Develop Workers—And Your Business

Nation's Business, Dec, 1998 by Michael Barrier

Helping your employees develop in their jobs can add to your business success. Doing so involves a lot more than formal training.

A fast-food franchisee was having trouble getting his young employees to arrive at work on time. The franchisee knew that the work schedule was important to the employees--many of whom were in school. However, the schedule was set by the assistant manager, and the employees had to fit themselves to it. If there was a conflict between work and a class, that was the employee's problem to solve.

The solution: Align the employer's needs with the employees' needs. The employees with the best attendance records got the first choice of times to work. The attendance problem evaporated.

Bob Nelson, the San Diego-based author (1001 Ways to Energize Employees, Workman Publishing, $10.95) and consultant who came up with that solution, suggests that the employees who were showing up on time were bringing changed attitudes with them as well. "As you give people more sense of control," he says, "you get more commitment and involvement."

Employers need to think about "employee development" in terms of such initiatives, Nelson believes, with formal training only a small part of the mix. "Ninety percent of all development occurs on the job," he says.

It may be tempting to think about employee development mainly in connection with jobs that require specialized skills or advanced degrees. But for all the talk about such "intellectual capital," says Wayne Outlaw, a consultant in Mount Pleasant, S.C., "a lot of people aren't in intellectual-capital businesses."

Outlaw, the author of Smart ort Staffing (Upstart Publishing, $19.95), points out that almost all employers do need human capital--specifically, they need people who are willing to work. In modern farming, for instance, money in the bank and up-to-date equipment are of little value, he says, "until you put somebody in that equipment to till the soil."

What employers should try to develop in their employees, he says, is "the ability to think and solve problems"--a skill that can be cultivated like any other.

The message from Outlaw and other people who deal with such questions is that employees can bring to jobs of any kind an enthusiasm and creativity that make the work increasingly satisfying to the employee--and that make the employee increasingly valuable to the employer.

It may be easier for small companies "to sup port and facilitate creativity," says Teresa M. senior associate dean for research at Harvard Business School. "Large corporations seem to be much better breeding grounds for creativity-killers."

At a large company, she says, there's a greater risk that someone will feel that their work is unimportant and unappreciated or that they are being overwhelmed by bureaucracy. "It's much more likely, in a small company," she says, "that an individual will feel that other people know what they're doing and care about it."

Amabile agrees with Nelson that, as she says, "most skill development happens through the assignments that people get." Here again small firms have an advantage. "It's always difficult to match people well to the work," she says, "but it's much more likely in a small company that you'll be able to really know what people's skills are, what their capabilities are, and what their interests are."

Paying attention to employee development--and the job satisfaction that comes with it--is particularly important to small companies in the current job market.

Even with a slowing economy, it's unlikely that small companies will soon have their pick of sparkling prospects. Retaining good employees is vital in such an environment, but losing strong performers is always costly

"The impact is tremendous if an employee walks out," Outlaw says. "People talk about the impact of turnover in large corporations, but what if your business has four employees and one leaves you? Who's going to do the work?" Rob Duboff, a vice president of Mercer Management Consulting in Lexington, Mass., says: "The math [justifying employee-retention efforts] isn't that hard. It's just a matter of thinking the costs through."

Besides the obvious costs involved in hiring and training new people--even when the training is on the job-"in some businesses you have the cost of customer relationships that are rent asunder," as with a bank that loses a loan officer whose customers may feel cast adrift, says Duboff.

Service industries such as banking are particularly vulnerable to disruptive effects on customer relationships. In such industries, Duboff says, "there has to be a match between your employees and the customer," a match that gets harder to achieve as turnover increases.

"The cost of keeping people--even if you have to spend money to train them, and to make them feel better about what they're doing--is minor" compared with the cost of replacing them, Duboff says.

Employers may fear that if they help their employees develop new or improved skills, those employees will leave them for higher-paying jobs. Nelson believes the contrary is true: "The more you give them in their current job, the more likely they are to want to stay, because they come to realize they're in a special place, with management looking out for them. They'll think twice about leaving, even for more money."