Building a business case for leadership development

The world we work in is changing. Globalisation, employment laws, talent shortages, outsourcing, shifting demographics and an ageing workforce are transforming company structures and cultures.

Leadership isn’t important.

Leadership is essential. There is a well known phrase that reminds us “people leave their managers not their jobs”. Poor leadership leaves employees feeling uncertain about the future and undervalued. Good leadership creates a stimulating environment leading to higher levels of performance and greater levels of retention.

The National Strategic Skills Audit for England anticipates a net requirement for 2.2 million corporate managers over the decade to 2017. The Audit says higher skilled occupations of managers and professionals will dominate future jobs growth according to its 'for Jobs: Today and Tomorrow' report.

As an organisation, you need to move with the times to ensure that you are not left behind by these global trends, as well as taking steps to assure that you achieve the maximum benefit from your performance initiatives. To succeed in this environment, you must do these things:

Identify and retain high performers

The ability to identify top performers with leadership potential allows you to focus efforts on reducing the high cost of turnover. Data from Cornell University shows that the cost of losing a single position can be as much as 30%-150% of the annual salary (Source: Talent Powered Organisation). According to 1994 research published in the Harvard Business Review, a 5% increase in employee retention can generate a 25%-85% increase in profitability (Source: Harvard Business Review).

Focus on where to invest

The focus on where to invest will be best determined by desired outcomes. Is there a need to develop the ability and knowledge of a select few? Or is the aim to create a leadership culture in which all or many employees build a stronger sense of what leadership means across the business?