Employee Development – Is It a Smart Investment for the Company?

In recent days, organized by the National Agency for European Educational Programs and Mobility, we had productive discussions focused on the topic of “Skills and Job Mismatch”—whether the competencies people possess align with labor market needs, and how we can reach qualified talent.

On a daily basis, I encounter companies struggling to find qualified employees. At the same time, job seekers—whether employed or unemployed—claim that they “cannot find a good job.”

Something is wrong…

This is a deep topic, involving a great deal of psychology as well as many other disciplines.

The circle has long been closed between education, market needs, the (free or restricted) labor market, and government institutions.

What is missing is structured non-formal education and a culture of lifelong learning. As a result, we find ourselves in a situation where responsibility is constantly shifted from one side to another—and consequently, the problem remains unsolved.

Yes, these are serious challenges. However, I will not focus on them here. Instead, my focus is on the area where I have personal experience that I would like to share.

We (owners and/or management teams) must accept that we bear responsibility—accountability—for the employees in our organizations. I equate this responsibility with the responsibility parents have toward their children and their development. Children cannot develop on their own; they need guidance and support.

Likewise, we have a moral obligation toward our employees—to support their development, teach them how to perform their roles effectively, help them excel in what they do, and continuously develop their competencies. This not only fosters their personal growth and enables a better future for them, but also contributes to the development of the company and the wider community.

That is why companies must invest in employee development.

If we do this consistently, we will answer both of the unknowns mentioned earlier: we will have employees who are qualified for their roles and, at the same time, highly engaged members of the organization.

But how do we get there?

1. Invest Time

For me, the first step is a leadership decision—to invest in personal development and in the development of employees.

Decide that one hour per day will be dedicated to working with a colleague on their development through practical work (learning by doing). One hour of mentoring, where knowledge and experience are transferred through real tasks.
Dedicate two hours per week to one-on-one conversations with a colleague, focusing on development plans, opportunities, and activities aligned with defined goals—goals that are easier to achieve together.
Create a quarterly employee development discussion plan and include it in your regular business calendar.

Budget for Employee Development

2. Invest Financial Resources

Plan and allocate a budget dedicated to training and employee development.

Training refers to the technical skills an employee needs to perform their job today and in the near future.
Example: Specialized training for using specific software, machinery, or work processes.
Employee personal development refers to behavioral competencies (commonly known as soft skills) required in today’s workplace, as well as future competencies needed for career advancement.
Example 1: A sales agent must possess the competency “Effective Communication.” If this is an area for improvement, it should be included in their personal development program.
Example 2: A sales agent may not currently need the competency “Team Building,” but if they are expected to move into a supervisory or managerial role in the future, this competency should be part of their development plan.

Commitment to investing in employee development is usually unanimous—until the question arises: how much should be allocated for training and development from the company budget?

The answer is simple: there is no fixed rule.

Investment levels depend on many business factors, but the most important are organizational size and needs aligned with the annual business plan. From my personal experience, allocating 1% to 2% of annual company revenue is a good starting point.

Other Areas Closely Related to Employee Development Investment

Transparent, dignified, and competitive salary and benefits models
Initial training (Basic Onboarding)
Structured workforce planning process
Annual technical training programs
Annual individual behavioral skills development programs
Career paths – clear visibility of development and advancement opportunities within and beyond the organization
Employee performance management systems
Transparent, realistic (SMART model), and competitive performance indicators focused on results (Key Performance Indicators – KPIs)

Building a Culture of Employee Development

Once all of this is in place, the most important step remains: embedding these practices into the organization—establishing a lifelong learning culture as a fundamental and continuous process, supported by transparent communication and a high level of dignity and respect toward employees.

So the question remains:

How much do we invest in employee development?

Polikarp Arsenovski