Alexandria, Virginia — Despite a predicted labor shortage and the anticipated retirement of millions of working Baby Boomers, many companies assign employee development opportunities only on an informal basis according to the Society for Human Resource Management (SHRM) / Catalyst 2005 Employee Development Survey Report.
The survey found good reason for companies to invest in employee development programs. Although few organizations measure the return on investment of employee development programs, of those that do almost all show a positive ROI. Despite this, the majority of organizations do not invest in formal practices, programs and methods meant to address employee development.
“Many employers feel that the knowledge, experience, and skills employees acquire in their day-to-day tasks is sufficient for developing talent,” said Debra Cohen, SPHR, Chief Knowledge Officer of SHRM. “However, with so many key employees positioned to retire in the near future, companies need to take formal steps to ensure smooth transitions and business continuity. When the talent and knowledge of retiring workers walks out the door, every organization needs to make sure they have others ready to fill the gaps.”
In terms of the actual development methods used, the study found that training programs, such as generic and cross-functional training, top the list of training methods most organizations use.
The survey also showed a minority of companies use formal methods of employee development, including succession planning, job rotation, and career mentoring programs. This survey polled a random sample of 248 human resource (HR) professionals to identify the employee development methods used by their organizations.
In addition to seeking new talent to replace the flood of retirees expected in the next few years, organizations must develop their current employees to avoid the loss of organizational knowledge and experience from those retiring.
With the growing presence of women and minorities at all levels in organizations, there is also need to specifically focus development efforts on these groups. The study showed, for example, that representation of women and minorities in managerial positions decreases significantly, as the level of management increases.