Why investing in your leaders is a great retention strategy
Leadership development is critical to a company effectively scaling
Grace Tripathy
, Fri 20 January 2023
Do You Have an Intentional Leadership Development Strategy?
As Henry Ford once said, “The only thing worse than training your employees and having them leave is not training them and having them stay.”
Henry Ford’s words have never been more pertinent as organizations struggle to hang onto their top performers in this economy. And though it’s tempting to instinctively go for that new external hire with a lot of ideas, what if there was already an internal leader poised for the challenge?
Leadership development strategies will not only prepare future leaders but improve talent retention across the organization.
When evaluating your own leadership development programs and strategies, there’s only one approach that will set you apart and improve talent performance and retention – and it can be applied to any strategy you already have in place.
Why Is Leadership Development Important?
Leadership development is important because it helps your employees grow. It teaches them how to lead while developing leadership skills and qualities to become better leaders today - and for the future.
Leadership development aims to develop an individual's skills and abilities for leadership. It can be done in many ways, such as through on-the-job training, mentoring or coaching, and self-development.
Another reason leadership development is essential is that it helps organizations grow while they develop their employees' skill sets. In addition, it helps businesses better understand what they need to do to succeed in the future.
Furthermore, it helps individuals understand how they can advance in their careers, take on more responsibility, and become more successful while earning a higher salary.
Employees who can develop their skills and become more effective will be able to serve your organization and its customers better. They will also feel more fulfilled in their jobs, which makes them more likely to stick around longer.
Leadership development helps employees learn new skills and become more effective, which improves their performance as well as the performance of those around them. This can positively impact the bottom line if it leads to increased sales or improved customer satisfaction scores.
After all, high salaries are not the only thing that make employees want to stay. Top-performing employees want to be valued and appreciated for their hard work; relationships and continuous opportunities in the workplace to let their talent shine will motivate them to stay at a company, rather than to leave.
Investing more time to tailor your leadership development strategy though is necessary to stay competitive and increase retention rates. The generic classes and training programs that have been a product of traditional leadership development strategies are not going to cut it. You must intentionally invest in each leader you’ve identified as a top talent. One way you can do that is provide them with executive coaching and metrics via AIM Insights.
Take the 70:20:10 Model for Learning and Development. The learning and development model corresponds to a proportional breakdown of how people learn effectively, based on a survey asking nearly 200 executives to self-report how they believed they learned:
● 70% from challenging assignments
● 20% from developmental relationships
● 10% from coursework and training
This illustrates that every leader learns differently. It’s important to customize your leadership development strategy based on how a top performer processes information. Not only will this better prepare your internal leaders for their career trajectory within the organization, but it’s also a unique benefit that will improve your organizational retention and offer them an incentive to refuse external offers.
Customize your Leadership Development Strategy to Fit Your Organization
Customizing your strategy should build on what you already have in place. For example, pair your top performers with a leadership consultant who can give real-time executive coaching in the moment, whether for general leadership development or while integrating into a new leadership role.
Companies often spend a lot of time, effort, and money investing into their technology, operations, and facilities. While these areas are important places to invest, these companies often end up ignoring the best investment opportunity: leadership development.
Businesses that invest in their employees achieve more success more often than those businesses that do not invest consistently in their people. Studies have shown that employees who went through leadership training programs increased their capability by 25% and their performance by 20%.
During the age of the “Great Resignation,” initiatives that focused on retaining employees were more important than ever. As referenced in this Cornell post, 94% of employees say they would stay at a company longer if it invested in their learning and development.
Having effective leaders who invest in their people’s development is one of the best ways to reduce turnover rates and improve employee satisfaction. Happy employees are more productive, and that energy will resonate throughout the rest of the company.
By training employees in best leadership practices throughout the organization, you create a culture that shows you are invested in the success of employees.
Hayden Brown, CEO of Upwork, who is passionate about “re-engaging and activating the managers in the business,” especially with so many employees working remotely.
Upwork holds a monthly Zoom gathering called One Upwork Forum, where managers can share information with each other about changes their driving, DEI initiatives, and anything they’re struggling with. While this is a candid, peer-to-peer gathering, it’s sponsored by a rotating executive, someone “who’s willing to kind of nurture and be the voice and the champion” of the group, Brown told me.
As Brown put it: “I think that’s been a really great way to drive that engagement and have that group kind of helping each other as they’ve gone through so much change.”
Peer support, as opposed to top-down feedback, offers several benefits, including “insight into diverse perspectives,” “opportunities to practice new skills in a safe space,” and an “enduring support network.” Having managers practice their skills together is also another opportunity for professional development.
