Running head: INVESTING IN EMPLOYEES 1
Investing in Employees
Liberty University
INVESTING IN EMPLOYEES 2
Employee Investment
All organizations want to attract and retain the best qualified employees on the market.
Companies who fail to invest in their employees and fail to keep them motived will in turn have
lost productivity and have high turnover rates. The purpose of this research is to discuss the
importance of investing in employees. Misra (2018) states, there is almost $7 trillion in lost
productivity throughout the world every year. If an origination wants to retain highly qualified
employees, they have to go above and beyond to find what employees want and work hard to
deliver it. Employees who feel like their organization invests in them are happier, more
productive, and less likely to leave.
Investing in Employees
Having high turnover rates can be very costly to an organization. Hiring a new employee
can cost an organization up to twice the employees annual salary. About eighty five percent of
people are not happy with their current job (Misra, 2018, para. 1). Organizations who invest in
their employees through training programs, education reimbursement, leadership training and
through development programs are more likely to create and retain highly qualified employees.
When employees are engaged and happy with their employer, the organization will also gain a
positive reputation within the market place. An organization that has a positive reputation and
has high employee retention rate will also attract highly qualified candidates from other
companies.
One of the most common ways an organization can invest in their employees is through
training programs. According to Haymann 2010, “Companies can reap tremendous benefits by
offering training to their employees, most directly by improving their workers’ job-related skills
and productivity” (p. 105). Offering training programs allows employees to improve job-related
INVESTING IN EMPLOYEES 3
skills and have the opportunity to move around within the organization. When an employee has
the opportunity to learn and move around, they are less likely to leave the organization. Training
programs also allow employees the opportunity to strengthen their job-related skills. When job
related skills are strengthened the employee preforms better and the company is more profitable.
Organizations who offer education reimbursement have a unique opportunity to keep
employees motivated to improve skills and move up within the organization. Getting a collage
degree can cost upward to Sixty Thousand dollars. Employers who are willing to offer tuition
reimbursement have to opportunity to attract and retain employees. Many times, lower skilled
employees are viewed more as expendable than an asset. According to Kuvaas & Dysvik, “when
organizations invest in their employees, employees tend to reciprocate in positive ways” (2009).
Providing an education tuition reimbursement program allows employees to prepare for their
next desired job within the origination while not going into debt. Education tuition
reimbursement programs also allow employees who hired into a company with a college degree
to further their education with a graduate degree. Higher education can be very beneficial and
rewarding for an organization because it provides advance skills for their employees.
A development program is a great way for an organization to adopt cultural changes and
to drive continuous learning for employees. Creating a culture where employees are encouraged
to continuously learn benefits an organization because employees are engaged. Organizations
that have a “perceived investment in employee development have greater obligation by
employees toward the organization and, in turn, a willingness by employees to work hard to
increase the organization’s effectiveness” (Lee & Bruvold, 2003). Employees who strive to
contentiously learn are an asset to an organization because they have a willingness to adapt and
excel within their career field. A development program does not have to be costly for an
INVESTING IN EMPLOYEES 4
organization. The main goal is to have face to face interaction with employees and allow them
develop into the employees they desire to be. Mangers have an opportunity to recognize current
skills and skills needed to fill gaps within an organization with a development program.
An organization can also offer leadership training to help keep employees engaged and
committed. Having a leadership training program allows an organization to fill gaps in their
current or future employment needs by hiring within their current talent pool. Leadership training
programs also help to boost employee engagement because employees have advancement
opportunities. According to 4 Reasons to Invest (n.d), “Organizations that invest in leadership
development perform better than those that don’t”. Having a leadership training program benefits
an organization because current employees are already familiar with the company’s values and
goals. Leadership training programs also have a positive impact on an organization bottom line.
According to 5 Reasons to Invest (n.d.), “Companies that invest in leadership development
deliver stock market returns five times higher than the returns of companies that place less
emphasis on human capital”. Employees who want to join a leadership training program are
more likely to stay and grow with the organization.
Conclusion
According to Phillips (2005), many executives today are choosing not to invest in their
employees and are cutting funding for such programs. Hiring employees can costs an
organization on average twice the employee’s annual salary. Organizations that want to keep
their costs down and turnover rates low must find a way to invest in their employees.
Organizations who invest in their employees through training programs, education
reimbursement, leadership training and through development programs are more likely to create
INVESTING IN EMPLOYEES 5
and retain highly qualified employees. The bottom line, when an organization invests in their
employees they have lower turn over rates and are more profitable.
INVESTING IN EMPLOYEES 6
References
4 Reasons to Invest in Leadership Development. (n.d.) Retrieved from:
https://www.ccl.org/articles/leading-effectively-articles/hr-pipeline-4-reasons-to-invest-
in-leadership-development/
5 Reasons to Invest in a Leadership Development Program. (n.d.) Retrieved from:
https://brendamarreropr.com/5-reasons-to-invest-in-a-leadership-development-program/
Heymann, J. (2010). Profit at the bottom of the ladder : creating value by investing in your
workforce /. Boston, Mass. :: Harvard Business Press
Kuvaas, B., & Dysvik, A. (2009). Perceived investment in employee development, intrinsic
motivation and work performance. Human Resource Management Journal., 19(3),
217– 236.
Lee C., & Bruvold, N. (2003). Creating value for employees: investment in employee
development. The International Journal of Human Resource Management, 14:6,
981- 1000.
Misra, P. (2018). Investing in Your Employees Is the Smartest Business Decision You Can Make.
Retrieved from: https://doi.org/10.1111/j.1748-8583.2009.00103.x
Phillips JJ. Investing in Your Company’s Human Capital : Strategies to Avoid Spending Too
Little--or Too Much. New York: AMACOM; 2005.
