Employees are the fuel for growth — especially right now and competition for talent is only going to intensify. Results from our Q3 CEO Confidence Index survey, more than two-thirds (67%) of business leaders, believe that hiring challenges are impacting their organisation’s ability to operate at full capacity.
Unfortunately for those hiring, employee requirements are changing as workforce demand increases. Prospective employees want more than just a good job and competitive compensation; they also want companies with a compelling culture, flexible work options, a noble purpose and development opportunities for personal and professional growth.
To address these needs, SME business leaders need to turn their attention towards employee development. It’s important to discern that employee development is different from performance management. Employee development is about improving skills, knowledge and capabilities to achieve performance improvement and individual growth of team members. Investing in employee development will improve retention, but it also positively impacts engagement and discretionary effort. This combination of skills and will results in greater productivity.
According to Vistage research, the majority of small and medium sized businesses direct their investments and resources to the front end of the employee life cycle. That is, they equip employees with the skills and knowledge needed to do their job well and manage performance expectations accordingly. When going one step further, and investing in the growth of team members CEOs have the following factors to consider:
1. Culture and values
New employees need to quickly assimilate to the culture of their work environment. This happens by training them on the company’s core values, operating principles, mission, vision and purpose. In the absence of this, it can take months for someone to observe and understand “how we do things around here”.
Even more complicated than onboarding, modelling culture for new employees has become even more challenging with a hybrid or remote workforce. To set clear expectations for employees, companies must identify and communicate the behaviours that align with their values; led by the CEO from the top down. If an employee’s behaviour does not match those values, managers need to coach them on “living the culture” and meeting job expectations. Leaders need to intentionally develop and promote their culture so employees see it modelled every day at every level; culture is observed more so than heard.
2. Skilling and upskilling
Time-to-productivity, or TTP, for new employees is a key metric that impacts business performance. While all companies should offer job skill training, it is essential for organisations that “hire for fit and train for skill”. These organisations need to set clear expectations for time-to-productivity and skills training for different roles. This includes clarifying the processes and policies required to bring new employees up to full productivity, along with the responsibilities of teams and managers in doing so.
To avoid doubt, organisations need metrics that measure progress and signify full productivity. This includes guidelines for how long it should take to train the average employee to determine if they’re meeting expectations. Peer mentors can also help new employees learn skills and organisational processes, including those supported by unfamiliar technology. It’s often best to complement this peer-to-peer training with formal training from vendors on technology applications and platforms.
3. Personal and professional growth plans
When competition for talent is high, it’s important for leaders to provide a clearly defined future for employees beyond the job they’ve been hired to do. For CEOs, this starts with understanding their organisation’s bench strengths, high potential employees and speed at which they are accelerating through defined career paths. This provides a view of succession planning and helps reveal talent gaps that stand in the way of long-term goals.
If too many employees are stuck learning skills to meet the minimum performance standards, the organisation will struggle to achieve its strategic goals. And if employees want to contribute strategically but don’t have a path that leads there, they become a retention risk. Career pathing helps drive employee development. Based on employee interests and needs, it uses a bottom-up approach to outline growth opportunities and map out the technical and soft skills required. While career pathing is a bottom-up approach that helps individuals achieve personal and professional growth, succession planning is more top-down, helping the organisation identify and develop employees for specific leadership positions.
Organisations need more than just a great strategy to succeed. They also need great employees who are both fully engaged and equipped with the right skills and competencies. Companies that commit to employee development demonstrate the value they place on their people, project the values of their culture and realise a competitive advantage for attracting new employees.
Employee development is a critical component of talent management. For small and medium sized businesses, it is a means to many ends. It improves productivity and efficiency. It supports retention of top talent. It is a differentiator for effective recruiting. It is a manifestation of values and culture. Most importantly, it is a road map for the future of the organisation.
Vistage is the world’s leading business performance and leadership advancement organisation for small and medium sized businesses. For more information visit www.Vistage.co.uk.