How Much Does Career Development Matter?
If you want to attract, engage, and retain top talent, career development must be more than a box for managers to check on a performance review. To ensure that they spend their time wisely, busy managers often ask: “How much does career development matter?” We know from organizational culture assessment data that it is a key component to attracting top talent, retaining high performers, and driving long-term business success. So, the short answer is that targeted and effective career development matters — a lot.
The Evolving Expectations of the Workforce
Gone are the days when employees were content to follow a linear career path inside a single organization. Today’s workers — particularly Millennials and Gen Z — prioritize learning and growth over job security. In fact, according to a recent report by LinkedIn, 94% of employees say they would stay at a company longer if it invested in their career development.
This isn’t about a few custom training programs or an occasional online course; employees are looking for personalized, meaningful paths to advance and grow both personally and professionally. Moreover, younger employees expect their managers and organizations to play an active role in shaping their careers. If they don’t see opportunities, they’ll seek them elsewhere.
Business Impact: Retention, Engagement, and Performance
We know from people manager assessment center data that career development directly affects three critical organizational metrics tied to manager performance.
- Employee Retention
Top employees are more likely to stay when they believe their future is being invested in. The Work Institute’s latest Retention Report identifies “career development” as the top reason employees voluntarily leave their jobs — for the 13th year in a row. Replacing a high-performing employee can cost 1.5 to 2 times their annual salary. That’s an expensive price to pay for underinvesting in someone’s career growth. - Employee Engagement
Career growth is a primary driver of employee engagement. Gallup’s research has consistently shown that employees who have regular conversations with their manager about career goals are more than twice as likely to be engaged at work. In contrast, those who feel stuck or stagnating report lower levels of discretionary effort and enthusiasm. - Employee Performance
We know from new manager training that when people grow, individual and team performance improves. A longitudinal study published in the Journal of Vocational Behavior found that employees with access to development opportunities not only performed better but also contributed more strategically. They understood the broader organizational context, made better decisions, and aligned more effectively with company goals.
What Career Development Should Look Like
We know from management development best practices that effective career development is not one-size-fits-all. Career development should be continuous, individualized, and aligned with both employee aspirations and business needs. The most effective talent management strategies include:
- Career conversations that go beyond promotions to explore strengths, motivations, and future aspirations.
- Learning pathways that mix on-the-job experience, stretch assignments, mentoring, business simulations, and customized training programs.
- Internal mobility programs that encourage lateral moves and cross-functional experiences.
- Manager accountability for supporting growth and creating stretch opportunities.
- Clear career frameworks that help employees visualize their options within the organization.
Crucially, development must be embedded into the culture — not outsourced to HR or treated as a side project. When career growth is part of how leaders lead, it creates a talent advantage.
Strategic ROI: More Than a Feel-Good Perk
Investing in career development is not just altruistic — it’s a smart business strategy. Research published in Harvard Business Review shows that organizations with strong learning and development cultures enjoy:
- 30–50% higher retention.
- 24% higher profit margins.
- 92% greater chances to innovate.
Done right, career development dwarfs most capital investments. And the risk of neglecting career development?
- Employee burnout.
- Employee disengagement.
- The loss of top talent to competitors that do invest in growth.
The Bottom Line
How much does career development matter? For people-driven organizations, it’s a talent management imperative. To ensure that your people thrive, your leaders must treat career growth as a core part of their strategy, not a one-time event. Done right, career development fuels engagement, reduces costly turnover, and enhances performance.
To learn more about how much does career development matter, download How Organizations and Managers Must Reassess Career Development