The number of companies that have hopped on the leadership development bandwagon continues to grow, and the reasons to invest are becoming increasingly apparent as companies adopt new metrics to contribute to growth. Leadership development yields some incredible perks for both the individual and the organization. For example, increased engagement, lower employee turnover, and improved performance all have direct impacts. Which makes sense as it is described as a process that enables individuals to perform at their highest level.
It might not be too surprising when we talk about the overall benefits leadership development has for a company’s profitability. Companies that utilize leadership development programs have seen dramatic increases in revenue and improved profit margins. As a matter of fact, PWC reported that leadership development helps improve an organization’s financial performance, adding that companies with better investments in human capital generate returns that were five times higher compared to organizations with less focus on their human assets.
In case you need more convincing, here is a deep dive into the top 5 benefits of leadership development.
Increase Employee Engagement
If your employees are disengaged, odds are they feel like they are in a stagnant role with little to no opportunity for growth. And when a lack of motivation is in effect, a severe decrease in performance follows.
Engagement begins when an employee feels confident in their role. In addition, employees seek validation from their employers. Investing in their leadership development proves that they are invaluable to the success of the company, that the work they are doing is appreciated, and that the opportunities are endless. Employees want the security of knowing they have the potential to move up in the rankings, learn valuable skills and/or make an impact on the organization as a whole. Contributing to leadership development gives employees a chance to face challenges confidently and thrive professionally.
According to The Society for Human Resource Management (SHRM), the cost of employee turnover requires on average 6 to 9 months of an employee's salary to replace him or her. In addition to the time and money spent finding a replacement, the remaining team members are forced to adapt to changes, like an increased workload and communication gaps, as a result of the loss. All of these challenges create resentment within your remaining employees, causing a ripple effect in turnover.
The key to reducing turnover is incorporating training and development into your retention strategy. Providing leadership development improves communication, strengthens trust and enables transparency between employees and employers. All of these factors are crucial in creating an enjoyable working environment and avoiding turnover.
Develop Future Leaders
Creating a framework for the future of your organization begins with its future leaders. By providing a culture that revolves around growth and development, you are establishing a long-term, internal leadership talent pipeline. Your employees will feel stable within the company because their growth is being invested in. They will also attain new skills to take on higher level roles when the time comes. Leadership development is one of the most efficient ways to show your employees that their efforts are needed and appreciated. In addition, leadership becomes a shared goal, retaining your employees becomes much easier and high performing, engaged leaders are established.
Attract Top Talent
Working remotely has become extremely common in today’s world. In fact, the number of individuals working from home has skyrocketed by 140% since 2005. This is great for job seekers because remote flexibility presents opportunities that otherwise might not have been considered if they were on-site. This also makes the demand for quality candidates more competitive. And according to Manpower Group, 72% of employers are having a hard time finding skilled candidates; a factor that has influenced many companies to adopt or reconsider their employee development programs.
Investing in an employee’s development attracts quality prospects. High performing job seekers are looking for a career that provides them with opportunities to grow on a long-term scale. Learning and development programs create powerful leaders, thorough communication, and an innovative culture.
While companies are consistently seeking opportunities for growth, so are their employees. Enhancing a culture through leadership development not only enables professional growth, it provides employees with a chance to grow personally. According to Deloitte research, organizations that have a strong learning culture are 92% more likely to develop novel processes and products. In addition to creating a symmetry between work-life balance, learning development exposes your employees to an external perspective, so they can create more efficient processes and practices while learning new skills to apply to their role.
By adopting new skills and teachings, leadership development can provide insight through innovation. Having an external viewpoint sparks fresh conversations and ideas that might have never been considered otherwise. It challenges employees to think outside of the box and adopt and apply new creative metrics to do so. In addition, extending leadership training programs across teams enables new skills and perspectives when it comes to adapting to changes; yielding a culture of resilience.
Leadership thrives on learning. But providing your leaders with the tools they need to reach their full potential demands a delicate approach. Valor Performance coaching applies a customized model for each individual within every organization while measuring scalable progress. Explore Valor Performance coaching: Schedule a demo.