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Why is Career
Development Important for the Organization of the Future? Ron Elsdon From “What will it take for you to support investments in our workforce such as in career development processes?” Concern was clear in the voice of the HR (human resource) professional posing this question of organizational leaders during a recent exchange. It was greeted with the reply “Just show me the financial benefits.” So often as career development or HR professionals we accept as an article of faith the value of investing in career development because we see the benefits anecdotally for individuals. It is not so easy for organizational leaders struggling with the challenge of allocating limited resources. Investing in career development here may mean foregoing needed hardware over there. With career development frequently viewed as a nice-to-have, not surprisingly it is difficult to begin organizational career development processes and even more difficult to sustain them. Let’s look at why this can change in the future, why the nice-to-have of organizational career development can become a need-to-have. Until the late 1990s in most sectors of the Recent work has shown the cost impact of attrition being equivalent to a decrease in market value of more than 10% in a single year for some organizations. This is a tough statistic to ignore. In fact this information should be on the front of the CEO’s desk. But is it? In talking to HR groups about attrition around the country I usually find that only about 20% of participants quantify the costs of attrition and few translate this into how it affects market value. Market value is the primary financial driver of a for-profit organization. Fewer still develop projections of the future and the financial consequences of attrition. And yet tools are available to make such projections, for example to estimate the financial impact of changing attrition levels, which are directly affected by career development processes. These tools take us from the first four levels of training evaluation developed by Donald Kirkpatrick, to level five added by Jack Phillips and to level six added by Ron Elsdon and Seema Iyer. These six levels are as follows: · Level 1: Reaction and Planned Action o Measures participant satisfaction and planned action (sometimes known as a smile sheet) · Level 2: Learning o Measures changes in knowledge skills and attitude · Level 3: Individual Performance/Behavior o Measures changes in on-the-job behavior · Level 4: Business Results o Measures business impact, for example increased sales or productivity · Level 5: Return on Investment o Compares program benefits to costs · Level 6: Prediction o Estimates impact of resources on future performance They move us from a descriptive approach in the first five levels to a predictive approach in level 6. They lay the groundwork for showing why approaches such as career development are important financially. Is there any hard data that demonstrates the financial impact of organizational career development programs? One example is a study conducted at Sun Microsystems that showed a 183% return on investment for a comprehensive career development program. This program, based on individual career counseling, helped employees better understand themselves and their options and choices. As a result they chose to stay with the organization rather than leave it. Traditional approaches to management focused on organizational performance. Individual development was an afterthought. Policy manuals on the shelf defined the relationship with individuals and it was one size fits all. The world we are entering is quite different. It is a world in which people will seek an individual relationship with their organization. It is a world that will place greatly increased demands on leaders. These demands will require leaders to understand and develop themselves. These demands will require leaders to courageously create organizations that value and develop each person. This means recognizing that performance and development go hand in hand. The relentless forces of demographics will help drive this. As career counselors we have a responsibility and an opportunity to show the impact of our work in tangible financial terms. We have a responsibility and an opportunity not only to help our clients find greater fulfillment in their work but also to show how this enriches the organizations in which they work and the communities in which they live. |
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