Companies invest significant money, time, and resources in their employees to help them develop new skills. The American Society for Training and Development estimates that U.S. firms spent $134.1 billion on training and education in 2008. But this paper warns that training programs can be a double-edged sword — when employees don’t see opportunities for advancement despite their training, they are more apt to leave the company to further their career somewhere else.
The good news is that such opportunities don’t always have to take the form of immediate raises and promotions, which are in somewhat short supply these days. Supervisors can open the door to longer-range opportunities for career growth, for example, by affording employees greater autonomy and more involvement in decision making, the researchers note. The important thing is to point out a path for advancement and to do it in a way that instills confidence and loyalty. “Career opportunities are perceptual in nature, so raising [perceptions]...may be largely a matter of letting employees know more about the range of possibilities that are already available within the organization,” the researchers write.
The paper describes two forms of training: formal and informal. Formal training includes executive management programs, workshops, job rotations, and tuition reimbursement programs that allow employees to complete their degrees.
Informal training relies on personal relationships, such as career mentoring and the exchanges between supervisors and subordinates. Mentoring includes coaching, gaining exposure to more senior colleagues, and recommending a protégé for challenging assignments.
Previous research has found that both forms of training give employees access to more information and resources, leading to greater organizational and job knowledge. But when the researchers for this paper tested the effects of training on employees’ loyalty and attitudes toward the company, they found it was crucial that employees also perceive a clear path up the corporate ladder. If they do not, they might take their newfound knowledge and skills to a company that seems better able to meet their goals.
The researchers collected survey data from 264 employees at a Fortune 500 manufacturing company with headquarters in the northeastern United States. The researchers also examined 198 employee–supervisor pairs at the company. In the surveys, the employees answered a series of questions designed to measure the extent to which they had participated in company-sponsored development programs. In another questionnaire, workers answered questions about the quality of their relationships with supervisors, who in turn provided performance feedback on their employees. Turnover data on the employees was obtained from company records.
The company offered flexible internal career paths, meaning an employee could pursue a career tied to a certain function (sales, for example) or division, or move from department to department. Most of the employees had access to the same number and variety of development activities. Data was collected from several corporate areas, including production, research and development, marketing, and accounting. Plant management, sales, and service personnel were also included in the study.
One finding was that among employees who had completed a degree through a tuition reimbursement program, those who hadn’t been promoted were more likely to leave the company than those who had.
The outcome was different, however, when employees received consistent developmental support. In that case, their perceptions of desirable career opportunities at the company became deeply embedded and they were less likely to leave.
The researchers found that regular participation in seminars, training sessions, and workshops sent an important signal to workers that the organization was investing in and valuing them. Additionally, career mentoring and healthy boss–subordinate relationships built loyalty among employees. Job rotations also increased employees’ hopes of a bright future, the researchers found. Rotations allowed employees to learn about different aspects of the company and form new social contacts across the organization.
Overall, the analysis demonstrated that when employees believed that attractive career moves were possible, their participation in training programs translated into higher job performance and a greater likelihood they would stay.
Given the high costs of staffing and turnover, employee training is necessary, but only if employees perceive that their company offers career opportunities. Otherwise, the training may backfire for the company, giving employees the credentials to be hired somewhere else.
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