In an increasingly competitive global business environment, companies are fighting tooth and nail to attract elite talent. Yet even as salaries balloon and benefits become more luxe, companies increasingly struggle to retain top talent.
As a report from the Bureau of Labor Statistics shows, the average time an employee spends at a single company is quickly shrinking. While the average tenure of employees in their mid-50s is roughly 11 years, the average tenure of employees below age 36 before moving to another company is only 3.2 years. Talented employees, particularly in the early stages of their careers, increasingly feel free to experiment with different companies and career paths.
A recent Toptal Insights article delves further into this trend. Quickly moving from job to job has historically hurt an employee’s long-term career prospects. But now, the article says, “such behavior seems to accelerate career advancement.” This results in part from rapid technological shifts in the workplace. As technology evolves, skills quickly become obsolete. Bersin, a research publication focused on HR issues, notes that this process takes anywhere from 2.5 to 5 years – a timespan that neatly corresponds to the average tenure of a young employee at a single company. When employees feel their skills growing stale, they often move on to new opportunities.
This trend comes through in both aggregate data and anecdotal evidence. A survey Toptal conducted on its talent network found that “Growing and Being Challenged” was a highly valued work attribute, only barely behind having a flexible work structure and working with great companies.
How should companies respond? Hiring new employees is costly, and investing in talent often doesn’t yield a positive return until years down the road, by which time many employees have likely already left.
At Toptal, we have found that a key to retaining high caliber talent is to invest in educating and training employees on a continual basis. Through workplace education, companies can challenge their employees intellectually, keep employees’ skills relevant, and foster a greater sense of company loyalty that pays dividends down the road.
How Does Education Benefit Talent?
Employees need to feel consistently engaged and challenged. While job descriptions may not continually change, employees can’t drift into complacency. This is particularly true with regard to talent at the highest levels. If highly talented employees aren’t consistently challenged to learn new things and grow, they simply won’t stick around very long.
Burnout doesn’t just happen from exhaustion; it also happens from a lack of stimulation.
Investing in training and workplace education programs combats this issue. As a recent Toptal Insights article has shown, giving talent the ability to intellectually stretch themselves keeps them fresh, motivated, and engaged. Burnout doesn’t just happen from exhaustion; it also happens from a lack of stimulation. Formalized training programs can help hardworking employees avoid this fate.
Workplace education programs can also allow employees to gain new skills and develop a more holistic view of how the company operates. For example, teaching software engineers about the business functions that they support, and teaching salespeople how to handle client experience tickets, can give each group a greater appreciation for how the business works and how each team fits into the bigger picture. This kind of cross-functional training also helps teams work more effectively together, as allowing teams to teach each other can promote a culture of collaboration and problem solving.
Toptal has leveraged workplace education as a tool in employee retention for years with the Academy series – a program designed to equip developers with the skills necessary to thrive in a range of emerging areas, including blockchain, DevOps, and education technology. Jay Johnston, a React Developer at Toptal, says that having access to ongoing learning opportunities can determine whether a “job” ultimately evolves into a “career.”
“I know the importance of education for myself and others. I know the importance of an employer growing its people,” he says. “I feel like my great relationship with Toptal is heightened in value from being able to learn new skills and interact with leaders and peers at Toptal.”
Finally, workplace education programs can keep employees’ skills relevant in an ever-changing technological landscape. One engineer in Toptal’s network with 30 years of experience recently found that his skills, though highly developed, were becoming obsolete. Through enrolling in Toptal’s Blockchain Academy, he was able to apply his technical knowledge to a field in high demand. By embracing additional training, employees across the experience spectrum can stay at the cutting edge of their fields.
How Does Education Benefit Companies?
What’s good for employee happiness, engagement, and longevity is usually good for companies as well. Indeed, employees who are motivated to learn and collaborate will be more likely to go the extra mile and work more productively. There are other practical benefits to education programs that companies should consider as well.
New hires are expensive, risky investments. In such a competitive environment, elite talent doesn’t come cheap, and each new employee represents a huge gamble. No matter how thorough and rigorous an interview process may be, a company simply can’t know whether a new hire will be a good cultural fit until at least a few months on the job. Even if an employee is a good fit, she may not yield a positive ROI for the company if she leaves within three years.
Employees are far more likely to make a long-term investment in the company if the company makes one in them.
Investing even more capital into employees through workplace education programs may seem counterintuitive. But giving employees an outlet to challenge themselves and gain new skills fosters long-term goodwill and loyalty. Workplace education programs constitute tangible evidence of a company’s investment in its employees’ current and future prospects. Beyond simply providing good salaries and benefits, consistent training is a powerful signal that the company cares about its employees’ long-term success. Employees are far more likely to make a long-term investment in the company if the company makes one in them. Data corroborates this point, as Guild Education – a company specializing in employee retraining – has found that employee retention has increased by 20 to 40% in companies that start offering employee education programs.
Still, companies will always face turnover, and education programs can also act as a hedge against employee attrition. Through training employees across the organization in a range of fields, companies can create redundancy, meaning that multiple people have a common skill set and knowledge base. If one employee leaves, another can fill the gap.
What Kind of Education Should Companies Provide?
Creating an effective workplace education program is a series of balancing acts.
For one, a company must balance teaching both technical skills (accounting, coding, etc.) and soft skills (empathy, leadership, etc.). This can be done in a number of ways. In one approach, companies can teach these skills in tandem, which can save both time and money. The drawbacks, however, are that employees will likely not gain either type of skill in the level of depth they would if each were taught in separate courses, and that a single course risks prioritizing one type of skill over the other. Teaching technical and soft skills separately, while costlier, gives each skill its proper due.
Balancing what will prove useful to the company and interesting to employees may be the most difficult aspect of establishing an effective education program in an enterprise context.
Toptal’s Academy program, for example, emphasizes both technical and soft skills separately. In addition to training engineers in highly technical areas like blockchain and DevOps, the Academy program also includes courses in soft skills, such as public speaking. The Speakers Academy aims to equip Toptal talent with the confidence and public speaking skills required to become thought leaders at meetups and conferences, as well as pursue teaching their own courses in their area of expertise. Graduates can then move into the Speakers Network, where Toptal helps them attain further professional speaking engagements.
Workplace education programs must also balance the needs of the business and employees’ personal interests. Too much emphasis on the business side – such as OFAC or GDPR training – may be dry and uninteresting for employees and could prove counterproductive, fostering resentment rather than goodwill. Too much emphasis on personal interests – subsidizing a software engineer’s photography lessons, for example – can yield a negative ROI. Balancing what will prove useful to the company and interesting to employees may be the most difficult aspect of establishing an effective education program in an enterprise context.
There is also the question of whether a company should establish and manage education programs in-house, or whether it should provide education as a benefit in the form of a stipend. Companies like O’Reilly Media can provide an effective middle ground, serving as intermediaries that allow companies to track employee performance and the program’s ROI, while providing employees access to a wide range of courses. Conversely, companies can establish proprietary training programs targeted at specific skill-sets, as we have done at Toptal.
Regardless of which path a company chooses, providing access to continual education will be a boon to employee satisfaction and company culture. To stay ahead of the pack, and to keep their best employees satisfied, companies must facilitate lifelong learning.