Most companies treat employee development like an expensive luxury. Career development is the first thing to cut when budgets are tight and something to splurge on when profit margins are healthy. It’s the opposite. Gallup data from January 2024 reveals companies that prioritize employee development are 11% more profitable than their competitors.
But profitability is just one benefit of employee career development, which delivers measurable value across multiple dimensions. From talent retention to productivity gains, the evidence consistently shows that employee career development is quantifiably more than a perk; it’s a business imperative. Still, many leaders approach development hesitantly, underscoring the need for leaders to better understand why and how to strengthen individual employee development and company-wide career development programs—especially when it feels counterintuitive.
What Is Employee Career Development?
Employee development is the process of equipping an employee with the skills, knowledge and capabilities to improve performance in their current role or function. Career development is the ongoing process of planning and pursuing experiences, skills and opportunities that align with an individual’s professional aspirations and long-term career goals.
On an individual level, employee career development may include dedicated opportunities to clarify individual goals, aligning them with team and organizational goals. It may also include individualized training, coaching and action plans to achieve those goals.
At the team or department level, development may include formal and informal opportunities for mentorship, peer learning and skill sharing.
On an organizational level, development typically centers around a training program for employees at all levels, supported by a culture that celebrates growth. Ideally, the workplace culture also instills a norm of coaching (particularly for managers, who play a vital role in employee development) and includes infrastructure to support cross-functional learning to drive innovation and maximize efficiency.
The Importance Of Employee Career Development
Supporting employee development plays a critical role in building high-performance work cultures. It increases employee engagement at all levels—from individual employees to senior leaders, who set expectations for development. It also improves efficiency and productivity by reducing skills gaps, disengagement and turnover losses, which McKinsey estimates costs the median S&P 500 company $480 million annually.
Workplaces that prioritize development are not only more efficient and profitable, Gallup research in 2019 showed that they retain talent at twice the rate of competitors. They are also more resilient in the face of technological disruption. Deloitte has identified what it calls the “imagination deficit,” the growing gap between technological advancement and the ability of workers and organizations to imagine new ways to maximize human-machine collaboration. Development-focused organizations are best-positioned to close that gap. That means employee career development is especially important in the age of AI.
How Can Leaders Support Employee Career Development Opportunities?
For leaders who want to provide more development opportunities in the office, regular training, coaching and one-to-one conversations with direct reports are table stakes. In-person workplaces have the benefit of leveraging—and building infrastructure for—spontaneous opportunities to interact with team members and inter-departmental colleagues to facilitate skill sharing and peer learning. For leaders in remote workplaces, virtual training, coaching and one-to-one conversations should be the norm. Routine scheduling can help.
Beyond this, leaders can intentionally integrate virtual team-building, peer learning and cross-functional opportunities into quarterly schedules. For example, team meetings could regularly include a lessons-learned segment that encourages team members to share learning and development challenges they encountered. Quarterly offsites can also include dedicated time to revisit individual goals against the backdrop of organizational goals and objectives. Even for remote teams, occasional in-person meetings can increase efficiency.
The Spotify Example
Spotify’s internal talent marketplace, Echo, exemplifies intentional career development by centralizing growth opportunities for employees across departments and geography. It helps employees connect with peers and prospective mentors in different departments, as well as projects or unique programs, offering AI-powered recommendations based on interests and skills. Echo allows employees to take ownership over their own development, build their career portfolio and gain skills that they otherwise wouldn’t have—in a way that increases efficiency, productivity and engagement for the company. For example, a manager wanted to give his team a new challenge to grow their skills and used Echo to find a company project that needed assistance related to the team’s skillset.
Bottom Line
The data is clear: organizations that prioritize employee career development outperform competitors in profitability, retention and adaptability. From individual goal-setting to cross-functional learning, leaders can adapt development strategies to any work environment—whether in-person, remote or hybrid. When executed well, employee career development benefits everyone—because supporting employees to grow means supporting your organization to grow.
A version of this article appeared on forbes.com, posted on September 13, 2025
EXPERD, Human Resources Consultant, Jakarta – Indonesia