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The Benefits of Investing in Employee Skills Development

7 min read
The Benefits of Investing in Employee Skills Development

Most organisations are more likely to invest generously in areas with tangible, immediate returns rather than those that produce less obvious, longer-term ROI. As a result, one of the areas that often falls to the bottom of the priority list is employee skills investment.

Employee skills aren’t something that can be built overnight. Investment in this area of talent management is an ongoing and gradual exercise, but improving employee skills significantly rewards those employers that do make it a key focus; the CIPD has proven that the skills and capabilities of the workforce are vital to economic sustainability and growth.

Of course, employees need to have self-motivation and a willingness to learn. But to start with, development initiatives require patience and foresight from senior leadership.

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What Does Employee Skills Development Mean?

Employee skills development refers to the process of improving an employee’s knowledge, abilities, and competencies to enhance job performance and productivity. Skills development aims to provide employees with the necessary tools and knowledge to perform their roles effectively, as well as to equip them with the skills needed to meet the changing demands of the organisation.

According to research by McKinsey, 94% of the workforce doesn’t have the skills they will be required to have by 2030 to perform their jobs well. It appears the UK’s workforce will require significant up-skilling and re-skilling to remain effective.

The Benefits of Skills Development

Making your employees better at their jobs is a win-win. Here are some of the key benefits of investing in employee skills development:

Improved Job Performance

Investing in skills development can help employees to perform their roles more effectively and efficiently, leading to improved job performance. By providing employees with the necessary skills and knowledge, they can better understand their responsibilities and contribute to the organisation’s success. This can also result in fewer mistakes and a reduction in the time taken to complete tasks, leading to increased productivity and cost savings for the organisation.

Increased Employee Satisfaction and Retention

Investing in employee skills development can lead to increased job satisfaction and employee retention. A survey by LinkedIn found that 94% of employees would stay at a company longer if it invested in their development. Employees who feel that their organisation is invested in their professional development are more likely to feel valued and satisfied in their roles. Additionally, providing opportunities for employees to learn and develop new skills can also help to keep them engaged and motivated in their work.

 The Benefits of Investing in Employee Skills Development

Enhanced Innovation

Skills development can also lead to enhanced innovation within an organisation. By providing employees with new knowledge and skills, they can approach problems from a different perspective and contribute new ideas and solutions to the organisation. This can lead to increased creativity and innovation, which can help organisations stay one step ahead of the competition.

Improved Organisational Agility

In today’s rapidly changing business environment, organisations need to be agile and able to adapt quickly to new challenges and opportunities to ensure they stay ahead of their competitors. A report by McKinsey & Company found that companies that invest in employee training and development are more likely to outperform their competitors. By providing employees with new skills and knowledge, they can adapt to new roles and responsibilities, as well as a changing market.

Essential Soft Skills Employers Should Develop

Soft skills are a set of personal attributes and traits that enable individuals to effectively interact with others in various social and professional settings. Unlike hard skills, which are specific and measurable, soft skills are more difficult to quantify but are equally important for success in the workplace.

Let’s take a look at some top soft skills that employers should develop in their employees:


This is arguably the most important soft skill of them all. After all, we all communicate every day – be that in person, via video call or even in writing. Communication skills refer to both written and verbal communication, as well as the ability to actively listen and respond accordingly. Effective communication is crucial in the workplace. It’s so important that employees are able to communicate effectively with stakeholders at all levels for an organisation to operate well.

Time Management

Another important soft skill is time management. Time management refers to the ability to manage and prioritise time effectively to achieve personal or professional goals. It involves planning, organising, and scheduling tasks or activities within a specified timeframe to maximise productivity and efficiency.

According to a survey by the CIPD, UK workers who receive time management training are able to increase their productivity by an average of 17%. This increase in productivity can translate into time savings for employees and the organisation as a whole.

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Problem-solving skills are essential and involve critical thinking skills, analysing a situation, identifying challenges or obstacles, and finding effective solutions to overcome them. Business is never plain sailing and organisations require employees who can identify problems and find solutions to them. One word… ‘pivot!’.

Interpersonal Skills

Interpersonal skills, also known as people skills or social skills, are an important set of soft skills that allow individuals to communicate effectively and build positive relationships with others. This skill is also connected to emotional intelligence, which is a great ability to have in the workplace. Emotionally intelligent employees will be able to understand and manage their own emotions, as well as read and respond appropriately to the emotions of others.

Collaboration and Teamwork

Collaboration and teamwork skills are essential for success in many roles. These skills refer to the ability to work effectively with others toward a common goal. Employees need to be able to work effectively with their colleagues and contribute to team goals. Organisations with employees that work in silos will have a disjointed and stilted feel. Collaboration builds creativity and great workplace culture.


Leadership skills are not only important for employees who are in leadership roles, but those who aspire to become leaders too. Leadership competencies include the ability to motivate and inspire others, delegate tasks effectively, and make informed decisions. Developing leadership skills in employees is a great way to support succession planning.

Adaptability and Flexibility

In today’s rapidly changing business environment, employees need to be able to adapt to new roles and responsibilities, as well as changing market conditions. Adaptability and flexibility skills include the ability to learn new skills, adapt to change, and work effectively in a dynamic environment.

The Benefits of Investing in Employee Skills Development

Essential Hard Skills Employers Should Develop

Hard skills refer to specific technical abilities and knowledge required to perform a job. These are measurable and quantifiable skills that are typically developed through education, training, or experience, and can be easily measured through tests or assessments.

It is important to invest in hard skills because they are essential for performing specific tasks and job functions. Employers require employees with the relevant technical skills to perform their jobs efficiently and effectively, and to achieve the organisation’s goals. Moreover, having a strong set of hard skills can help individuals advance their careers and increase their job security.

Some examples of hard skills in the workplace include:

Computer skills

We live in a digital age and proficiency in operating computer software and hardware is essential. Computer skills include Microsoft packages such as Word, Excel and PowerPoint or how to use emails. For instance, word processing is one of the most important skills required by many organisations. This is typically second nature to Millenials and Gen Z, however, some of the older generations may need development in this area.

Data analysis

Data analysis skills refer to being able to collect, analyse, and interpret large sets of data using various tools and software. Being able to do this is essential for making informed, data-driven decisions. Data analysis skills can be applied in every industry. For instance, every organisation will need to assess their accounts information, which would require data analytical skills.

Technical skills

Technical skills refer to knowledge of machinery, tools, and equipment used in a specific job or industry. For example, knowledge of scientific principles and laboratory techniques is required in scientific research. These skills are essential for the day-to-day running of an organisation.

Identifying Which Employee Skills To Invest In

Let’s look at some practical steps organisations can take to improve employee skills in the workplace:

1. Conduct a skills gap analysis

A skills gap analysis involves identifying the skills and knowledge required for each role within an organisation and comparing this to the current skills and knowledge of employees. By conducting a skills gap analysis, organisations can identify the areas where employees require additional training and development. This can help to ensure that training initiatives are targeted and effective and that employees receive the skills they need to perform their roles effectively.

The 9 box grid is a performance management tool that helps to identify competencies and generates data to make informed decisions about employee development.

2. Develop training plans to address skills

Once skills gaps have been identified through a skills gap analysis, organisations should develop training plans to address these gaps. Training plans should be tailored to the specific needs of employees and should be designed to improve their skills and knowledge in the areas where they require development.

Ways To Invest In Employee Skills

1. Provide on-the-job training

On-the-job training involves learning by doing, which can be an effective way to develop new skills. Employees can learn from their colleagues, observe and practice new skills, and receive feedback on their performance. On-the-job training can also be a cost-effective way to develop employee skills, as it does not require additional resources such as training materials or external trainers.

2. Webinars, Seminars, Conferences

Webinars, seminars, and conferences are all useful ways to provide employees with new skills. These training methods can be delivered online or in person and can cover a wide range of topics. Webinars are particularly useful for providing employees with an introduction to new skills, while seminars can provide more in-depth training on specific topics.

3. Mentoring

Mentoring involves pairing an experienced employee with a less experienced employee to provide guidance and support. Mentoring can be an effective way to develop both soft and hard skills. Mentoring can also help to build relationships between employees and can increase employee engagement and satisfaction.

4. Cross-Departmental Training

Cross-departmental training involves providing employees with the opportunity to work in different departments within the organisation. This can help to develop new skills, as well as build relationships between employees from different departments. Cross-departmental training can also help to build a more agile workforce, as employees will have a broader range of skills.

Effective feedback

Providing effective feedback is crucial for employee skills development. Feedback should be specific, timely, and actionable. Feedback should also be delivered in a constructive and supportive manner, and should be designed to motivate employees to improve their workplace skill set.

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Amy is a knowledgeable People professional with over a decade of experience across a variety of private and public sector organisations. With a particular interest in employee engagement, Amy is an advocate for employee-centric approaches in all areas of HR which is reflected in her writing. Before a career in HR, Amy read English and Creative Writing at university and later studied for her CIPD, HR Management.

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