10 Ways Corporate Leadership Training Programs Can Help
Corporate Leadership Training Programs can be costly. They can also be lucrative, rich in rewards that are measurable, far-reaching, and long-term. Research backs this up and makes it worth your while to take a second look at an investment in your emerging and identified leaders.
Business Benefits of Corporate Leadership Training Programs -- 10 Proven Ways
- Retention of high-potential employees
- Improved pipeline for succession management
- Higher levels of customer satisfaction
- Personal satisfaction for leaders who participate
- Stronger innovation
- Strategic focus on the future vs. tactical focus on the present
- Growth in top-line revenue
- Savings in expenses
- Improved profitability
- Increased rates of productivity
Let’s take those one by one and back them up with research and data. The ten items listed above have been grouped into three categories – people impact, future impact, and business performance impact.
It all begins with Employee Engagement. That’s the emotional connection people feel toward their organizations that causes them to apply additional discretionary effort. Here’s how it works: emotional connections make people want to stick around and work harder. When they feel connected, they are committed. As a result, they apply discretionary effort that yields better products and better results, as measured in any way possible.
So, you’re probably wondering, if Employee Engagement yields all that… how do I get higher levels of engagement for employees in our organization? The number one factor in boosting engagement is leadership development. When you develop your leaders, they become more engaging. It really is that simple. Towers Watson summed it up like this “In companies where both leaders and managers are perceived by employees as effective, 72% of employees are highly engaged.”
Unfortunately, according to Gallup, that’s not the norm. Only 34.1% of American workers are engaged. A shocking 23% are actively disengaged, actually working against the organization, says a poll by Modern Survey. This is no small problem!
Also not small: the rewards of taking action to turn this problem into an opportunity. Gallup also found “Companies that increase their number of talented managers and double the rate of engaged employees achieve, on average, 147% higher earnings per share than their competition.”
People Impact from Corporate Leadership Training Programs
When you boost employee engagement by adding leadership development, you get four major impacts on people. They are:
Your superstars will stick around longer. Your team members be part of the 13% who “love their job and are not looking for other opportunities” (TopResume). Kronos says that 87% of human resources executives say improved retention is a high/critical priority. And Korn Ferry says that 90% of executives said keeping new hires is an issue in their organizations.
The Corporate Executive Board concluded that “Engagement is the key to performance and retention. Highly committed employees try 57% harder, perform 20% better, and are 87% less likely to leave than employees with low levels of commitment.”
2. Succession Management
With an aging workforce and frequent movement of talent, 78% of businesses are more worried about a talent shortage than they were last year (Spherion). In fact, 34% of employers told Randstad that talent scarcity is their greatest concern.
If everybody is experiencing this problem, there aren’t many places you can go to replace the talent you lose. When people go, institutional knowledge and bench strength go with them.
When leaders are effective, employees are engaged. Engaged employees stay and commit themselves to the organization and its long-term success. That’s one reason why 49% of HR executives named retention and leadership development programs as their top priorities (Saba Software). The link is clear: “belief in senior leadership is the strongest engagement driver” (Modern Survey).
3. Customer Satisfaction
The impact of leadership development and employee engagement is felt by your customers, too.
Cvent’s research revealed that customer retention rates are 18% higher on average when employees are highly engaged. Demand Metric discovered that “organizations that have over 50% employee engagement retain over 80% of their customers.” Gallup underscores these findings: “Organizations with above-average levels of employee engagement reap 50% higher customer loyalty levels.”
4. Personal Satisfaction
When a company invests in an employee, the employee is invested in the company. Growth and development opportunities closely follow “belief in senior leadership” as the second strongest driver of employee engagement (Modern Survey). 55% of Millennials cite “leadership development opportunities” as a key consideration in staying with an employer (Impraise). Being developed causes people to feel valued. Being valued causes people to feel emotionally committed (engaged!). 76% of employees who do not feel valued are looking for other job opportunities (Lifeworks)…
Future Impact from Corporate Leadership Training Programs
Leaders look to the future. They may have job titles like “Manager,” but they exhibit leadership behaviors that include trying new things, experimenting, taking risks, challenging the status quo, making continual incremental improvements, identifying marketplace gaps and opportunities, and advocating for change that keeps the organization one step ahead of the competition.
These behaviors position a company for growth. They also inspire employees to stretch themselves and enlist in an exciting vision for the future. That’s engaging.
Being personally challenged and inspired counts when it comes to engagement (Aon). 53% of workers say their biggest motivator is having the chance to work on exciting and interesting projects (Elance/Odesk). 82% of Millennials said it was also important to them to have a career that does some good in the world (Clark University).
6. Strategic Focus
Leaders don’t focus exclusively on the tasks that need to get done today. They are strategic, planning and building for the long-term. They know how to build people who will build the organization (which also boosts engagement!). They know how to craft and communicate a vision that inspires others (which is engaging). And they understand that their words and actions matter, so they strategically and deliberately develop their leadership philosophy and align their actions with their words to demonstrate credibility.
These actions help them avoid micro-managing and enable them to trust employees. Trusted employees get opportunities to grow and develop so they can contribute more. When they feel trusted, 58% employees report higher levels of job satisfaction (SHRM).
Only 23% of employees told Gallup researchers that their current job takes full advantage of their skills and knowledge. That explains why 28% of employees are bored every day at work (OfficeTeam) and why 72% say their managers don’t care about them or their career growth (Monster).
Not growing people and not working to prepare the organization for long-term success is a recipe for eventual disaster. Organizations cannot sustain themselves if they cannot keep employees and develop them.
Business Performance Impact for Corporate Leadership Training Programs
7. Top-Line Revenue
A 20% increase in sales was achieved by business units with highly engaged employees (Gallup). In another study, The Impact of Engagement, Gallup tracked 50% higher sales in organizations with above-average levels of employee engagement.
8. Expense Savings
First, you’ll save on recruiting, hiring, onboarding and exiting employees once you improve retention rates. Since Millennial turnover alone costs companies in the U.S. $30.5 billion annually, your savings could be significant (Gallup). Run the numbers – ERE Media projects that it costs 150% of a mid-level employee’s salary to replace him or her and 400% of the salary to replace higher-level and highly specialized employees.
You’ll also save as a result of productivity increases (see below). Less overtime. Less rework. Reductions in absenteeism, tardiness, worker’s comp claims and injuries, AND higher output with better quality.
And then there are the savings that come with customer loyalty – it costs less to work with an established customer than it does to continually go out and replace the ones you’ve lost.
9. Profit Margins
You already sense this. A study by the American Management Association found that 33% of senior executives believe employee loyalty has a direct relationship to profits. In a Gallup study, highly engaged business units produced 21% greater profitability. Temkin’s research confirms these findings – “77% of employees in companies that have significantly better financial performance than their peers are highly or moderately engaged, compared with 49% of employees with lagging financial performance.”
Teams that meet the engagement needs of their employees in everyday work outperform other teams with a 21% higher productivity rate (Gallup). By contrast, disengaged employees cost organizations between $450-$550 billion annually (The Engagement Institute). It’s because, as Kouzes/Posner write, “The best leaders elicit three times the amount of talent, energy, commitment, and motivation from employees compared to their counterparts.”
Wondering what you could expect in terms of productivity increases and the net effect? Drucker’s formula still holds up: “…for most companies in which labor costs amounted to roughly half of their total earnings, a 10% increase in productivity would double most organization’s profits.”
These are real, proven results. They are possible for your organization, too. It all starts by developing your leaders using an evidence-based framework for leadership, one that has over 30 years of independent research and results to back it up.
You Don’t Have to Do It Alone
Would you like to read more stats and findings about employee engagement and leadership development? Click here to get an extensive report with links to the data in this article and much more.
Once you’re convinced that it’s time to take action, give us a call. We build organizational strength by putting people first. Our team of instructional designers, certified executive coaches, trained facilitators and administrators of assessments is here to help you solve these engagement, retention, productivity and other issues.
Bringing leadership development and a true turnaround to your organization is easier than you think. You don’t have to start from scratch and you don’t have to do it alone.