Four powerful arguments why investing in staff training gives huge returns. The ultimate business case...
Dear business leader
You’re not convinced by my pitch, so you’ve asked for a business case to justify meta skills training for our staff. You want to see some projected return on investment before you back my proposal for growing soft skills across our workforce.
My motivation was clearly not compelling nor persuasive.
Fair enough. I need to speak your language instead of mine.
First of all, let’s change the label. Soft skills are anything but soft. As Josh Bersin says, “Hard Skills are soft (they change all the time, are constantly being obsoleted, and are relatively easy to learn) and Soft Skills are hard (they are difficult to build, critical, and take extreme effort to obtain).”
So let’s call them power skills. Because they add power to our work, relationships, teams, and organizations. Or else meta skills. Because they are over-arching skills used in a variety of situations and contexts).
And let’s call this a strategic initiative. To increase company profitability by growing staff meta skills. Why? To ensure organizational future readiness, staff retention, and engagement.
Here are four powerful arguments to convince you to invest in developing meta-skills for as many of our employees as possible.
1. Build future-readiness by growing soft skills
Staying in business in the longer term requires constant rejuvenation. And that relies on bright, agile minds. People who can think out of the box. People with the skills to adapt, innovate, build connections and see fresh opportunities.
"Surprise! The skills of the future aren't technical" is an excellent article by Josh Bersin which highlights the priority that executives are placing on meta-skills such as:
Future-facing organizations put effort into building workforces that are agile, adaptive, and emotionally intelligent. Much of this is done through a conscious focus on building future-ready skills.
Giving our staff future-ready skills will give us the following distinct advantages:
To stay ahead we have to learn faster than our competition. And building meta-skills across our organization is a powerful first step to creating a more agile and future-ready organization.
2. Productivity and ROI gains
Here’s a cold hard fact. Companies that measure the impact of soft skills training consistently report productivity gains and a positive return on investment. The cost of the training is more than offset by the financial returns to the company of their investment.
Labour economics researcher Dr M.G. Staboulis indicates that businesses that invest in soft skills training for their employees grow in revenue and create better workplace environments for all stakeholders, in his paper on Worldwide approaches of soft skills training as a strategy factor of ROI growth.
Inter alia, he cites the following studies:
♦ A controlled 12-month trial of soft skills training in five different factories yielded a 250% ROI in a period of 8 months, according to a study from MIT Sloan. Yes, you read right. 250%! Productivity was boosted, complex tasks were made more efficient and employee attendance improved.
♦ A Stanford Research Institute study determined that 75% of long-term success in a job role depends on the mastery of soft skills. Whereas only 25% of that job success comes from technical skills.
- ♦ The World Economic Forum (2018) report on The Future of Jobs highlights that the top skills for the 2022 employee are all soft skill related. Top of the list are active learning, creativity, critical thinking and analysis, complex problem solving, leadership, emotional intelligence, and leadership)
Not convinced yet? Here are some bottom-line results from further studies:
♦ A Hay Group report that managers who incorporate soft skills into their leadership approach can increase their team’s performance by as much as 30%
♦ SHRM surveys cite that miscommunication costs companies with 100 employees an average of USD 420 000 per annum.
Investing in soft skills training for our staff can give us an excellent return on our investment, both in the short term and in the longer term. Once the skills have been acquired, they’re used continually in different contexts to face different challenges.
In effect, they’re evergreen skills. So, we get the productivity gains year after year.
3. Employee engagement
The extent to which an employee is emotionally committed to our organization and its goals is what we term employee engagement. It’s a concept that’s much wider than employee satisfaction.
Employees with high levels of engagement towards our organization are generally more effective. They’re healthier, take more responsibility for the success of their employer and they stick around longer.
Providing training opportunities aimed at soft skills and personal development increases employee engagement. Which, as you see, is a big benefit to the business.
1. Commitment to the company increases. This study found that training and development initiatives had a measurable positive impact on job satisfaction, organizational commitment, intention to stay, and overall employee engagement.
2. Employees perceive an increase in their ability to succeed at work: A Trend Report focused on working-age adults in the UK found that those who had completed a soft skills training course in the last 12 months were much more satisfied with their employer. They were more motivated and stated that they enjoyed their jobs significantly more.
They also stated that their performance had improved. A staggering 63% of completers said it had a positive effect on their ability to succeed at work.
3. Reciprocal investment: You look after me and I’ll look after you. Organizational psychologists frequently highlight the importance of employees feeling that they are being invested. This correlates with levels of engagement and employee retention.
Providing employees with soft skills training (as opposed to specific technical training) is a powerful signal that our organization is investing with a bigger picture in mind.
Not convinced yet?
- Here are some hard facts:
- ♦ Highly engaged business units achieve a 20% increase in sales and 10% increase in customer ratings
- ♦ Highly engaged business units realize a 41% reduction in absenteeism and a 17% increase in productivity
- ♦ Organizations that have over 50% employee engagement retain over 80% of their customers
- ♦ Companies with engaged employees see 233% greater customer loyalty and a 26% greater increase in revenue
- ♦ Companies that double the rate of engaged employees achieve, on average, 147% higher earnings per share than their competition
Organizations who actively measure employee engagement initiatives almost always report a clear link between learning and engagement. Levels of employee engagement rise after employers begin offering soft skills training. So this is an important metric to add when assessing the effectiveness of L&D programs.
If we want our employees to connect more strongly with our organization and its goals, we should provide them with soft skills training opportunities. It’s a powerful way to demonstrate our commitment and investment in them.
And research shows that this will pay dividends and boost company profits.
4. Employee retention
Remember that last employee survey? It was no different from the ones that came before. The top three issues, once again, were communication, pay, and lack of growth and career opportunities.
Our off-boarding surveys give similar results. The majority of staff who leave us cite a lack of career development as one of their areas of dissatisfaction.
We don’t want good people to leave us because they feel they don’t have a future with us. And this is not difficult nor expensive to fix. We need to provide better opportunities for staff to upskill themselves and develop their careers in a cost-effective way.
Here are some hair-raising figures from a recent Forbes article cheerfully titled The cost of turnover can kill your business:
Providing staff with power skills training to upskill themselves and build their careers start to look like a very reasonable and inexpensive way to reduce costly turnover.
Spending a percentage of annual salary on staff training for everyone to prevent turnover makes good business sense. Particularly in an unstable labour market.
I hope I’ve convinced you that investing in meta skills is not a “nice to have”. It’s a shrewd investment in our workforce which will pay significant dividends for years to come.
So, could we double the budget for this initiative? Because the more we put in, the more we get back. Like 250%.
What other investment will give you these returns?