Beyond the Executive Suite
Leadership training helps your leaders become better which tends to have a positive trickle-down effect on the rest of your employees. While this may feel good enough, we want to make a compelling argument for going beyond the executive suite and providing your entire organization with leadership training. We’ve identified a few critical “whys” like retention, productivity, costs of turnover, and even maintaining a stable leadership team that can all be improved through effective leadership training.
1. Retention through upskilling
The first benefit we mentioned is retention, specifically by offering upskilling, a term that refers to “teaching additional skills.” Companies want to maintain their employees because it is expensive to hire and train new employees—more on that later—and upskilling is one way to keep your employees invested in your company.
PwC recently reported that more than a third (37%) of candidates said they preferred opportunities to learn new skills over most other factors, even taking lower pay for a chance to learn. That same group sees upskilling as the most critical factor in choosing a job outside of salary and benefits. This trend continues to grow among millennials, seems to be more important than ever amidst the “Great Resignation,” and can be a great way to set your company apart as boomers continue to retire.
With effective leadership training, you can offer upskilling to your employees and empower them to grow and develop with you rather than seeing them fly away. And all those learned skills can also help them appreciate their time with your company and make them more productive in the process. In our experience, even when clients hired us for team building, the term “upskilling” has always come up, especially in the last 2 years. Simply offering a great bonding experience is not enough, our clients want to enhance their individual team members’ skills.
2. Boost company-wide productivity
Another benefit of leadership training for all your employees is that it will help boost productivity. This is what most companies hope for when they spend resources on leadership training.
The Kellog School of Management found that, across the board, leadership training improved productivity and that teaching across departments provided even stronger results. Specifically, they found that training HR employees helped companies produce more. They reported findings that included increases of up to 5.5% in productivity compared to those that did not engage their employees in training. Beyond that, they found even greater results when HR and other departments all participated in leadership training. The researchers attributed this increase to the nature of HR and their work to incentivize and motivate the rest of the employees in a company.
It all comes down to the fact that when employees are happy, they are productive. We are all human after all and when employees are unhappy, then it’s hard to say how long they’ll stick around. And that’s when costs can really add up.
3. The cost of employee turnover is high
To hire and train an employee costs money, and every time an employee leaves, your company is paying a fair bit of money to replace them. And these changes hit morale and productivity too.
PeopleKeep reported that it can cost a company up to 6 to 9 months of an employee’s salary to replace them. And if morale drops as a result of the departure, you can lose even more. The researchers also found that employee relations are a determining factor in the connection employees feel to their company; 70% reported that “having a friend at work is the most crucial element to a happy work life.” On top of that, 50% of those with a good friend at work felt more connected to the company. And while this makes a huge positive impact, there’s also a negative side because when an employee leaves a company, each person who called them a friend loses a bit of what keeps them working there. And in addition to dinging morale, productivity also takes a hit as the remaining employees struggle to make up for the lost employee. This can dramatically raise stress and lower productivity.
As all of these costs mount, keeping the employees you have becomes more and more critical. After all, “A bird in the hand is worth two in the bush.” Leadership training helps keep employees engaged in the success of your company and their own success within it. On top of that, training offers opportunities for bonds to be built and strengthened within the company and can empower employees to grow and become the future leaders your company needs.
4. Today’s managers are tomorrow’s leaders
As we discussed earlier, one of the essential factors in employees’ decisions of where to work is whether there is room and opportunities to grow. You can provide that room and opportunities by offering leadership training specifically built to help them grow.
An article by Forbes reported that 70% of the variance in employee engagement is due to manager effectiveness and those leaders who have engaging managers are more likely to stay. The researchers urged companies to invest more in leadership training, calling on the old saying, “Leaders are not born; they are made.” We couldn’t agree more.
Along with this, Harvard Business Review found Millennials, specifically, relish feedback—up to 50% more than non-millennials. They prefer to receive feedback monthly, and while they looked to managers as a source of development, only 46% reported that their managers were providing the feedback they desired. Feedback is one of the best ways to grow, and those who accept it and even seek it out can be very valuable to a company.
Building your future leaders while developing your current ones is key to the continued success of your company. Leadership training can help you accomplish both. It can help your managers develop the employees under them and can help those employees as well. When we worked with the Chief Business Officer at Conde Nast on an individual basis, he insisted that we then work with his team because he wanted them to benefit from the same leadership training he’d gone through. He framed it as building the necessary skills they would need to further their careers. The trust and loyalty this leader built as a result of this gift went beyond anything he’d experienced in his career, not to mention the increase in productivity and performance.
The Future for Your Company and Employees
When you invest in the people behind the profit today, tomorrow’s ROI will be your proof of why.
By providing leadership training opportunities for all the people in your organization, you can help them become more valuable, happy and productive employees while avoiding the pitfalls and costs of high turnover rates for your organization.