Employee Training Programs Are A Big Deal At Some Of America's Biggest Companies; Here's Why
The following is a contributed article from a content partner of Benzinga
For the last 23 years, Fortune Magazine alongside people analytics firm, Great Place to Work have been publishing the 100 Best Companies to Work For list. The list is derived from what is considered America’s largest ongoing annual workforce study and more than 4.1 million employees participated in the study in 2020. The study contains 60 survey questions in which employees describe how their experiences at their workplaces help them trust their employers and to reach their full human potential.
For companies investing in employee training and professional development programs, the upfront investments in time and money often yield significant returns in the long run in terms of low employee turnover, enhanced employee capacity, and hours saved from firing and re-hiring. In this post, I examine how many of America’s biggest publicly traded companies are in a constant battle to outdo one another in making their workplaces places of learning and professional development.
Employees are the most important assets of any company
Ensuring that employees get access to quality and consistent professional development programs could be the bedrock for having competent employees and ensuring high company morale. Hence, it is not surprising that some of the worlds biggest companies such as Mastercard Inc. (NYSE: MA) and Goldman Sachs Group Inc. (NYSE: GS) invest hundreds of millions of dollars into the professional development of their employees.
For instance, Goldman Sachs starts off professional development for its employees with a New Analyst program where undergraduate and graduate students in their final years of study can apply. Once enrolled in the program, the students can expect to gain access to resources, skills, and networks that could potentially get them started in the company. Junior employees can then go on to access more educational resources in the Goldman Sachs University program where they can “focus on building foundational professional and technical skills.
Similarly, MasterCard also invests heavily in the professional development of its employees. The “MasterCard Launch” program, for instance, is designed to expose recent graduates to opportunities to enhance their professional skills, receive mentorship, and network. MasterCard also has an in-house MBA program where junior employees participate in a rotational leadership program across several business units of the company.
The investments that Goldman Sachs and MasterCards make in their employee, in turn, impacts the quality of service that those employees deliver and it is not surprising to see the value of the stocks of MasterCard and Goldman Sachs rising by more than 300% and 100% respectively over the last five years as seen in the chart above.
Stiff competition among some of America’s biggest companies in employee training
The quest to invest heavily in employee training programs is very competitive among some of the world’s biggest companies and no company can afford rest on its laurels. Consider the case of Google’s parent company, Alphabet Inc. (NASDAQ: GOOG), which was number 1 on Fortune’s list of 100 Best Companies to Work For in 2016 and 2017. By 2018, the company had been knocked off the top 10 spots and it hasn’t managed to come back up in 2019 and 2020.
Hilton Worldwide Holdings (NYSE: HLT) has maintained the Number 1 position on the list of 100 Best Companies to Work For in both 2020 and 2019; the 2020 achievement is particularly impressive when you consider the fact that the world was practically in a lockdown for much of 2020 and the hospitality business in which Hilton operates was one of the hardest-hit industries. However, 3 years ago in 2018, Hilton wasn’t anywhere near the top 10 on the list.
Salesforce.com Inc (NYSE: CRM) is another example of the stiff competition among America’s companies to provide the best professional development programs to their employees. In 2020, Salesforce was Number 6 on the list of 100 Best Companies to Work For, but one year earlier in 2019, it was Number 2 on that list, and in 2018, it was Number 1 on that list.
In 2018, Workday, Inc. (NASDAQ: WDAY) was Number 7 on the list of 100 Best Companies to Work For, in 2019 it had moved up to the Number 4 position before dropping to Number 5 in 2020. Similarly, Cisco Systems Inc (NASDAQ: CSCO) wasn’t anywhere near the top 10 on the list of 100 Best Companies to Work For in 2016, 2017, or 2018; however, by 2019 the company has pushed itself to number 6 on the list and by 2020, it had climbed up two more rungs to the number 4 position.
However, it would be simplistic to assume that there’s any straight correlation between the share price and revenue trajectories of the companies mentioned above. The chart above merely presents the growth in their share prices and quarterly revenue for informational purposes and more research will be necessary to unearth if there’s any direct relationship between the two variables.
Here’s why enterprises are committed to employee development programs
Probably the first reason why many enterprises are committed to employee development programs is that the presence of such programs helps them to attract and retain great talent. However, attracting and retaining great talent is not an end in itself, the end goal is that enterprises with professional development programs be more attractive to high-performant talents who, in turn, produce provide an edge that helps the company to outpace its competitors.
Secondly, employee development programs can have measurable financial cost-saving benefits for the company. To start with, effective professional development programs empower employees to become multiskilled and to apply their expertise and experience into new areas of the business. Hence, the company ends up having a pool of talent with a diversified skill set to perform a wide range of functions and to transition into different roles instead of the traditional model of hiring people for specific job functions.
Lastly, employee development programs can help an organization entrench a culture of innovation. These professional development programs can ensure that the company’s workforce is abreast of emerging trends and changes in their industry. By keeping up with such changes, incumbents can lead the charge for innovation within instead of being stuck with the status quo and losing market share to more nimble and daring startups.
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