For decades, an effective learning and development program has been considered an important part of an employee engagement and retention strategy. New research, however, shows that its level of importance has been understated—significantly, perhaps even tremendously.

Having happy, motivated and engaged employees is critical for organizations. Engaged employees power growth and innovation. According to Gallup, companies with highly engaged workforces outperform others by 147 percent in earnings per share and have 25-65 percent less turnover, depending on whether they are low- or high-turnover organizations.

As leading HR analyst Josh Bersin has written, “If your people love their work and the environment you have created, they will treat customers better, innovate, and continuously improve your business.”

Yet most people don’t love their work. The percent of engaged U.S. employees has been hovering around 30 percent for years, according to Gallup, which reports that disengagement costs the nation’s employers $450 billion annually. Given the low engagement numbers and an improved market for job seekers, it’s no surprise that 21 percent of talent is expected to change jobs within the next year.

It’s also no surprise that 87 percent of business leaders call engagement and retention urgent or important, making it the top global HR challenge, according to Deloitte’s Global Human Capital Trends report.

What role can learning and development play in improving engagement and retention in your organization?

For Gallup and others, L&D has long been an important, but supporting tool in driving employee engagement. An employee’s relationship with his or her direct manager was considered the most important factor in being engaged/unengaged.

Recent research calls that into question. A 2014 Aon survey found that career opportunities, which have a powerful connection with learning and development, were the No. 1 driver of employee engagement. Plus, a study by CultureAmp found that development opportunities have three to four times greater impact on retention than a person’s relationship with his or her immediate manager. In fact, CultureAmp found that career development ratings were substantially more important than any other factor.

Today’s business realities make effective learning and development a true need. “Consumers and employees have almost instant access to information, yet less face-to-face interaction,” the Aon survey report notes. “All of these things point to evolving requirements for businesses and employees alike where agility and the constant need to stay relevant become prerequisite. The emerging talent imperative is at this intersection between business and employee requirements. Fundamentally, companies will need employees to go above and beyond in different ways— not just to engage by working harder, but to engage in ways that show resiliency, learning, adaptability and speed.”

Perhaps recognition that they need employees to be continually learning (such as staying current with technology and developing related skills) has spread to employers. According to the learning and development findings in Deloitte’s Global Human Capital Trends 2015 report, “Learning and development issues exploded from the No. 8 to the No. 3 most important talent challenge in this year’s study, with 85 percent of survey participants rating learning as a ‘very important’ or ‘important’ problem. Despite this demand, capabilities in learning dropped significantly; the gap between importance and readiness was more than three times worse in 2015 than in 2014.”

In other words, in general, recognition hasn’t yet turned into action. But with employers putting a higher priority on L&D, organizations that fail to address the challenge could find themselves at a competitive disadvantage.

After all, creating a learning organization fuels the creation of a culture of innovation and growth. As the authors of the book Lean Enterprise advocate, to create such a culture it’s important “to consider (employees’) ability to acquire new skills, instead of taking a ‘bank account’ view that focuses on people’s existing capabilities.”

Interestingly, learning contributing to happiness in the workplace just confirms a widely accepted theory in psychology: learning makes people happier in general. In a recent article in Psychologies Magazine titled “Want to be Happier? Learn Something New,” Vanessa King, a positive psychology expert at Action for Happiness, noted that learning new things is “actually a core need for psychological wellbeing. Learning can help us build confidence and a sense of self-efficacy. It can also be a way of connecting with others too. As human beings, we have a natural desire to learn and progress. Psychologists call it mastery.”

An interesting part of that statement is learning “can be a way of connecting with others.” As well as improving employee engagement and retention, effective learning and development programs help forge team cohesiveness. This point is supported by the CultureAmp study, which found career development has the strongest effect on team commitment of any factor.

As an employer, the takeaway from the latest research is clear: an effective learning and development program can go a long way to helping you meet the critical challenge of maximizing employee engagement and retention.

In other words, not only will your employees be happier if you have an effective L&D program, you will be too.