L&D has long been important on both a personal and an organisational level. The reasons for this are self-evident: of course ongoing learning, development, and growth are important. However, in recent years, L&D has evolved beyond merely being important. These days, L&D is essential.
Gone are the days where having an L&D strategy was an optional extra. Instead, a strong L&D team is now fundamental to sustained organisational success. In other words, L&D has gone from a ‘nice to have’ to a ‘need to have’.
We’ve decided to track this evolution, detailing why L&D has gone from a ‘nice to have’ to a ‘need to have’. From improving ROI to closing the skills gap, we’ll look at four reasons why L&D is now essential.
Let’s start with the bottom line first: ROI. While a pure love of learning is wonderful, ultimately, a successful L&D strategy must prove its value via ROI. Luckily, investing in L&D is one of the most surefire ways for businesses to increase their ROI and overall profitability.
In most cases, the more you invest in your L&D program, the more you are likely to be rewarded. For example, companies that provide comprehensive training programs have a 218% higher income per employee. Likewise, companies that invest in L&D have a 24% higher profit margin than those that spend less on training.
That’s not all, as 42% of companies enjoy an increase in profits after investing in digital learning. IBM puts this into perspective, finding that every dollar invested in online learning results in $30 worth of productivity. IBM’s study also found that well-trained employees increase their productivity by 10%.
Accordingly, it should come as little surprise that 72% of organisations say they gain a competitive advantage by investing in digital learning.
Given these numbers, it’s easy to see why L&D has gone from ‘nice to have’ to ‘need to have’ among the most profitable organisations.
In a highly competitive professional marketplace, an engaging L&D strategy is essential to attract and retain the best talent. In fact, 94% of employees would stay at a company longer if it invested in their learning and development.
Not only that, but many employees say that learning and development opportunities are a more decisive factor for remaining in a job than receiving a raise. According to Forbes, 56% of employees say that career growth and opportunity is more important than salary.
In addition, 87% of millennials value learning and development in the workplace, while a further 59% claim development opportunities are extremely important when deciding whether to apply for a position.
Perhaps most decisively, 76% of employees say a company would be more appealing if it offered additional skills training.
These statistics are notable on several levels. Firstly, the majority of prospective employees value learning and development highly. As such, it is vital to have a strong L&D plan to attract the best talent.
Secondly, L&D is essential for talent retention. Work Institute's 2018 Retention Report found that nearly one-third of all turnover was due to either unsupportive management or a lack of development opportunities. Work Institute also found that 77% of that turnover is preventable. Given the costly nature of turnover, offering learning and development opportunities to support staff is a far preferable option.
Finally, L&D can have a major impact on employee engagement. 74% of employees aren’t reaching their full potential due to a lack of learning and development opportunities. Given this, Rapt Media finds that $500 billion is lost annually because of employee disengagement.
On the other hand, 42% of workplaces where employees are engaged with L&D also say their employees are highly engaged overall. Companies with more engaged employees outperform those with disengaged employees by up to 202%.
A strong learning culture is also essential to promote a diverse and inclusive workplace. As we detailed in our recent article on supporting neurodiversity in digital learning, L&D teams play a vital role in promoting neurodiverse workplaces.
Estimates find that about 18% of the population have neurodiverse learning needs. Thus, it is critical to support neurodiversity in the workplace to ensure a secure, accessible learning environment for everyone.
When L&D teams actively support neurodiversity, the results can be incredible. For example, one study by SAP found that “teams who have colleagues with autism report a rise in patent applications, innovations in products, and an increase in management skills and empathy.”
Additionally, companies with robust D&I programs are 22% more likely to be seen as industry leaders with high-calibre talent. Likewise, high-impact learning cultures (the top 10% of organisations) are 2.4x more likely to embed the principles of diversity and inclusion into their daily work than ‘average’ L&D teams.
As these figures demonstrate, a well-developed D&I program can take your L&D team to the next level. As such, L&D is not only essential on a strategic level but also on an interpersonal level. By supporting neurodiversity, businesses can cultivate more understanding, innovative, and inclusive learning environments that encompass the spectrum of human experiences and perspectives.
Finally, L&D has become an essential tool to help businesses close the skills gap. As we have emphasised in previous articles, the global skills gap is widening. As always, L&D teams have a central role to play.
According to PwC Australia, 75% of Australian CEOs are concerned about the availability of key skills, a sharp increase from 58% the previous year.
Similarly, a new study by RMIT Australia found that one in four Australians don’t have the skills they need to complete their day-to-day job — let alone the skills necessary for jobs of the future. Further estimates find that 54% of the global workforce will require extensive upskilling or reskilling by 2022.
RMIT’s report also found that the average Australian needs 18 unique skills to meet their employer’s requirements. However, on average, people are missing two of these skills.
Currently, RMIT finds that the biggest skills gap in Australia is in data analysis. Of those that need data analysis for their job, 30% say their skills are outdated or not at the level required.
So, where do L&D teams come in? As RMIT’s study finds, L&D will be a crucial factor in closing the skills gap. According to their report, Australians are eager to learn and close the skills gap — they just need access to the right learning and development opportunities.
To demonstrate this, 38% of Australians would prefer paid study leave over a promotion, while 52% value a learning culture over a fun culture at work. Perhaps most staggeringly, nearly one quarter (24%) would rather have $1,000 to spend on training every year than $50 of extra pay each week.
The message is clear: Australians want access to learning and development tools to help close the skills gap. Unfortunately, 66% say they face at least one barrier to learning at work, with the most common barriers being ‘learning isn’t available in times or ways that suit me’ (23%) and ‘I don’t know where to start in terms of learning’ (17%).
Ultimately, L&D teams that can remove these barriers to learning will play a vital role in closing the skills gap.
Is L&D essential to your team? Go1 can help. Sign up for a free trial today to access dedicated courses on Employee engagement essentials, Understanding mental health in neurodiverse learners, and many more.
For more insights, be sure to read our article on what sets high-impact L&D teams apart, and also subscribe to the Go1 newsletter to stay on top of all the latest L&D trends. Or, you can book a demo today.