An effective employee development plan is more than just a roadmap for individual career growth. It’s a strategic tool that aligns employees’ aspirations with the evolving needs of the business.
A structured plan for staying current on the most in-demand skills and the latest technology is incredibly valuable. It can lead to better employee engagement, retention, and company profitability.
Here, we’ll provide you with actionable tips on creating an impactful career development plan, discuss its benefits, and give away a template to help you kickstart your planning process.
TL;DR — Key Takeaways
Employee development plans are structured approaches to helping employees grow within a company in a way that is aligned with their professional goals and the organization’s.
The benefits of creating a development plan include increased employee engagement and retention, greater competitive advantage over industry peers, and more resilience in the face of skills shortages in the market.
Using employee development plan templates can greatly streamline implementing such a company-wide initiative while making it transparent and equitable.
For employee development plans to be successful, it helps to hire the right fit for your team in the first place. That’s where hiring software like Toggl Hire can help (as it includes expert-created skills tests and other assessment features to help you identify truly great talent).
What is an employee development plan?
An employee development plan is a strategic tool that outlines the skills, goals, and knowledge an employee needs to succeed in their current role at a company.
It also helps map out where an employee might want to take their career, aligning it with overall company goals, and charts an employee growth plan to get them from A to B.
Employee development plan vs. professional development plan
It’s important to distinguish between employee development plans and professional development plans, as they’re easy to mix up but slightly different:
The employee development plan is concerned with the employee’s growth in the context of current and future responsibilities within a specific company.
By contrast, professional development plans consider an employee’s industry-wide knowledge, external opportunities, career aspirations, and personality.
Top tip:
While an employee development plan focuses on an employee’s growth within a company, professional development plans have a broader scope.
Types of employee development plans
The best employee development plan structure depends on your organization’s and current team’s needs. We’ve outlined four different types of plans. Read through the list below to see what best fits you.
Skills-based plans
Perhaps one of the foundations of employee development planning is creating an employee development plan based on a skills mismatch.
This consists of identifying an employee or team’s current skills, what key skills are missing, and formulating a professional development plan to address them. It’s great because it improves employee performance and company growth at the same time.
A great way to gauge your employees’ skills is by running routine talent gap analyses. This way, you’ll always have a pretty up-to-date idea of the strengths and weaknesses in your company for both technical skills and soft skills.
Best for: New HR teams starting out with employee development initiatives or established companies that want to maximize employee performance. Companies committed to nurturing potential often provide training programs to address specific skills gaps required to meet their employees’ career goals.
Top tip:
Another great way to approach skills-based plans is through skills mapping. It’s an approach used to identify and document which skills you have in your team and which might be needed for your business. While interconnected, skills mismatches, skills gaps, and talent gaps are distinct concepts. Here’s a quick recap of each:
- Skills mapping: A method used to visualize competencies and identify skill gaps
- Skills mismatch: Something that happens when there’s a disconnect between the skills employees have and what’s actually needed in their current roles or wider job market.
- Talent gap analysis: Is about more than skills and is used to identify stand-out talent
Objective-based plans
The employee typically oversees this kind of employee development plan. The individual crafts short-term goals for themselves that are aligned both with company goals and the individual’s professional growth goals.
Then, both the employee and company will discuss the objectives and formulate a plan. The organization will ensure that development milestones fit the wider business goals of the company. It’s also a great opportunity to identify employees’ skills, strengths, and weaknesses.
Less experienced employees might greatly benefit from a mentor at this stage, while experienced employees might be able to offer mentoring support to new hires.
Best for: This development plan is proactive rather than reactive. It is employee-driven and, as such, best for ambitious teams made up of self-motivated individuals. A smaller startup, where there is still scope to somewhat craft your own role, could benefit from this.
Performance-based plans
A performance-based development plan focuses on analyzing previous results and creating a development plan based on those. These performance improvement plans seek to identify opportunities for growth and then make short- and long-term development goals to help individual employees reach their full potential.
The downside is that they’re solely focused on performance without factoring in other things that might impact that performance, like personal circumstances or team dynamics. It can be easy to slip into only discussing areas of improvement, but this alone can be demoralizing. Be sure to highlight employees’ successes and achievements, too.
Best for: This type of plan is best suited to positions where performance is easily quantifiable and progress is easy to measure, like sales. It can be very reassuring and motivating for results-driven individuals who might not be hitting their targets.
Leadership development plans
Leadership development programs are detailed, strategic plans that help prepare employees for future careers and management positions in the company. Leadership training focuses more on the soft skills required to effectively organize, motivate, and lead people toward a common goal.
This type of development program is usually structured, long-term and personalized for the professional goals of the employee and the needs of the organization. It outlines learning and development initiatives an employee is going to undertake to develop their leadership skills and reach their career goals.
Best for: Growing companies that anticipate expanding their management team in the near future and larger companies that are already more established. If a company doesn’t provide internal training, most will offer employees some sort of development budget to be used on external development opportunities.
Succession planning
Similar to leadership development, succession planning involves identifying and then preparing individual employees to assume key leadership roles within the company.
Typically, HR professionals evaluate which roles they consider critical and develop training programs to prime high-potential employees to fill these spots. They’ll also outline an employee development plan to help individuals develop the necessary new skills and achieve their career goals.
Best for: A period of turnover in the leadership team or for companies that have a culture of relying on internal recruitment before sourcing candidates externally.
Benefits of employee development plans
While the benefits of employee development plans vary from organization to organization, every company can gain value from fostering employee growth.
These key benefits can help you get buy-in from senior management if they need a little convincing. Knowing exactly what you stand to gain from investing time and money into building these initiatives can make asking for approval easier.
Boost employee retention
Investing in an employee’s progress goes a long way. According to Harvard Business Review, companies that are committed to creating an employee development plan saw a 58% increase in retention in 2022.
This fosters a sense of loyalty and commitment as employees see opportunities for growth, skill enhancement, and career advancement, creating a mutually beneficial relationship built on trust and appreciation.
Reduce employee turnover
61% of HR teams say a lack of a clear path for advancement is the second-biggest driver of employee turnover. It ranks second only to compensation.
A good employee development plan clearly lays out how an individual can expect to progress toward their professional goals, removing this uncertainty. This means offering development opportunities is a good way to reduce turnover while boosting employee satisfaction and engagement.
Address skills shortages
75% of EU employers couldn’t find the talent they needed in 2023, up from 43% in 2018. What’s more, 54% of SMEs in the EU say this is one of the top three challenges their company is facing. So this is a big deal.
Targeted development plans can nurture professional growth internally, insulating your organization from skills shortages in the market.
Bridge skills gaps
Technology moves fast, and your employees’ skills are becoming outdated more rapidly than ever. To stay relevant in a competitive job market, companies should leverage employee development programs to upskill and develop employees across the organization.
This is a great way to improve employee retention and job satisfaction simultaneously. 48% of US workers would switch jobs for the chance to learn new skills through professional development plans. By introducing employee development plans, you can use that to your advantage.
Gain a competitive advantage
A skilled workforce is a happy and effective workforce. Productive, innovative, and engaged employees have a serious advantage over the competition.
Data shows that organizations with engaged employees are more productive, more profitable, and have less turnover than their competitors. Investing in your team’s professional development pays dividends over time.
Improve diversity & inclusion
According to a 2021 Fortune and Deloitte survey, inclusive teams outperform the competition by 80%, while diverse companies generate 2.3 times higher cash flow per employee.
By incorporating Diversity, Equity, Inclusion, and Belonging (DEIB) into employee development plans, you can create more inclusive and respectful workplaces and develop a more diverse team of leaders.
On the flip side, personalizing employee development plans helps tailor growth strategies to every employee’s unique background, experiences, and skills, ensuring equitable opportunities for all.
How to create a professional development plan
Next, let’s dive into the details of crafting a robust employee development plan.
You want to make sure your plan is actually actionable and not something that will stay at the bottom of the agenda, as the day-to-day takes priority. Of course, there’s no one-size-fits-all approach to something as personalized as career development plans. Each one should be tailored accordingly.
Here are eight steps to get you started creating a professional development plan from scratch.
1. Identify business goals
To start, think about the specific company goals you want to achieve and the timeframe in which you want to achieve them. These should encompass both short-term and long-term goals. You might have to source input from department heads to get total clarity on the priorities.
Once the goals have been identified, highlight the key skills that will be needed to achieve them. This is not a representation of the organization’s current skill landscape—it’s more of an ideal scenario. But that’s okay because of what comes next.
2. Perform a skills gap analysis
Once you’ve identified the key skills needed to achieve your business goals, it’s time to analyze what you have and what you need. Perform a skills gap analysis to understand which employees you need to upskill and with what tools.
If you want to take it a step further, you can also conduct a training needs analysis to determine which employees need to be upskilled first. This can help organize the logistics of the process and make the whole development plan roll-out run smoother.
3. Set SMART goals for employee career development
Once you’ve established who needs what skills, it’s time to set them in stone. Setting SMART goals is a great way to motivate employees to take ownership of their own career development, as they’ll have tangible objectives to work toward.
SMART goals should be specific, measurable, achievable, relevant, and time-bound. Breaking something as overwhelming as career development into actionable, digestible goals makes them appear much more manageable and empowers employees to rise to the occasion.
4. Choose relevant training and development activities
Once the goals — the “what” — are in place, it’s time to start thinking about the “how”. How will these objectives be achieved?
Different development opportunities target different types of goals. For example, if your biggest priority is training employees on leadership, you might want to consider investing in coaching or mentorship programs. By contrast, if the higher priority in your company is upskilling employees in specific technical skills, then specific courses, certifications, or on-the-job training programs might be better suited.
Having a clear idea of your business goals and individual employee objectives will really help clarify what the best delivery method is for each individual case.
5. Establish metrics for success and track progress
Define what success looks like and how you will know if you hit it. If you can’t measure the impact of an initiative, you can’t know if it is worth continuing.
Decide on a few key metrics tied to each objective and keep an eye on them. Don’t overdo it — one or two metrics per objective is all you need. Effective employee development plans are simple. The more you overcomplicate it, the less likely employees are to follow through and hit their development goals.
6. Encourage regular feedback and adjustments to the plan
Monitor the success of your efforts by meeting regularly with employees and gathering their feedback. You want to make sure what you’re implementing is actually feasible in practice for your employees. Otherwise, it’s just theory on paper.
If employees complain of the same obstacles repeatedly, like not enough hours in the workday or struggling to prioritize development goals, identify ways to remedy the situation. Perhaps revise the timelines in their SMART goals or hold a space for a 1-to-1 to reengage them with the importance of the project.
7. Promote mentorship and coaching opportunities
It can be intimidating for more junior employees to approach their seniors and propose a mentorship. Building mentorship and coaching into company policy can be a great way to create a culture of internal movement and growth from within the organization.
Create an employee development initiative that systematizes the process of approaching someone for more formal tutelage. This gives the training a more official feeling, where it can be easy to slip back into informal touch-bases, especially if the mentor is also the employee’s manager.
If this doesn’t sound right for your organization, you can always promote external coaching opportunities. Consider allocating each employee a personal development budget to use on mentorship activities that align with company goals.
8. Review and renew the development plan annually
Once a year, take a step back to look at the bigger picture. How effective was the company as a whole at accomplishing the goals outlined in step one? What went well? What could be improved?
Consider both quantitative feedback (metrics hit) and qualitative feedback (what employees are saying) when evaluating the success of the initiative.
Effective employee development plan examples
Below, we’ve outlined two employee development plan examples to help illustrate what this theory might look like in practice for various positions in different industries.
Example #1 — Climbing the ranks
Short-term goal: Get better at analyzing campaign results and extracting insights
Objective: Understand data analysis better
Action: Take a Marketing Analytics course
Metric: Complete the course by July 1st
Long-term goal: Become a Head of Marketing
Objective: See the marketing theory in action in the real world
Action: Network with performance marketers to understand what they experience and how they tackle problems
Metric: Attend 2 events and get 5 quality contacts per quarter
Example #2 — Budding out on your own
Short-term goal: Gain experience in current production assistant position and build relationships in the wider documentary industry
Objective: Build relationships in the documentary industry
Action: Grow a network
Metric: Gain 500 professional connections on social media by end of year
Long-term goal: Become a documentary producer
Objective: Find my own style as a filmmaker
Action: Create a portfolio by creating various mini-documentaries from start to finish
Metric: Publish 3 completed projects in 6 months
Employee development plan template
There are many different types of employee development plans. If this is something new for your team, starting out with a development plan template can help streamline the process and ensure fairness and consistency until you figure out exactly what works best for your organization’s needs.
Top tip:
Click the image above to download your free template. Or, click here. Make a copy of the spreadsheet and fill it in with your own information!
Hire employees with the right skills
Talent management is much easier if you’ve hired the right talent in the first place. Platforms like Toggl Hire can streamline the hiring process by helping companies identify candidates who not only possess the necessary skills but also show potential for future development within the organization.
Toggl Hire’s skills tests aren’t just for candidates; they can also be used for internal purposes. Tap into our library of expert-made skills tests to help identify standout talent, skills gaps, and opportunities for development. Our skills test questions are created by subject matter experts to reduce unconscious biases and increase diversity. The best bit is that your test-takers will love them, too.
See for yourself! Create a free account and start building a skilled and adaptable workforce today.
Julia is a freelance writer and fierce remote work advocate. While traveling full-time, she writes about the intersection of technology and productivity, the future of work, and more. Outside work, you can find her hiking, dancing, or reading in a coffee shop.
