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Talent Development

What is employee development and why is it important?

July 26, 2022
7-minutes Read
Emily Vo

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July 26, 2022
Talent Development

What is employee development and why is it important?

7-minutes Read

To succeed in the current economic landscape, there is high demand for new approaches to employee development. Employees need more support and development opportunities than ever to grow their skill set and stay relevant. Making employee development a priority within your business strategy ensures your team stays updated with industry trends and engaged.

While it might seem like a straightforward challenge to address – in reality, employee development is not as simple as people often think. In this article, we will explore what employee development means. Additionally, we will discover different facets of it, including its benefits to individuals, organizations, and various approaches to developing employees’ skills and competencies.

What is employee development?

As a Human Resource (HR) specialist or Learning & Development professional, developing their people is one of the most important tasks besides hiring, evaluating, and assessing employees.  

Employee development is a process of improving employees' existing skills and competencies or developing new ones to support organizational goals through learning and development. Additionally, It is a combination of formal training, job experiences, and assessment of personality and abilities to help employees prepare for the future of their careers.

Efforts like visualizing employees' current skill set, evaluating the skill gaps, introducing internal development opportunities, eLearning, and managing succession planning result in competent employees and improve organizational performance.

The benefit of Employee Development

1. Business transformation

Businesses need to transform as the world makes changes that include increased digitalization and remote engagement. Organizations who invest in employee development allow their employees to learn how to function in today’s industries. They encourage effective and efficient interaction regardless of whether people can meet face to face.  

As employees improve skills in communication, technology, virtual collaboration, diversity, trust building, and more, a business will transform. The organization can become a larger presence in the world economy, serving a wider range of clients and providing benefits to more customers.

2. Closing the skill gaps

Skills are emerging or evolving, forcing companies to take a new approach to employee management to remain competitive. However, a solution such as hiring new talents is expensive, especially in a competitive market, and it is not efficient from the long-term perspective. Moreover, getting a new employee on board and familiar with the company’s process takes time.

The McKinsey Global Institute predicts that by 2030, about a fifth of the global workforce stands at a risk of losing their jobs to automation. In the report, the US workers were pointed as the most affected by the changes.  

statistic from McKinsey Global Institute research
Adopted from McKinsey Global Institute study

Moreover, according to the Gartner Study, the required skills for a particular position have gone up from 13 in 2016 to 16 in 2021. That counted as a 6.3% increase in evolving skills to meet specific roles. The study also shows that nearly 1 in 3 skills needed for a job in 2018 are no longer required in 2021.

gartner study
Statistic of evolving skills from Gartner For HR Study - Top 5 priorities for HR leaders in 2022

But the organization is not always well-equipped to shift to a skill-based system.  

A growing number of executives believe the skills gap is the biggest challenge their organization will face in the future. Moreover, in PWC’s 2021 future of work and skill survey, business and HR leaders from more than 4000 organizations stated that identifying the skills worker will need in the future is one of their top challenges. However, they also indicated that they don’t know how to develop solutions to deal with it.

Employee development is geared to uncovering employees’ potential (within the organization) who can obtain the skills necessary to achieve organizational targets and create innovation. By collecting employee skills and systematically assessing them, a company can identify the strengths and weaknesses of individual team members, thus connecting their development goals with business imperative.

It is easier and cost-effective to allocate the right talents to the right projects if you have clear visibility into their hidden abilities, skills, and aspirations.  

Additionally, employees are not necessarily expected to have those skills already. More emphasis is placed on having a motivated and satisfied workforce that can transform along with the organization

3. Enhance overal performance

Employees need knowledge and training to perform better in their respective responsibilities. According to a report by Research Gate, 90% of employees agreed that training and skill development improve their job performance. 

There are various types of training to offer employees, for example, offsite activities, third-party training, and in-house training. In addition, you can offer sales training, management training, monitoring programs, and apprenticeships. 

4. Reducing turnover cost via retaining employees

Hiring and retaining employees can be a challenge for HR leaders and managers. When investing in an in-house employee skill development program or tool, there are many things to consider. However, employee development can save costs for organizations in the long term.

“Global Talent Monitor’s report on workforce activity in 2Q18 shows that the lack of future career development remains a key driver of employee attrition — cited by 40% of departing employees as a dissatisfying factor in their job. At the same time, 28% of employees actively seek a job, and 42% are passively open to new opportunities” - Gartner.

The employee development process establishes trust and value in the company, fosters loyalty, and increases staff retention. When done right, employee development allows employees to thrive in their job and understand how vital their works are to the company. It also increases employee engagement and motivation.  

“A survey by GetSmarter in 2020 states that 51% of employees claim that they desire to change job functions in 12 months.”

Moreover, it is crucial for individuals to have control over their career paths. A career path is specific to each employee and aids them in breaking down the steps necessary to attain their long-term career objectives. It necessitates a grasp of the skills, knowledge, and traits required and the additional training to achieve those goals.

Employee development methods

There are various approaches to employee development; some will be more effective than others. In a nutshell, employee development methods fall into four broad categories

  • Formal education includes annual training, eLearning, micro-learning, self-study, workshops, and conferences. 
  • Assessment: collecting information and providing feedback to employees about their behavior, communication style, or skills. Assessment can be done by manager, peer and employees.
  • Job experiences refer to the enlargement of the current job that allows the employee to take on new challenges and apply knowledge to work. Job experiences include job/task rotation, simulation, side projects, or internal mobility.
  • Interpersonal relationships help the employees develop skills and increase their knowledge by interacting with more experienced organization members. Coaching and mentoring are two standard methods used by many well known organizations.

Depending on your organization's resources, you can implement different approaches to build a strong process of continuous learning and development for the employees. The key is to be consistent and mindful of your employee's development needs.


Employee development is an essential process by which organizations will be able to grow and change as the world’s economy transforms. Investment in employees no longer means paying part of health benefits and providing a coffee pot. Instead, the best talent needs continuous learning and development opportunities. When employee development becomes part of an organization’s culture, the company will be better able to achieve its goals.

Are you looking for an employee development tool to take your business to the next level? Then Talbit is a tool you need. We are a modern upskilling platform combining personnel skills, company objectives, and growth plans all in one place. With visible skills information and employees' goals aligned with the company's goals, you can quickly identify business opportunities and develop your talents.

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