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Learning Curves

HR Magazine, February 2005Employee development programs will become increasingly important for employers.

Several factors are making employee development programs critical in determining an organization’s success. First, the shift to a knowledge economy makes the knowledge, skills and competencies of employees the most significant drivers of company value. But because the pace of knowledge turnover is accelerating, a greater investment in skills development is required.

Though employees take on some of this burden through investment in education, the growth of specialized knowledge makes it likely that employers will need to take on more of the responsibility for specialized business training.

In addition, shifts in the makeup of the workforce itself could mean that employee development programs, especially those aimed at executive-level employees, will be judged by how successfully they develop underrepresented groups such as women and minorities.

While debate continues on the likelihood of a labor shortage as baby boomers retire, many HR professionals are growing more concerned about the possibility. In fact, the latest Workplace Forecast from the Society for Human Resource Management (SHRM) shows that HR practitioners rate preparing for the next wave of retirement as the third-most-important trend in the HR profession. Yet findings from the newly released SHRM Employee Development Survey indicate that few organizations have executive succession plans.

The survey also reveals that finding ways to tap existing talent through new forms of employee development will be critical in addressing skills shortages that may develop. The survey exposes a large disconnect between the number of women and minorities in management roles and the number in executive positions. This may indicate that current approaches to employee development are not working at an optimal level for a large—and growing—proportion of the workforce.

Finding ways to develop the talents of underrepresented groups will become increasingly important because the generations coming into the workplace are more culturally diverse—and display more educational equivalency between men and women—than the baby boomers they are replacing. Organizations that fail in this effort could have the most difficulty in dealing with labor or skills shortages.

Because employees’ supervisors are primarily responsible for staff development, greater emphasis on man-agement training may be necessary to ensure good processes for identifying high-potential employees. Interestingly, while the survey suggests that nonprofit organizations outdo for-profit companies in identifying high performers among women and minority groups and moving them up into the executive ranks, for-profit organizations are more likely to have formal programs for doing so.

Thus, the various sectors may be able to teach one another about employee development, but all will likely have to step up their efforts in this area.

Jennifer Schramm is manager of the Workplace Trends and Forecasting program at SHRM.


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