Skill Development and its Impact on Employee Retention

Published by MBA Skool Team, Published on September 13, 2016

In organisations today, employees’ development has become very important function of human resource management. The organisation needs to ensure that its employees are efficient and in line with the competition prevailing in the industry. To maintain and sustain these valuable resources, organisations are required to look after the job satisfaction and retention of employees.

Today most of the companies are investing a lump sum amount of money on the skill development of the employees to have a competitive edge over its competitors and be successful in the long run.

Employee development opportunities provided by the organisation not only helps the person in enhancing his skills or competencies but also leaves a strong impact on the organisational level outcomes. Enhancement of skills of the employees through training facilitates greater commitment by them towards their employer and also increases their willingness to go an extra mile for the organisation.

Image: pixabay

How do the organisations make sure that their employees are growing day by day? Career development opportunities needs to be provided to them to increase the employee retention rate of an organisation. In many organisations especially IT/ITES firms, the attrition rate is high due to lack of career and skill development options for the employees. It is reported that 42% of the employees working in top companies have reported that Career Advancement opportunities are a critical factor for job satisfaction and engagement.

Different companies provide various kinds of training and development programs to its employees to leverage their skills and abilities. It is believed that employees tend to be more productive when companies provide them training as per the requirement of their job.

Merely training programs are not enough to retain the employees. The organisation should also take care of its employees’ career aspirations and what they want to do in 1 to 3 years time frame. Managers’ facilitating the career aspirations and dreams of the employees in an organisation is a great motivation factor for them to be loyal to the organisation.

How does the organisation benefit from skill development of the employees?

According to a survey conducted by Right Management for the employees, opinion on skill and career development opportunities, following were the outcomes:-

- 82% employees would be more engaged in the work they do

- 78% employees will be more inclined to share their views and ideas

- 76% employees will be more likely to stay with the current employer

- 75% employees will be more likely to look for growth opportunities in the present organisation


Career development options within the organisation should be the first step to enhance the skills of the employees and also develop a sense of loyalty in towards their employer. Companies can develop their own personalised and unique career development programs. Many organisations now have online portals and platforms to help the employees nominate themselves for a training course or opt for an e-learning course. Developing a user friendly online resource facilitates the employee to take up the training as per his convenience to improve upon his skills. Companies should follow the 70:20:10 principle of learning to guide employees in efficient career planning where nowadays the 10% time has moved from classroom teaching to self learning.

Opening the doors for career conversations. Employees should be encouraged and motivated to have their career aspiration discussion with their superiors along with the appraisal discussions. These conversations not only gives a direction to the employees but also makes them feel valued and empowered.

Shift from career ladder to career lattice. Organisations generally have fewer opportunities for the employees to move up to the next role. But employees can be trained for sideways move from their current role. To give them the opportunity to explore the various horizontal roles within the organisation.

Dips stick measure of effectiveness of the career development programs. Every initiative is successful when the efficiency is measured. Regular evaluation is necessary to measure the outcomes if it is aligned with the expected result.

Various industry best practices on career and skill development can be implemented in organisation’s today to see a positive change in its employee churn rate.

Nowadays, mentoring as a tool is widely used across organisations to help their employees grow. Companies have been adopting methods like mentoring top talent, peer assisted learning, coaching by managers to enhance their employees’ overall development.

Reverse mentoring is another popular technique practiced in many top notch companies where a junior employee pairs with a senior employee and exchange of skills, knowledge and experience takes place. This concept was introduced by Jack Welch, former CEO of general Electric. Organisations are in practice of job rotation, job enrichment, re-skilling and redeployment to build their employees’ skills and abilities in all their company functions and roles.

Shadowing leaders program is prevalent in organisations like KPMG and Infosys where employees get an opportunity to witness the day to day activities of senior leaders. They get the golden chance to interact with their role models within the organisation and learn from their experiences in past, job related work and increase their knowledge about how skills can be acquired for defining their job.

Thirdly, stretch projects also know as bubble or special assignments to be given to the employees as it helps them leverage their skills and understanding of different job roles. These are short duration projects of 3 to 5 months given to the employees which acts as a add on in their career path and learning experience.

Employees perceive skills and competencies development as a gift by the organization as it increases their market value and helps them to be prepared for the new and challenging roles which take their career to a different level. It gives the employees’ the competitive edge over their peers outside the organization and long term benefits in terms of loyalty and retention of key resources to the organization.


This article has been authored by Shilpa Pattnaik from XIMB

The articles in this section have been submitted by our Authors. They have been reviewed & uploaded by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

If you are interested in writing articles for us, Submit Here

Share this Page on:
Facebook ShareTweetShare on Linkedin