In economically turbulent times, businesses face numerous challenges. One of the biggest is often the need to cut costs and optimize budgets. Frequently, measures for employee development fall by the wayside.

While such cuts may lead to short-term cost savings, they can have long-term negative impacts because the challenges that leaders and employees face in many companies neither decrease nor become easier to manage.

Therefore, especially in times of crisis, the development of employees is crucial for the long-term success of a company. Here, we highlight the importance of employee development in economically turbulent times and provide tips on how companies can implement effective development measures despite tight budgets.

Why People Development is Important Especially in Times of Crisis

Strengthening Employee Retention and Motivation

In challenging times, employees are often uncertain and worried about their professional future. Targeted employee development measures can help companies strengthen the trust and motivation of their employees. Training and continuing education signal that the company is investing in its workforce and believes in their long-term success.

Cost Efficiency

The costs of recruiting new team members are significant. Estimates suggest that the total costs of an employee turnover range between 90% and 200% of an employee’s annual salary, depending on the level of specialization. By focusing on the development of existing employees, companies can reduce hiring costs and decrease turnover. According to the LinkedIn Workplace Learning Report 2024, companies with a strong learning culture have higher employee retention, greater internal mobility, and more leadership talent than those without a strong learning culture.

Promoting Internal Mobility

Through targeted employee development, companies can qualify their employees for various tasks and positions. This increases internal mobility and flexibility, allowing the company to respond more quickly to changes. Employees who are versatile can fill gaps caused by cost cuts or layoffs, helping to maintain operations.

Improving Competitiveness

Enhancing the skills and knowledge of employees can significantly boost a company’s competitiveness. In times of crisis, companies often need to be more flexible and innovative to adapt to changing market conditions. Teams with up-to-date knowledge and modern skills can help identify and implement new business opportunities.

Maximizing Your Budget

Which Employee Development Measures Can Companies Implement Despite Tight Budgets?

Prioritization and Focus

In economically difficult times, it’s important to prioritize employee development measures. Companies should focus on training and continuing education that offer the greatest value. These could be measures that directly contribute to increased efficiency or promote strategically important skills. A detailed needs analysis can help set the right priorities.

Utilizing Cost-Efficient Learning Methods

Nowadays, there are many cost-efficient learning methods that companies can use. Online platforms, such as the Leaders21 platform, offer a flexible and cost-effective way to train employees. By using digital learning formats, companies can save on travel and venue costs, enabling them to offer development initiatives to many employees.

Leveraging Internal Resources

Companies often have internal knowledge and expertise that can be used for employee development. By creating opportunities for employees to exchange ideas, learn from each other’s experiences, and inspire one another—whether through book or podcast recommendations—they not only promote knowledge transfer within the company but also strengthen team dynamics through targeted peer-learning activities.

Promoting Self-Directed Learning

Self-directed learning can be an effective and cost-efficient way to promote employee development.Companies can provide employees with access to online resources. By supporting employees’ personal responsibility and intrinsic motivation, companies can foster continuous development without incurring high costs.

Conclusion

Employee development is important, especially in economically challenging times. It contributes to employee retention and motivation, improves competitiveness, and promotes internal mobility. By prioritizing measures, using cost-efficient learning methods, and leveraging internal resources, companies can implement effective employee development strategies despite tight budgets. This enables them to overcome the challenges of the crisis and emerge stronger.