Running a business requires making many different kinds of investments. A company invests its money and resources into advertising, research and development, social media, partnerships, technology, security, and much more.

In turn, employees invest their time, energy, talents, and the very best of themselves into the success and vision of your company.

But how, and why, should investments be made in your employees?

Why is it Important to Invest in Your Employees?

When you invest in your employees, you also invest in the future of your company. It may be the best way to raise the value of your company and secure your place in the market, and it doesn’t have to cost much at all.

By using a few inexpensive tactics, you can help your employees gain company loyalty and be more interested and involved in their work. Plus, once you’ve established a culture of employee development, you’ll also start to attract new talent to your business.

Why and How to Invest In Your Employees

Here are the top 10 reasons why investing in employees is good for them—and for your company’s bottom line.

1. Employee Turnover Can Be Costly

The cost of replacing employees can be double the price of their salaries (or more). If you build good relationships with your employees by investing in their talents, you can save yourself the expense of losing their skills, recruiting and training new employees, and other costs of employee turnover. To prevent turnover, it’s important to invest in employees from the start. Consider these tips on investing on new hires:

  • Give them an overview of core business values
  • Provide insight into how their role is part of the company’s mission
  • Set aside a time for them the chance to ask questions
  • Create opportunities for interactions with the rest of the team

2. Poor Communication Causes Misdirection

A study of 400 major businesses discovered that poor communication that results in employees’ efforts and talents being misdirected costs organizations millions of dollars each year. You should invest in good training, informational materials, and whatever else is needed to guide your employees to make good decisions and take effective action.

3. You Can Attract More Talent

If you invest in growth opportunities for your employees, they’ll share that fact with the people in their professional network and write about it on popular job boards. Similar job seekers will read about you, gain a favorable impression of your company, and want to work for your organization.

4. Ongoing Training Retains Motivated Employees

A study conducted by IBM found that staff members were 12 times more likely to leave a job if the company wasn’t helping them grow in their careers. Smart companies invest in motivated employees by giving them opportunities for job training and growth. Some training opportunities could be:

  • How to identify strategies for team collaboration
  • Create problem-solving processes
  • Develop open communication processes that provide structure the team
  • Ways to easily coordinate between other teams in the company
  • Establish plans for delivering information to clients or stakeholders

5. Equipping Employees to Manage Themselves Avoids Micromanagement

When companies don’t invest in helping employees do their jobs well, their employees procrastinate because they aren’t sure how to begin or complete their assignments successfully or they make mistakes because they’re confused about what is required.

This often leads to micromanagement, which has been found to lead to higher turnover, poorer teamwork, and health problems. Investing in training and job resources allows employees to better manage themselves and be more productive.

6. Employees Who Share the Company’s Values Fosters Loyalty

Many employees, especially younger workers, are willing to accept lower pay if the values of the company closely mirror their own. Spend some time learning what is most meaningful to your employees about their work and update your corporate values with their input. This can foster greater employee loyalty and commitment to the organization.

7. Employees Are Attracted to Lower Healthcare Costs

A Harvard study found a very high rate of return from corporate programs that encourage better health among employees: more than $3 in healthcare savings for every $1 that companies spend.


Better health helped save an additional $2.73 from lower absenteeism for every $1 spent. Investing in employees’ health is good for business in numerous ways.

8. You’ll Gain a Reputation for Promoting Great Work-Life Balance

Some companies get short-term results by pushing their employees to work crazy hours and carry an unreasonable workload, but those employees generally won’t stick around for long.

Instead, invest in improved strategies that will allow employees to spend more time at home, which will build your reputation as a caring workplace and allow employees to give the best of themselves during the hours they spend at work.

9. Employee Productivity Increases with Better Teamwork and Camaraderie

If you put time and money into encouraging employees to play games and attend off-site team-building activities together, you can build a better team environment and culture, which translates into better teamwork and camaraderie between employees and increased productivity at work.

10. Engaged Employees Maintain Effective Customer Service

When you create the conditions for employees to feel more engaged in their work, they convey a much more authentic, positive representation of your company than any amount of advertising can do. A Gallup report stated that engaged employees can even increase sales by around 20%. Satisfied employees lead to satisfied customers.

Explore CMOE’s Coaching Skills portfolio to begin achieving results for your business coaching needs.

What is Long- and Short-Term Investments in Employees?

Google made a significant long-term investment in its employees: staff members are encouraged to use 20% of their time (or approximately 1 day per week) on projects they feel passionately about but that don’t have an immediate, obvious return.

In the long run, that investment has resulted in major innovations and products, such as Gmail and Google Maps, and all it costs Google is the employee’s standard salary for that time.

Smaller companies—even startups—can adopt a similar practice to create an exciting culture where employees are encouraged to innovate and experiment with new ideas.

For easy short term investments, make sure that your employees’ immediate needs are being met. If you find that there are struggles arising, find out what is preventing your employees from being fully present at work. Some employees might need daycare for their children, laundry services, car washes, free meals, or an allowance for educational conferences, classes, and materials. Developing resources to check in and provide aid could lead to long-term success.

Making an Investment in Your Employees and Your Business

Investing in your employees takes some money, time, and effort, but it’s an investment worth making. Implementing any of these suggestions can give you real financial returns and benefit your company in the long run.

Creating a culture of engaged, happy employees is well worth the effort. Ongoing training and growth opportunities support, develop, and sustain a vibrant workplace that will attract and retain talented employees—something that’s good for them, their work, the team, and the business.

Recommended For You:


Learn More

Professional Development Programs for Employees

Learn More
About the Author
CMOE’s Design Team is comprised of individuals with diverse and complementary strengths, talents, education, and experience who have come together to bring a unique service to CMOE’s clients. Our team has a rich depth of knowledge, holding advanced degrees in areas such as business management, psychology, communication, human resource management, organizational development, and sociology.

Get Exclusive Content Delivered Straight to Your Inbox

When you subscribe to our blog and become a CMOE Insider.

And the best part?

It's 100% free.