10 Reasons Why Learning and Development Is So Important for Organizations

Over the last two decades, technology adoption in businesses and workplaces has witnessed rapid acceleration globally. The business milieu is now more competitive and complex, with a workforce that is multigenerational in most organizations and the shelf life for knowledge and skills becoming shorter. Also, the digital revolution that is currently underway is affecting every aspect of business and workplace behavior. 

The market value of a business is now largely determined by the skill level of employees and the quality of its leadership. This transition to a knowledge-based and digital-first economy demands constant reskilling/upskilling of the workforce stay competitive. These trends have led to organizations investing more attention and resources in the Learning and Development function.

What is Learning and Development (L&D)?

The Learning and Development function is often called Training and Development. Training focuses on helping employees in the learning or acquiring of specific skills to improve their on-job performance. In contrast, employee development is more broad-based and encompasses efforts that help the employees to grow professionally. Employee development involves continuous learning to help employees grow in their careers.

Training is, therefore, focused on the immediate interventions provided to the employees via training programs, workshops, organized instructions, etc., to raise organizational effectiveness. Development, conversely, involves the alignment of organizational goals and employee goals and the efforts taken to ensure the attainment of these goals in the longer term. Learning and development, as a composite function, deals with the actions aimed at improving the effectiveness of both – the organization and the individuals and teams within the organization.

10 Reasons why Learning and Development (L&D) is Important

The key responsibility of the Learning & Development function in an organization is to manage the development of employees in such a way that it furthers the organization’s business objectives. The 10 key reasons that make L&D important in organizations in 2021 are:

1. Attracting and Retaining Talent: Organizations invest effort and time to hire top talent. However, once the talent has been hired, further investment in the hired talent usually ceases. Also, earlier, learning initiatives were largely focused on measures to improve the individual’s and the organization’s productivity. The transition to a knowledge-based economy requires learning & development initiatives to also contribute to ensuring the continued employability of the workforce. 

In the modern workplace, organizations retain employees only as long as they add value to the organization. At the same time, employees also look to work for firms that offer opportunities for professional growth. Opportunity for professional growth is among the top criteria for employees to join an organization. A lack of opportunities for professional growth is a key reason that employees cite for leaving an organization. The learning and development initiatives help employees grow professionally and remain engaged with their work and the organization. An engaged employee is less likely to switch jobs and will remain in the organization longer.

2. Capability Development: Organizations need to maintain a steady flow of investments in their employees’ Learning & Development initiatives to sustain organizational value. Knowledge requires to be constantly updated by providing employees with learning opportunities and challenging work assignments. Without L&D, organizational value gradually erodes and, if left unchecked, soon makes organizations irrelevant in today’s competitive business environment. Organizations that make the required investments in L&D and the grooming of its next generation of leaders realize impressive business returns. 

3. Fostering the ‘Right’ Culture. The modern workforce of the 2020s is increasingly virtual and geographically dispersed. Learning and Development initiatives help build and foster the ‘right’ values-based culture and instill a feeling of community across the geographically dispersed organization. 

4. Brand Building. Brand value is a key organizational asset. The brand conveys to the employees and the market the organization’s financial strength, relative position within the industry, and the quality of its products and services. Investments in learning & development help burnish the firm’s brand value and raise its standing among prospective hires as an employer of choice. A strong brand value communicates the brand’s strength raising organizational value proposition and helping attract the best talent, and enhancing business growth.

5. Motivation and Employee Engagement. Learning and Development opportunities play an important role in promoting engagement among employees. Investments in L&D prepare employees for higher job responsibilities and show them that they and their contributions are valued. When provided with the opportunities to improve their competencies and assigned challenging work, engaged employees tend to remain longer in the organization and prove to be more productive.

6. Promotes Innovation. Innovation requires collaboration, rapid learning, testing, troubleshooting, tweaking, iterating, and launching. L&D helps master all the above to facilitate a culture of innovation in the organization. Additionally, competition and evolving technologies require employees to embrace uncertainty. Uncertainty inherently carries with it an element of risk. Employees will embrace uncertainty and risk competently only if they are equipped with the requisite professional skills. Training, through the firm’s learning & development initiatives, is the best means for equipping employees to confidently manage uncertainty and risk. 

7. Continuous Improvement. The Learning & Development function, by enabling learning and raising overall skill levels, encourages a spirit of healthy competition among the employees. Competition spurs people to better themselves and be the best versions of themselves – professionally and personally –  benefiting the organization through improved overall productivity and performance.

8. Maintaining Performance Standards. Well-run organizations have clearly defined performance requirements. Sometimes the skill levels of an employee may not meet the required skill requirements. Training becomes essential to enable all the employees to meet the organization’s skill requirements. This is especially important for new hires who, quite expectedly, are unaware of the organization’s requirements. Learning & Development is the most effective means to train them for the work expected of them in the organization.

9. Work Consistency. Soft skills and communication training are aimed at developing a good work ethic across the organization. Improved communication and a good work ethic bring consistency in the work output of all the employees. It drives up productivity in the organization while also reducing the requirement for supervision. Reduced requirement of supervision frees up the managers to focus on strategic planning.

10. Building on Organizational Strengths. The increased competition requires organizations to stay ahead of the competition. To stay ahead, it is important to identify weaknesses and areas of development at work to plug any skill gaps that might exist. It is also important to identify the team’s strengths and work on them to retain the competitive advantage.

The reasons for increasing importance for Learning and Development in the workplace are important for an organization to understand. But, in a number of companies, the Learning and Development function is almost non-existent. This has to change for the organization to avoid a serious skill/responsibility mismatch. The following steps can be adopted.

1. Aligning L&D and Business Strategy. An organization’s L&D strategy is meant to bring about professional development and build professional competencies to support the organization’s business strategy. The L&D strategy needs to be executed in a timely and cost-effective manner for it to be effective. For example, if the business objective of the organization is to achieve digital transformation, the Learning & Development efforts need to be directed towards building the required competencies in the employees to attain the stated business objective. 

The L&D teams in many organizations fall short on this requirement. This normally happens because of outdated approaches to training or inadequate budgets. To be effective, the L&D teams must assess internal organizational capabilities, people competencies, and skills and identify key learning interventions that will help attain business objectives. This evaluation of the alignment of training and strategic objectives needs to be undertaken periodically (half-yearly, annually, etc.) to maintain effectiveness.

2. Collaborative Approach. In a business environment that is constantly evolving and is characterized by the increasing adoption of ever newer technologies. It is imperative that business units and L&D teams become more collaborative and also more agile in adapting to evolving business processes and business realities. Learning & Development teams, in consultation with the business units, should have the ability to launch new learning initiatives to build new competencies required by the business among its employees. To derive the maximum benefits from the investments made in Learning and Development, the L&D team must assume a broader role and draw up an ambitious vision for steering the learning journey for the organization.

The business unit and L&D team’s collaboration can be instituted by mandating a shared responsibility for identifying, defining, and designing the learning intervention and for securing the necessary funds for the rollout of Learning and Development initiatives. The top leadership should smoothen this collaboration by emphasizing and prioritizing the alignment of L&D and overall strategic objectives. The involvement of top leadership helps embed the collaborative approach and enhance commitment to the cause. 

3. Gap Assessment. Once the firm has identified its business objectives, it needs to assess if its workforce possesses the competencies to deliver on its business objectives. This capability assessment must be undertaken at all levels of the firm. For the capability assessment to be effective, the process needs to be deliberate and systematic, with the business objectives sharply in focus while identifying the areas of development at work. For example, an e-commerce firm will need to assess its capabilities in big data and predictive analytics. After identifying the capabilities required to attain business objectives, suitable Learning & Development interventions need to be designed and rolled out to bridge the identified capability gaps. 

4. Training Methodology. Increasingly, organizational Learning and Development interventions are delivered in the hybrid model through virtual and in-person sessions. For learning outcomes to be effective, it is important to have follow-up sessions after the original learning intervention. The learning methodology, therefore, needs to move away from a stand-alone learning intervention to a “learning journey” or “lifelong learning” in the areas of development at work identified by the organization. Continuous learning over an extended duration that includes a mix of L&D interventions such as practical training, self-directed learning, workshops, on-the-job training, etc., enhances the effectiveness of training.

5. Roll out and Scaling-Up. The efficient rollout of L&D initiatives in a timely manner and within budget goes a long way in winning and sustaining the support of the firm’s leaders. Learning & Development initiatives are often derailed because too many initiatives are rolled out at once without preparation and inadequate budgets. The L&D teams need to maintain a constant dialogue with the firm’s leaders about the business priorities, learning requirements, and the required budgetary support. Before launching a full scale-up, executing a pilot intervention to a limited audience to demonstrate the effectiveness and then embarking on an enterprise-wide rollout helps win organization-wide support. 

6. Impact Measurement. The effectiveness of the rolled-out training and its impact needs to be assessed through suitable key performance indicators (KPIs). The most important KPI is to assess the alignment of Learning & Development initiatives with business objectives. The next KPI should assess whether the learning interventions have resulted in the targeted behavioral and performance improvements. The final KPI could be to assess the effectiveness in terms of Return on Investments (RoI) of the learning interventions made. Big data and data analytics enable L&D teams to evaluate and predict the impact of the learning interventions on business outcomes.

However, measuring impact accurately is difficult. It is best to measure impact using outcomes-based metrics. The metrics used most commonly to measure impact are – effect on individual performance, improvement in employee engagement, change in team effectiveness, etc. The impact of Learning & Development can be measured and articulated more effectively through the measurement of the following: 

• Alignment. Evaluation of the effectiveness of the training strategy in supporting the firm’s business goals.
• Capabilities. Did the L&D intervention help employees build the required skill sets? This can be measured by evaluating employees’ skill gaps against a defined competency framework.
• Business Health. The impact of the learning program in bettering the overall business health of the organization needs to be evaluated against a pre-defined baseline.
• Individual Performance. Evaluation of how well the L&D interventions help employees attain optimal impact while maintaining requisite work-life balance.

7. Integration of L&D Interventions Into HR Processes. While L&D initiatives are required to be aligned with the firm’s business objectives, they also need to be made an integral part of the overall HR process. Learning & Development needs to be an integral part of recruitment, onboarding, appraisals, employee advancement, and succession planning. The L&D team must use the feedback received from performance reviews as inputs for planning its capability-building programs. Several firms substitute annual appraisals with continuous feedback. L&D teams then need to help managers develop skills in giving effective feedback. L&D teams can also strengthen onboarding by imparting to the employees the skills that will help them succeed in their roles. 

8. Organizational Learning Framework. In most organizations, the bulk of the learning happens on the job. The next largest chunk of learning happens via interaction and collaboration with seniors and peers and the balance through formal learning interventions. L&D teams must enable a learning culture that supports informal learning through coaching, mentoring, on-the-job training, on-demand access to digital learning, etc. 

9. Leveraging Technology. Technology platforms and applications are great tools for increasing the effectiveness of training. Virtual classrooms, mobile-learning apps, embedded performance-support systems, learning-video platforms, massive open online courses (MOOCs) are some ways available to leverage technology. Learning & Development teams need to ensure that the learning technologies adopted to fit into the overall learning framework and can support the entire HR cycle ranging across recruitment, onboarding, performance management, rewards and recognition, career management, and succession planning.

Learning-technology firms now largely provide services through cloud-based platforms. These cloud-based platforms provide L&D services to client organizations with the flexibility to plug and unplug systems to access the latest services without the need to invest in expensive on-premises systems. 

Auzmor is a leading cloud-based platform that lets you drag and drop an HR Suite of four product solutions: Auzmor Learn (Launching, tracking, and reporting for any type of training in one centralized location, viewable on any device); Auzmor Nucleus (the HCM platform for managing employee data); Auzmor Hire(for finding, engaging and hiring talent); and Auzmor Kovalent (the marketplace for your preferred HR app).

The world’s economy in the 2020s and ahead will be defined by new technologies and attributes such as Industry 4.0, Internet of Things (IoT), increased industrial automation, globalization, etc. These factors will constantly throw up new challenges for organizations. In response, organizational L&D teams need to come up with matching, large-scale learning programs and also foster a culture of continuous learning. 

For any organization to stay relevant, the L&D response has to constantly match the pace of the changes in technology. Individual skill and knowledge will be key in the modern knowledge-intensive workplaces for organizations to maintain their competitive edge. The best L&D programs focus on being flexible and agile to respond to changing requirements and build a workforce that is equipped to thrive in the digital age.