APU Business Original

Employee Development Programs and Benefits to Employers

Employee development programs are one benefit that employers often overlook, but they can add considerable value for both employees and the organization. Development assistance programs, depending on their specifics, can go a long way toward helping employees reach their professional development goals. And this can add up to a lot of value, considering that 76% of employees are looking for opportunities to expand their careers, according to Training Industry.

In previous articles, I’ve discussed the implications of employee compensation through fixed pay and variable pay models, as well as worker benefits such as paid time off and retirement programs. Organizations should also consider including professional development programs in their overall compensation packages.

What Are Employee Development Programs?

Professional development programs often include sponsorships, stipends and tuition-reimbursement programs to help employees cover expenses associated with their professional pursuits.

Some of these employee development programs are designed to directly address the costs of formal education at colleges and universities by covering costs for tuition, books, and other expenses involved with taking classes and earning academic degrees.

Other professional development programs are broader, allowing employees to explore development opportunities beyond the halls of academia. Examples of alternative development initiatives might include training and certification programs offered by industry associations or regulatory authorities.

The cost involved in professional development can vary widely. Academic degrees can be expensive, costing tens of thousands of dollars, whereas certification and training programs may only cost hundreds or a few thousand dollars.

Why Employee Development Programs Are a Worthy Investment

On first consideration, one might be tempted to wonder why employers would want to invest in their employees through professional development programs in the first place? After all, if we enable our employees to grow and learn beyond the requirements of their existing jobs, won’t they just resign as soon as they find a better job elsewhere? In other words, isn’t employee development really just fueling employee turnover?

Unfortunately, this kind of shortsighted thinking can lead organizations to make fatal mistakes around employee-benefit design. The reality is that 94% of workers have indicated they feel a stronger sense of loyalty to the employers who invest in their professional development, Training Industry notes. New skills or not, employees are more likely to stay put if their employer supports their upward mobility.

Similarly, succession planning is critical for every business as well. Leaders, executives, and managers will eventually retire or leave the company.

Who will be able to successfully replace them? Professional development programs give employees the skills, and a reason, to want to grow into more senior roles in their workplaces over time.

In addition to addressing succession planning challenges, professional development programs also serve to improve employee retention, morale, efficiency and productivity, according to Kaplan Solutions.

Fortunately, a fairly robust cross-section of employers recognizes the value of these programs and offers professional development benefits of one type or another. In a 2022 survey administered by the Society for Human Resource Management (SHRM), 78% of employers indicated that they offered some kind of program to help cover costs for employees to develop new skills. And 48% indicated that they offered formal tuition assistance programs for college or university classes.

Designing the Stipulations of Employee Development Programs

Of course, employee development programs are usually not completely unconstrained. For example, it is fairly common for employers to require that any professional development undertakings – be they degree programs, certificates or something else altogether – are job-related in substance, so that the employer can be assured of some direct company benefit from the training.

Suppose an employee, Frank, sells cars at an auto dealership. Now, Frank might want to pursue a degree in culinary arts, but Frank is unlikely to find an easy application for newly learned cooking knowledge in the car dealership setting.

It is probably fair for Frank’s employer to impose parameters on the kinds of development pursuits that will and will not be eligible for support and funding. Instead of culinary arts, the dealership might want Frank to pursue a degree in sales and marketing or business.

In addition, employers might require that an employee earn a certain grade point average or other metric for performance to be eligible for assistance or reimbursement. This kind of approach ensures that there is a certain minimum standard of quality to the learning that is expected to occur. So in Frank’s case, the car dealership might demand that Frank earn a grade of no lower than B or B+ in order to maintain his support and funding.

Finally, there might be a stipulation in professional development assistance agreements that requires a set number of months or years that the employee commits to the sponsoring employer after the development program has been completed – as recompense for the employer’s investment. Although 94% of employees indicate that they feel more loyal to employers who help them develop, the fact is, some employees will indeed move on to “greener pastures” when circumstances allow.

For this reason, commitments for terms of work after professional development sponsorships are fairly commonplace. In Frank’s case, his employer might stipulate that he must agree to continue his employment with them for not less than, say, two years following the completion of his college degree. If he fails to honor this requirement, he could be made to repay the employer for their investment in him. So there is a cost if Frank decided to take his newly minted college degree and jump ship.

Why Aren’t More Employees Using Professional Development Benefits?

Interestingly, despite the prevalence of professional development benefits on offer in the workplace today, only a small subset of employees actually take advantage of these kinds of programs. As of 2019, SHRM reported that less than 10% of all employees who work for employers that offer tuition-assistance programs actually take advantage of those programs. This could be for a few different reasons.

First, it could simply be that these benefits are not well advertised or promoted by employers. Employees who don’t know they are entitled to a benefit obviously can’t take advantage of that benefit.

And in spite of the myriad significant benefits of employee development programs for employers, many are still reluctant to push them. Instead of openly discussing these benefits with employees, the details of such programs are relegated to the obscure depths of some seldom-opened employee handbook.

Well-thought-out employee development programs can bring great gains for employers.

The aim of such employers in doing this is often to limit benefit program costs by reducing the number of employees who take advantage of them. But again, this ends up being counterproductive in the long run.

Among employees who are aware of professional development benefits but still decide not to enroll, one critical reason might be time limitations. An employer offering to pay for college classes is financially generous, but if an employee cannot take time off work or their other commitments to pursue a program, then the benefit itself is a moot point. This is yet another reason why flexible schedules, paid time-off programs, child-care programs and other employee work-life balance initiatives are essential complements to professional development benefits.

Finally, some employees might be disinterested in a professional development program if the requirements restrict them from pursuing the kinds of learning or training that they are most interested in. And, in some cases – such as with Frank – the employer might be within their rights to push back. However, by the same token, employers should try to remain open-minded about the possibility that development could have tangential benefits.

For example, suppose that, instead of wanting to study culinary arts, Frank wanted to study psychology. Now, is a psychology degree necessary for a car salesman? No. Is it commonplace even? Probably not.

But is it conceivable that formal education in psychology might lend itself to some advantages in a sales environment? Absolutely. Learning about human perceptions, biases, cognition and vulnerability to influence from a psychology degree program could likely make a salesperson more effective at work. So employers should not be too quick to dismiss ideas from employees about potential development paths simply because there isn’t an obvious correlation between the learning and the job at hand.

Well-thought-out employee development programs can bring great gains for employers, such as improvements in succession planning, retention, morale, productivity and other factors. But in order for these kinds of benefits to be effective, organizations must truly invest in them. 

Employee development programs must be actively promoted within the workplace and supported by other commensurate employee benefits such as schedule flexibility, paid time off and program adaptability. Those benefits will make it feasible for employees to invest time and energy towards completing their professional development goals.

Gary Deel

Dr. Gary Deel is a faculty member with the Dr. Wallace E. Boston School of Business. He holds an M.S. in Space Studies, an M.A. in Psychology, an M.Ed. in Higher Education Leadership, an M.A. in Criminal Justice, a J.D. in Law, and a Ph.D. in Hospitality/Business Management. Gary teaches classes in various subjects for the University, the University of Central Florida, the University of Florida, Colorado State University, and others.

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