Hiring and retaining talented, qualified employees is a key concern for small businesses. The market is competitive and the best talent expects a good salary as well as perks and benefits.

We can’t all be offering debt-free graduate programs though and industry qualifications such as accountancy exams are no joke either. So what can small businesses do to promote and provide effective employee development?

Understand the importance of effective employee development

Research shows employees feel more valued when employers invest in their training and development. This makes training and professional development opportunities highly effective as employment benefits.

And it’s easier to develop a comprehensive development plan on a small budget than you might expect. Thanks to technology, the power of networking and a little bit of creativity, you can do quite a lot.

Great Place to Work identifies three important ways the world’s top 100 companies use to develop and retain talent. The all have professional development programs designed to:

  1. Meet the ambitions of their employees
  2. Realise company goals
  3. And groom top talent for leadership.

These programs share a common goal - that of developing ‘high quality relationships’ based on trust, camaraderie and pride. You'll notice that transparency and communication are key to many of the tips we give you here - that's no accident.

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There are many simple ways you can adapt these three concepts to suit your company’s needs and budgets. And so we give you 10 effective employee development tips to keep your people happy and engaged and growing with and for the business.

1. Training in the early days

The idea of a new employee "hitting the ground running" is a farce. You know what happens if you do that? You fall on your face. - Michael Watkins.

Implement a training program for new hires. Introduce them to colleagues, the kitchen and the photocopier.

Set a short reading list of books on business and the industry and subscribe them to at least one industry publication. Make these compulsory reading for all employees.

Illustration of hands holding a book, used in blog 10 ways to achieve effective employee development on a small business budget


Encourage your employees to share feedback during informal meetings or chats with you and other colleagues to ensure the readings are an effective learning opportunity. Try asking for three top tips from a book that you could implement in your business or one thing you could improve about how you conduct sales calls from article y.

You should also arrange a short rotation or shadowing period to ensure new employees get a bird’s eye of your business and how they fit into it. People feel more motivated when they see they bigger picture they are a part of.

2. Make a connection

You and your staff should have a clear understanding of your company’s mission. Hopefully you already have an established company culture that you can induct them into - but don't stop there.

Encourage your employees to make a mental and emotional connection with your business by asking them for ideas and opinions and taking action based on those suggestions. Get them involved in the growth and evolution of the company.

Clearly communicate your expectations of initiative, leadership, effort and achievement and how these will be measured.

3. Career progress and appraisals


Appraisals are a necessary evil. Or rather, are necessary but don't have to be evil. They give you and your employees the opportunity to assess their contribution to the company and their own professional development.

Image of person stood looking inquisitively at symbols, used in blog 10 ways to achieve effective employee development on a small business budget

Providing and learning from constructive criticism is a crucial element of a strong professional development plan. You can also use the review to address concerns or problems before they careen out of control. Be sure to give employees warnings of appraisals so that they can prepare and come with questions and work examples they want to discuss.

Set well thought-out career and development objectives to help everyone work towards tangible and measurable goals. Remember:

  • Specific
  • Measurable
  • Achievable
  • Results-focused
  • Time-bound

Motivate your staff by encouraging them to develop their skills and talents instead of focusing exclusively on the responsibilities of their role. Support them in what they want and need and listen to their reasoning.

4. Personalised employee development plans

Develop ‘customised solutions for individuals, while simultaneously providing scale and cost efficiencies across the organisation,’ says Don Jones, former Vice President, Learning at Natixis Global Asset Management.

Don’t use a one-size-fits-all approach. It will be a waste of time and resources for both you and your employees. General frameworks and questions are good to get the conversation going but to get the most out of your investment in individuals, you need to develop a collaborative, structured plan for each employee with clearly defined objectives and targets. These should be based on their specific skills, strengths, career goals and opportunities within the business.

You also need to remember that your employees are just like you. They have too much work and not enough time so they will struggle to fit training and education into packed schedules.

HBR recommends you make it easier by allowing employees to use ‘flexible learning solutions’ that can be accessed on mobile phones and tablets at their convenience. Similarly, recognise that different people have different learning styles and may need help or support using technology for training purposes.

5. Staff meetings and discussions

Illustration of people in a board meeting looking at a graph, used in blog 10 ways to achieve effective employee development on a small business budget

Schedule regular company meetings both on and offsite. These can be an excellent learning opportunity for employees from all departments to come together and brainstorm about finances, technology, products, industry developments and regulatory issues.

Everyone likes to be valued and appreciated. Encourage your employees to think critically about the business and actively engage with its growth by asking for opinions and feedback.

Set homework and put it to work at the meetings. Be sure to come out with tangible actions for people to take and show how you’re going to use the research they came prepared with.

6. Departmental rotations

Give your employees opportunities to discover new talents and interests. Don’t let them get bored or complacent. Rotate staff through company departments to challenge and stimulate them.

This lets your employees understand how the various departments work and support each other making them better at their own role and potentially uncovering valuable objective insights about the departments they enter.

It’s also an opportunity for them to identify or develop other skills and strengths they may have overlooked and will open up new avenues for growth.

7. Mentoring and networking

Illustration of a lightbulb acting as the centre of the solar system, used in blog 10 ways to achieve effective employee development on a small business budget

Provide opportunities for your staff to learn from the experiences of senior company managers, industry leaders or simply smart, wise individuals who have made a difference to society.

Create a directory of professionals willing to mentor younger or inexperienced staff.

Connect mentors and mentees based on roles, skills and interests. Better yet, develop initiative by encouraging employees to reach out to appropriate individuals themselves.

Send employees to conferences, trade fairs or other networking events to build confidence, communication skills and improve their understanding of the industry.

8. Virtual training

If someone needs it, there is almost certainly an online course for it. Or a talk. Or a training video.

You don’t need to spend a fortune on training your employees, developing their talents or teaching them new skills when there is a world of free advice online – just give employees a little time to explore them.

For example, there are:

  • MOOCs offered by accredited colleges and universities
  • Online training courses offered by Lynda.com and Skillshare
  • Motivational talks on Tedx
  • And Bill Gates summer reading list

All are excellent training and development resources.

9. Industry or trade organizations and government programs

As a member of a trade organization, you will be able to offer your employees access to seminars and workshops, mentoring and networking events and news on industry developments, best practices and compliance.

Identify free training programs offered by trade organizations or government programs for small businesses and encourage employees to attend as many as they are interested in.

10. Stay and exit interviews

Stay interviews – where you ask employees why they are staying with you – are just as important as exit interviews. Use both to identify the strengths and weaknesses of your company and improve your effective employee development programs.

Well-designed development programs improve employees’ knowledge base and technical skills; develop managerial and leadership abilities and maintain an overarching focus on interpersonal skills.

This might sound like a lot of work, and even when it's implemented it will take effort and commitment to keep effective employee development going. They payoffs though are happy, engaged employees who are more productive and more effective. Well worth the effort when you look at it like that.

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