The takeaway: investing in leadership development is a smart move, particularly in times of crisis and uncertainty.
It’s nearly mid-March 2020. It feels like the Stock Market has lost its mind. Uncertainty around COVID-19 and the global economy has given everyone the jitters. Business leaders are expressing unease, too. We’re hearing it from our colleagues, clients, and fellow business owners. Regardless of how COVID-19 spreads, it’s the fear that’s most contagious.
Fear and uncertainty can make people do short-sighted things. One such example is slashing leadership development programming designed to strengthen the company’s leadership pipeline. Why is this so crucial? It has a huge impact on businesses’ ability to weather adversity. According to a survey by Deloitte, 86% of business leaders know that their organizations’ future depends on the effectiveness of their leadership pipelines. Only 13% of those surveyed had confidence in their succession plans, with 54% reporting damage to their businesses due to talent shortages.
When crisis and uncertainty hit, these issues show up in full force – and have big downstream impacts.
Invest now, or pay later
During the financial crisis of 2008, many companies laid off workers and froze hiring, forcing workers to do more with less. Often a lot less. Investment in leadership pipeline development plummeted while leaders struggled to “keep the lights on.” The impacts of these cuts are still being felt, more than a decade later.
There are still too few seasoned mentors and professional development opportunities for early- and mid-career employees – which can lead to employee dissatisfaction and high turnover. Senior leadership lacks strong heirs and succession plans to support their companies’ growth (only 13% of executives expressed confidence in their succession plans). Cutting leadership development investment now makes this problem much worse – at a time when companies are having to be more nimble, responsive, and resilient than ever.
Engaged employees help navigate rough waters
One of the best investments business leaders can make is in their employees. It’s also a key motivator for increasingly crucial employees. Nearly 80% of Millennial workers – many of whom have moved into key middle management roles – say professional development is a top factor in keeping them loyal to their company. Professional development is key to keeping employees engaged, and engagement is a key factor in productivity. In fact, nearly $500 Billion a year is lost due to employee disengagement.
Replacing key employees is very expensive – it can be 50% – 150% salary for key middle- and upper management. Investing in tomorrow’s leaders drives up productivity and reduces expensive attrition. This allows companies to realize more value per worker. That’s especially crucial during times of crisis.
The takeaway: investing in employee development is a smart bet, particularly in times of crisis and uncertainty. Whether you’re an employee looking to advance your career and stay competitive or a company leader working to secure a crucial leadership pipeline, now’s the time to invest.
EWF has proven, actionable leadership development programming for early- and mid-career women and customized leadership programming for companies to invest in their pipeline. Don’t wait – you’ll need this development now more than ever.