Business Leadership: Employee Development

Employee development (ED) involves a whole range of activities designed to improve the productivity of an employee in one way or another. It includes on-the-job and off-the-job training, general or specific education, potential for leadership evaluations and so forth. There are two vital questions for business leaders to ask when deciding whether they should pursue ED: first, is the possible increase in productivity really a part of the core competitive advantage of the company; second, is it more economical to develop a specific existing individual or to buy in a new employee already equipped with those skills?

These can be very difficult questions to answer because, especially in the case of small companies, they often devolve to decisions about individuals and, perhaps, individuals who have been long-term employees and with whom the leader has a personal relationship. As is well-known, younger people are generally cheaper to hire in most (but not all) countries, more able to learn new skills and competencies and are likely to begin employment armed with a range of skills concerned with new technology that older employees may find it difficult to obtain. If the leader decides, therefore, that an important part of the competitive advantage of the organization is to upgrade IT skills, then it is likely to be cheaper to hire new, young staff at entry-level salaries than to improve the quality of existing staff. The potential this has for disaffection among existing staff is, therefore, obvious. Careful consideration is of course required when making the relevant decisions.

From the perspective of the individual, meanwhile, these issues stress the importance of self-starting lifelong earning for those involved in organizations that demand technical competencies. In the USA, it is quite common for people to expect to improve themselves but it is quite unusual in other countries. In most of Europe, for example, the state provides some ED for employees at its own expense from which companies benefit but, in return, those companies are expected to maintain employment as much as is possible and provide decent salary and working conditions. In East Asia, states provide power and resources to companies to conduct ED in-house: when that happens, it is clearly sensible for companies to maintain those employees in their own companies rather than let them leave and take their skills elsewhere. That is one reason why Japan and South Korea have so many corporate employees who work for one company for their whole career.

This raises another issue: many employers are reluctant to provide ED to women on the basis that their money and time will be lost if the woman becomes pregnant and leaves employment for a period or permanently. This issue will be considered in a separate article.