Yesterday, I listened to a panel discussion of city mayors. The panel was asked how they were able to justify spending resources on green spaces like city parks and boulevards when roads need paving and there are unmet housing needs. An analogous question that is asked of company leaders is: “How can you justify employee development programs, the perceived equivalent of something less important like parks and recreation, when resources could be used for something absolutely necessary like newer equipment or bigger salaries?” This is an important question I am sure you have been asked or maybe have asked yourself. I’ve used the mayors’ answers to frame the conversation.
Quality of life —There is more to city services than road maintenance and protection. When we can, we choose a place to live based on the amenities and how the community values align with our own. Likewise, the professionals in your organization will choose where to work based on their feelings and their fit, not just the size of the paycheck. Employee development might include individual education such as adding new skills, team building such as how to better collaborate, or organizational development to increase alignment and motivation based on company vision. Taking from Maslow’s ‘Hierarchy of Needs’ model, quality of life at work — beyond meeting one’s foundational physiological and safety requirements — is generally based on having a sense of belonging, feeling respected, having a sense of fulfillment, and feeling ability to seek personal growth. A company that invests time and money in professional development meets these higher-level needs by demonstrating employees’ importance to the organization—that they are valued and that the company is willing to invest in them with an eye to the long-term.
More residents — Residents and businesses are the tax base for a municipality. Towns and cities often promote quality of life to encourage people to move to their community. In the case of a company, building a reputation as a place where people want to work — both because of competitive wage and opportunities for development — makes it easier and less expensive to recruit and hire the best candidates. Better candidates, of course, contribute more to your success. In exit interviews, career factors including development opportunities, promotions, and job security are the number one attractor of employees to a new employer. When employees are happy and engaged, they are less likely to leave the company, reducing the costs associated with recruitment and on-boarding. According to the Work Institute 2022 Retention Report, it costs 33% of an employee’s annual salary to find a suitable replacement. Recruit the best and keep them.
Reduced costs — Greenspaces provide additional services such as water filtration and a place for youth programs. These sometimes-overlooked services will more than pay for themselves by providing resiliency to the whole system, thereby reducing future risk. What is your company doing to reduce future risk in your employee base? Soft skills, especially in middle management, are the tools that help managers to better delegate and hold accountable their team, motivate employees, and resolve conflicts among employees. Has your company invested in the resiliency to withstand a major stress?
Increased revenue — Cities and businesses both use net revenue as an indicator of success. Cities know that greenspace does more than make people feel good. It is, the city determines, the best use of the land resource. On the business side, investing in employees is similarly lucrative. According to a 2021 Deloitte report, a comprehensive training program leads to 218% higher revenue per employee. According to the American Society of Training and Development, employers that spend $1500 per employee per year see profit margins increase by an average of 24%.
The mayors on the panel I listened to agree that greenspaces are vital in successful cities. Given how important employee development is, it likewise needs to be viewed as a necessary investment after all — not discretionary spending.
