According to Deloitte, 89% of companies say it is “urgent” or “important” to strengthen leadership within an organization, but only 13% reported that they do an excellent job of developing leaders at all levels.
But why is this important? There are several reasons, and these are the three big ones:
“People don’t quit companies, they quit their bosses.” According to Gallup, about 75% of voluntary resignations are things that can be controlled by their managers. When people leave, the cost of replacing them and getting new people up to speed can cost upwards of 200% of their salary. That’s assuming you can find a skilled replacement. In 2018, the Business Development Bank of Canada reported that the labour shortage across the country is expected to continue for at least another 10 years. The greatest impact will be felt in Ontario, Atlantic Canada and British Columbia. If the manager continues to be an issue, chances are the new people won’t stay long, either. What does 200% of a single person’s salary look like in your organization? What does it look like if you multiply that with all of the turnover you’ve had in the last year or two?
Increase productivity. What’s worse than voluntary resignations? People staying in their role but are not productive. In a different report, Gallup said that only 21% of employees strongly agree that their manager motivates them to do outstanding work. What would happen if the managers in your organization were able to double the number of your employees doing outstanding work?
Secure the future of your company. As labour shortages are expected to continue for at least the next decade, having a plan in place to ensure strong leadership throughout your company is critical. Being able to hire someone with the skills necessary when the time comes is more and more unlikely. If your plan is to promote current employees into leadership roles, think about the types of skills and abilities they will need to know to be effective later on. Chances are, they won’t be the same skills and abilities that were effective for you. Gartner predicts that effective teamwork and collaboration will be top skills required by 2030. As artificial intelligence replaces manual work, the ability for people to work well together will increase. The ability to navigate conflict and difficult conversations between individuals will become a mandatory skill for effective managers.
Certainly, change will be constant in the workplace of the future and effectively managing that change will also be a required skill for future leaders. I invite you to explore the development opportunities available on our website.