

At the same time, businesses avoid wasting time or money on redundant or ineffective training programs that don’t fully align with company goals.

Upskilling and reskilling

Research by McKinsey found that market and technology trends [are expected] to play a big part in future skill gaps. Data analytics, executive management, and IT management are some areas where future gaps will be the most significant.

These findings highlight the importance of people development as a tool to ensure your team members’ skills are keeping pace with new trends, innovations, and disruptions in your industry. Upskilling and reskilling are cost-effective strategies to maintain a competent and qualified workforce without externally sourcing talent.

The takeaway? Using some or all of these strategies, you will be better positioned to reach revenue targets, identify team members with strong leadership potential or other untapped skills, and meet workers’ and job-seekers growing demands for career development opportunities.

Effective people development leads to improved job satisfaction, increased employee engagement, and boosted productivity, a win-win for your organization and your people.

Now the question is, how can you get started?

People development best practices

We’ve learned what people development is, explored why people development matters for your business, and even shared some actionable people development strategies you can use today.

However, you must also implement best practices to achieve the best outcomes. So what do the experts recommend?

Here are three best practices to help ensure your people development initiatives get off to a healthy start.

• Ask employees to share hidden talents. Sure, your employee is an IT whiz—but did you know they were also a gifted communicator or that they excelled at creating illustrations? The Harvard Business Review shares strategies for discovering (and tapping into) team members’ hidden talents.
• Focus on employees’ strengths. Examples of employee strengths include hard or soft skills, such as critical thinking, leadership, writing, communication skills, the ability to speak multiple languages, or in-depth knowledge about a specific piece of equipment, machinery, or software.
• Ask employees what they enjoy doing most. Learning about what your employees consider their favorite part of the role—or on the other hand, the most challenging—will help you build a more engaging people development program.

Need help getting started? Save time and take the guesswork out with this free employee training plan template.

How WorkRamp can help you develop your people

Supporting your business begins with empowering your team. Fuel employee development and boost performance with the Learning Cloud.

The Learning Cloud provides a single platform for all your employee and customer training needs to help you reach your people development targets and create more growth opportunities.

Discover how the Learning Cloud can help unlock your team’s full potential. Contact us today to schedule a free, personalized demo.