Damaging cost of demoting people power

We’ve all heard the old joke: a chief executive is talking with his finance director; the FD asks, “What if we invest in our people and they leave?” to which the CEO replies, “What if we don’t and they stay?” It’s funny because it’s true.

This is not just management-speak, firms really should invest in their talent. Most of us will have experienced first-hand the alternative: the listless inertia of a bored workforce. In these places people nod sleepily at their desks or chat distractedly in the kitchen during an elongated tea run.

People take newspapers with them to the toilet to read secretly behind locked doors, create fake meetings in order to leave early each Friday and spend hours scrolling through enticing alternative jobs offering them more money and better benefits.

Needless to say, this is not the sort of environment chief executives want to engender. Yet many sleepwalk their organisations into just such a scenario because they haven’t given proper thought to how people want to work and what they want to achieve.

You should invest even if your staff do leave in their droves because other talented and ambitious individuals will hear of your training and benefits programme, which will in time become the envy of your sector, and will flock to you like pigeons to breadcrumbs.

Training course

Training employees gives them the skill sets to deliver the best results

The skills gap is a real problem in the UK and one of the two best remedies is investment by businesses; the other is investment by the state. A more fluid, highly-skilled workforce will benefit everyone, but organisations that invest more will get more back.

Of course, by failing to invest, bosses invite the counter-example: an industry in which people cling to their positions because they worry about their prospects elsewhere. The lack of skills means jobs take longer and more mistakes are made, while a general sense of disenchantment makes the whole sector slip.

The skills gap is a real problem in the UK and one of the two best remedies is investment by businesses; the other is investment by the state

Leading a company in which employees are gradually getting worse at their jobs is like driving a car while gradually applying the handbrake. Soon you’ll be left behind and eventually you‘ll stop.


According to Susy Roberts, managing director of people development consultancy Hunter Roberts, investing in employees doesn’t just mean making them better at core jobs. They should be trained in dealing with people, as well as simple IT and other universally recognised components of doing business well.

“Employees can only deliver peak performance if they have the skills required to do so. In some cases this might be professional technical skills, but sometimes people have all the technical skills they need to do their job and lack the necessary people skills, such as the ability to work as part of a team or influence others,” she says.

“Very little separates most products and services sold at different companies, so how your staff interact with people has become critical to creating and sustaining a competitive edge. Put simply, if you don’t invest in your people, your business will suffer and your competitors could well run you out of town.”

Gavin Holland, founder of Anthemis Talent, says the need for constant investment is greater than ever. He argues that the emergence of small businesses as the spearhead of the economy and the increasingly fractured way in which they operate, means only people who can take advantage of this environment will thrive.

This is mainly about investing in salaried staffers but, particularly for larger businesses, it also means investing in the people around you who feed into your business. He says: “Traditional hierarchies are dying and networked companies will be the winners of the future.

Nimble, agile, flexible companies will flourish and so we encourage organisations to invest in their talent ecosystem, including business partners, service providers, contractors, disruptive startups – not just their full-time salaried employees.”

Investing in people’s ability to do a job is even more powerful than it sounds. People want to work when they feel like they are on top of the job, not when they feel overwhelmed. We are all essentially grown-up five year olds and we value the feeling of being good at something.

So salaries are great, but being given the chance to do a good job is more inspirational, according to Stephen Pierce, chief HR officer of Hitachi Europe. “When we lose talented staff it is almost always due to lack of development opportunities; it is very rarely due to pay or anything else. So without this crucial talent investment, all companies risk losing their competitive edge to others in their markets,” he says.