How soft skills development can prevent attrition and boost productivity
Have you ever had the gut-wrenching feeling of a star employee handing in their resignation? It's becoming scarily common for companies in India and Australia.
In India, the median attrition rate of BSE 100 firms reached 17% in 2022-23, up from 10% in 2020-21. According to the EY Future of Pay report, sectors including financial services, professional services, IT and ecommerce are seeing employee turnover rates over a staggering 20% in 2024.
Things aren’t much better in Australia – recent data from LinkedIn revealed that three-quarters (76%) of Australian professionals are actively considering a new job in 2024, up 15% year-on-year.
This creates a worrying problem for employers – high employee turnover disrupts workflows, diminishes productivity, saps morale, and hurts your bottom line.
Yet there is a strategy that can help you increase employee retention and boost productivity:
Invest in soft skills professional development.
Soft skills development focuses on the non-technical skills that aren't typically taught as part of a curriculum, but allow us to function at our optimum. Also known as “human skills”, they include skills like self awareness, communication, creative thinking, and resilience.
In this article, we'll explore how soft skills professional development can help boost retention and productivity.
How soft skills professional development can improve retention and productivity
It’s no secret that professional development is a potent tool for retaining employees. A study in India found that organisations offering professional development opportunities have 15% higher employee satisfaction and 34% higher retention rates than those that don't.
When that training focuses on soft skills, the benefits are even more pronounced.
According to a joint study by Boston College, Harvard, and the University of Michigan, continuous professional development for soft skills such as communication and problem-solving can provide a staggering 250% return on investment (ROI) to the organisation by increasing productivity and retention.
But why does soft skills development have such a huge impact on retention?
Let's break it down.
Professional development keeps employees engaged.
It all comes down to engagement. Engagement is the feeling of connection an employee feels to the organisation. It’s that all-important emotional commitment that means employees actually care about their work, their team, and their company. And when people care, they stick around.
According to Gallup's State of the Global Workplace: 2023 Report, employees who are either not engaged or actively disengaged cost the world $8.8 trillion in lost productivity.
Disengagement also fuels high employee turnover. Another study by Gallup showed that highly engaged teams experience 59% less turnover compared to their disengaged counterparts.
The lesson here?
Keep your employees engaged, and you will keep them – period.
That’s where professional development comes in.
When employees feel their progress is stagnant and there are zero chances for growth, they become disengaged and start exploring other job options.
By offering professional development opportunities, you are showing them that they have a future within the organisation. You’re helping to set them on a path to career advancement, which helps them stay engaged.
To make professional development more effective, it should be tailored to individual career goals, which is where soft skills training really hits the mark. Employees can focus on building their soft skills based on the direction they want their career to go – if they want to step into a leadership role, they can sharpen their communication and negotiation skills.
Professional development gives employees the challenge they crave.
Another significant cause of attrition is the absence of challenge. Employees want to learn. In fact, research by RMIT Online reveals one in two would prefer a "learning" culture over a "fun" work culture. In other words, when it comes to employee benefits, they'd rather have upskilling benefits than free lunches. The same research revealed that one in five would prefer training over a pay increase of $50 per week. That's how important professional development is to your people.
With professional development in soft skills, employees can develop new skills and knowledge – a challenge in itself. They can also gain the confidence and motivation needed to take on new challenges, whether that’s stepping up into a different role or taking on a new project. These soft skills can also bring employees together, encouraging collaboration and innovation.
Investing in professional development shows employees that you care.
Nobody wants to work for an employer that doesn’t care about them, their goals or their future. You need to show your people that you’re invested in their personal and professional growth if you want them to stay.
Investing in soft skills development programs shows employees that you care. You’re demonstrating that you want them to develop their skills, harness their strengths, and grow as individuals. As a result, this nurtures a deeper connection with their work, increasing engagement and motivation and lowering attrition.
Investing in your leaders' soft skills directly impacts employee engagement.
Ever heard the saying, people don't leave jobs, they leave managers?
Managers have an outsized impact on employee engagement. In fact, Gallup studies show that managers account for at least 70% of the variance in team engagement.
Research conducted in 2024 found that 38% of Australian employees feel more productive at work when they have a strong and supportive manager, making it the second-highest driver of productivity, ranking above competitive compensation.
So how do you create leaders who inspire, empower, and cultivate a positive work environment?
By focusing on soft skills development.
Professional development in soft skills can teach leaders:
Communicating with impact: Ensuring leaders can get their message across in a way that really strikes a chord with their audience and inspires action.
Empathy and active listening: Leaders who can empathise and understand employee needs and actively listen will foster trust and build a more positive work environment.
Resilience and adaptability: Change can be stressful. Ensuring your leaders have skills in resilience and adaptability equips them to support their teams and bounce back in the face of setbacks.
That’s only the beginning. Maxme’s Lead & Succeed program aims to develop essential interpersonal, emotional, and cognitive competencies for personal and professional growth, while Lead & Succeed Pro focuses on skills such as managing conflict, difficult conversations, and bouncing back from setbacks.
Build human skills and see organisational success soar
Professional development in soft skills is a powerful element in employee retention and engagement programs, helping organisations retain top talent, reduce turnover rates, and propel productivity. Most importantly, it’s an investment in your most valuable asset – your people – giving them the critical human skills they need to grow and thrive.
For more benefits of soft skills development and tips on how to build a business case, download our actionable 5-step guide: How to Make a Case for Soft Skills Development.
Furthermore, to start developing your human skills today, simply download the Hodie app, or explore Maxme’s broader menu of Products & Programs for organisations and individuals alike.
Prefer to talk through your options? Contact us at any time.