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The long term cost of short term thinking
Underinvestment in L&D is often rationalised by a fear that developed people will gain value in the marketplace and move to a competitor.
But if developed people do jump ship, it can bring significant benefit to the organisation they leave. How?
Many commentators argue that we have moved into the collaborative or network economy, where success is driven by an organisation’s ability to leverage connections. In this new world, it’s not possible to thrive alone: you must bring others along for the ride.
This has evolved out of the knowledge economy, where protecting and safeguarding knowledge prevents others from using it to their own advantage, allowing you to emerge in front.
In the network economy, if developed employees leave on good terms, they increase the size of an organisation’s network. These employees may return to add greater value - known as boomeranging – or leverage their own network to help the organisation, such as referring colleagues for open positions.
Maintaining positive relations with these departing employees is crucial because recruitment is now a “dating game” where jobseekers value social signals, such as the opinions of ex-employees, when deciding who they want to work for.
That’s why high performing organisations invest heavily in L&D - to increase the size of their network and gain future value from it.
Organisations underinvesting in L&D risk losing employees for the wrong reason – they feel underdeveloped and frustrated and leave on bad terms. The organisation’s network fails to grow. No future value is delivered.
Alternatively, underdeveloped people become actively disengaged but don’t leave, hampering productivity with out-of-date thinking. Then you won’t have to worry about losing them to competitors - no-one else will want them.
Underinvesting in L&D also exposes the organisation to the intrinsic peril of never introducing fresh ideas: the loss of effectiveness over time.
We’ve all worked for stagnant organisations that are crying out for new ideas. We feel them crumbling from within. This environment is unattractive to jobseekers, making it difficult to hire fresh talent and increase the diversity of thought flowing through the organisation.
Meanwhile, the world is rapidly changing. People need regular development to adapt effectively. What got you to the position you’re in today will not take you to the next stage. Continuous learning and development is essential to meeting tomorrow’s challenges. This is identified and discussed in our report, "The impact of investing in people", as a key factor in driving performance.
For these reasons, L&D investment is crucial to long term success. But fear continues to drive organisations to think in the short term in the false hope of keeping talent close to their chests.
High performing organisations understand that this emotional logic is flawed. That’s why they maintain their L&D budgets, even during recessions. They do spend more money. But they stay ahead of the market. Their people stick around and remain engaged. Their teams become more effective. And they attract the very best candidates.
It’s time to replace fear with logic, invest in L&D and grow the size of your network to succeed and prosper in the collaborative economy.
Find out more:
- Download "The impact of investing in people" report.