Why is Career Development So Important for Organizations?

[Reyed Mia (Apprentice, DIU)]

Why is Career Development So Important for Organizations?

Attracting top talent: Although the recently the US has been faced with a tight job market, in competitive fields employers must focus their efforts on attracting the top talent. Competitive employment packages that go beyond traditional compensation and benefits can be key to their success. Research shows that career prospects and learning opportunities are influencing factors when potential employees are choosing between job offers (Barbeite & Maurer, 2002). In addition employees who perceive their employer to provide career growth opportunities show a greater commitment to their organizations (Mikkelsen, Saksvik, Eriksen, & Ursin, 1999).
Job satisfaction: Employees who participate in required training courses and worked-based development activity during work time reported higher job satisfaction and organizational commitment (Birdi, Allan, & Warr 1997). These findings can be explained by social-exchange theory, which posits that employees will remain with and work harder for an organization if the organization shows it values the employees by taking on the responsibility of shaping their career (Aguinis & Kraiger, 2009).
Retaining employees/reducing turnover: Through organizational commitment, career development opportunities help to retain employees and thus prevents turnover. When estimates of the costs involved in replacing a skilled employee have been reported to be as high as 150% of that employee?s salary retention of quality employees is a strong business decision.
Productivity and Financial Returns: Employers can also increase productivity and financial returns by investing in their employees via career development. Perceived growth opportunities offered by an employer have been linked to higher job performance and lower turnover (Kraimer, Seibert, Wayne, Liden, & Bravo, 2011), which, as discussed above, contributes to higher quality products and prevents monetary loss due to turnover. Moreover, evidence suggests a positive relationship between financial performance and organizations that encourage and support continuous knowledge acquisition and dissemination (Ellinger, Ellinger, Yang, & Howton (2002).
Because organizations have to stay current in technology, business practices, and in advances in their industry, an organization that embraces career development processes can keep employees informed of advancements and maintain their competitive edge in the market.

Aguinis, H., & Kraiger, K. (2009). Benefits of training and development for individuals and teams, organizations, and society. Annual Review of Psychology,60, 451?474. doi:10.1146/annurev.psych.60.110707.16350
Barbeite, F., & Maurer, T. (2002, April). Importance of learning and development opportunity to job choice decisions. Presented at the annual conference of the Society for Industrial and Organizational Psychology, Toronto, Ontario, Canada.
Birdi, K., Allan, C., & Warr, P. (1997). Correlates and outcomes of four types of employee development activity. Journal of Applied Psychology, 82 (6), 845-857.
Bureau of Labor Statistics News Release. (2012). Number of jobs held, labor market activity, and earnings growth among the youngest baby boomers: Results from a longitudinal survey. Retrieved from : http://www.bls.gov/news.release/pdf/nlsoy.pdf
Ellinger, A.D., Ellinger, A.E., Yang, B., & Howton, S. (2002). The relationshiop between the learning organization concept and firm? financial performance: An empirical assessment. Human Resource Development Quarterly, 13 (1), 5-21.
Kraimer, M., Seibert, S., Wayne, S., Liden, R., & Bravo, J. (2011). Antecedents and outcomes of organizational support for development: The critical role of career opportunities. Journal of Applied Psychology, 96(3), 485-500.
Mikkelsen, A., Saksvik, P., Eriksen, H., & Ursin, H. (1999). The impact of learning opportunities and decision authority on occupational health. Work & Stress, 13 (1), 20-31.
Noe, R. (2010). Employee Training and Development Fifth Edition. New York, New York: McGraw-Hill Irwin.
West, M., & Nicholson, N. (1989). The Outcomes of Job Change. Journal of Vocational Behavior, 34,335 349.

Sources: https://goo.gl/RuOW9S