Recently, I have been speaking with several organizations that are creating programs to develop their future leaders. They want to create a sort of “Leadership Academy” that will turn employees into the type of leaders that can motivate and manage effective teams. They have identified “High Potential” employees that have demonstrated the will and ability to become leaders in their organizations.
Why are so many teams looking at investing in developing their people? The reason is simple, the return outweighs the investment. Where can we look to prove it is worth the investment? Here are five areas that will positively impact profitability when organizations proactively train future leaders:
- Enhanced retention and productivity. Over the years, multiple studies have been done on the cost of turnover. While the cost varies depending on the study, it typically equates to somewhere between 30% to 150% of the employee’s annual salary. Compounding the problem of the high cost is that the amount of turnover is expected to increase: one Deloitte study found “43% of Millennials envision leaving their jobs within the next 2 years”. How does training help? Employees who are being trained and/or mentored are statistically more engaged. They feel more valued, confident, enthusiastic, and empowered at their jobs. This translates to higher retention and productivity for organizations that invest in training their people.
- Standardization of work processes. Most of us have heard the old saying, “Employees don’t leave their jobs, they leave their managers”. This means that one department might have a great manager with little turnover, while another may have a manager that does not know how to lead which generates high turnover. Today’s organizations need standard leadership processes that can help managers keep their teams engaged. When organizations take the time to train their people on leadership processes such as how to delegate, coach and hold people accountable for results, it creates consistency across departments. It also ensures employees are being developed as well as being treated fairly and consistently.
- Reduced waste and rework. Rework and waste are two of the biggest productivity and profitability killers! These are often caused by inadequate processes and poor communication skills. When taking the time to train leaders and employees on the proper processes and procedures to make change orders and/or troubleshoot quality problems, organizations can see a significant reduction in waste and rework. This investment in development alone saves valuable time, increases productivity, and grows the bottom line.
- Improved workplace morale. With more and more employees working remotely, workplace morale has begun to deteriorate. According to a 2020 Gallup poll “54% of workers are not engaged”. Lowered morale may cause a disconnect between employees, peers, managers, and the company. This creates a decline in job satisfaction, decreased productivity, and increased absenteeism. Training that can bring leaders and employees together remotely or face-to-face provides an opportunity for them to rebuild the workplace community and feel connected again.
- Higher customer satisfaction. Training your leaders on how customers should be treated empowers them to work more effectively and efficiently. Customers can feel the difference between organizations that train their people with good customer service and those that don’t. Higher customer satisfaction leads to higher customer retention and ultimately a more profitable bottom line.
Organizations that take a proactive approach to train their employees to become the future leaders of their organization are going to have a distinct advantage over their competition that does not. They will be more productive and profitable as they maximize their most valuable asset – their people.