A Good Value: Invest in employee development

Published On
Feb 15, 2021

Recently, I presented a webinar, “How Investing in Your Employees Pays Off.” We conducted a poll and asked the participants what their company’s No. 1 asset is. To little surprise, the overwhelming response was employees. If employees are our No. 1 asset, then why are we so reluctant to invest in them?

When it comes to equipment, we would not think twice about buying new tires or repairing our bucket truck’s hydraulics to keep it in service. However, when we look at spending money on employee development, it feels like we need to pass a law to secure the necessary funds. Would the outcome be different if we looked at employee development from a different perspective? What if we looked at employee development as an investment in our employees and, more importantly, an investment in the future of the company?

As with any investment, we want to determine the return on investment (ROI). Unlike equipment, where it is relatively easy to come up with the ROI, calculating it for employee development can be more complicated. Drawing from our own experience as managers and through conversations with other managers in the construction industry, we have identified four challenges facing managers when determining the ROI of employee development.

  • We do not know what to measure. Do we measure dollars, hours, happiness or engagement?
  • We do not know how to measure. Do we measure the money in revenue, profitability or some cost reduction? If we measure time, are we measuring efficiencies or increased capacity (doing more in the same amount of time or less), or is it something else?
  • What is the baseline to measure against? Are we comparing to a period of time, other employees, industry averages or an arbitrary number we made up?
  • We do not have a clear goal for the investment. What is it we want to accomplish with this investment in our employees? Is it improved skills, increased knowledge or possibly increased efficiencies?

As you can see, calculating the ROI of employee development is not straightforward. As the manager, you will need to determine what is important to you and your company, as well as how and what to measure. You can determine the increased value to your organization from the investment you make in your employees.


Many studies have been conducted on the benefits of investing in employees. In our competitive world, seldom do we find a win-win situation. However, investing in employees becomes a win for employees and, most notably, a win for the company.

The win for employees includes increased job satisfaction, improved morale, increased engagement, the discovery of new talents and addressed weaknesses. Company wins include increased competitive advantage, lower turnover, higher productivity, internal talent pool development and increased profits.

This brings us to our next corporate dichotomy. The CFO says to the CEO, “What if we invest in our employees and they leave?” The CEO’s response, “What if we don’t and they stay?” Who wins? Can they both be happy with the decision? I believe they can. All they need to do is provide themselves with some protection.

First and foremost, you need to get buy-in from the employee. As the manager, it is your responsibility to provide the resources for your employees to be successful. Of course, it is still the responsibility of the employees to use those resources for their success. Buy-in can be accomplished by setting clear expectations for the employee during and after the training or development.

Another successful method is to tie employee development to their performance reviews. This will help the employee see that their commitment to developing themselves and to adding more value to the company will position them for raises and other compensation or privileges for their role in the company’s success.

Finally, make employee development part of the company culture. A company culture of improvement starts at the top; even seasoned managers and owners can improve themselves. While not lacking technical skills, maybe they could brush up on engaging and motivating their employees.

Of course, not all employee development has to cost money. There are numerous low-cost or free solutions. If anything great came out of 2020, it is all the online and virtual training and development opportunities. Even if there is no outlay of money for the training or development, there is still a cost to the company. You are most likely paying the employee to participate, even if the program is free. Regardless of whether you are paying for the program or for the employee’s hourly wages, you still have an idea of what ROI you are seeking. How much value will this investment of time and money add to the company?

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