Retaining high-performers is more important today than it has ever been. It’s also harder than it’s ever been. Many companies it seems are caught in an “arms race” of sorts, in an ever-escalating benefits and perks war to try to draw in top talent. The latest “hot” version of this includes things like paying for an employee’s wedding or leasing hybrid cars, if you can believe it!
While these kinds of extreme rewards might look attractive, there is no evidence suggesting that creative perks will keep your top talent once you’ve drawn them in. In fact, the latest MIT Sloan Management review suggests otherwise, including revealing data about why employees are leaving en masse from today’s organizations.
Boiled down, the top reason is simply this: today’s employees are quitting bosses and leaving toxic teams behind – and they are leaving in droves. They have an unspoken zero-tolerance policy for persistent dysfunction at work. The reality is that today’s organizations must solve for this or else pay the price for ignoring it.
This begs a critical question: What is the most efficient way to correct toxic culture issues that cause a high turnover? Some of today’s top researchers like Deloitte, Center for Creative Leadership, and McKinsey have arrived at the same conclusion, and that is that the simplest solution is an effective leadership development strategy. Here are three data-driven reasons why this is so critical right now.
According to the Center for Creative Leadership, employee retention is 20% higher in companies that focus on leadership development. This makes great sense. People crave growth. They also long for the fulfillment that comes when they can see how their work makes a real difference. When you grow people into leaders, the leaders themselves get these benefits, but they also give them because they become growers of people (not just master task-executors). They help employees feel like they belong, that they matter and that they’re needed. And when your people feel that way, they are much less likely to leave you.
Another huge benefit is that your bottom-line business performance will increase. Stock market returns are 5% higher for companies that invest in growing their people into strong leaders. As the Conference Board’s latest report shares, “Developing, coaching, and promoting people internally is significantly less expensive than the costs typically required to hire someone externally.” There are costs whether you invest in leadership development or not – but it will hurt less if you are proactively growing people who stay and become the kind of employees your organization really needs.
Another reason why growing your own leaders is so important is that leadership development organizations are 11 times more likely to have a high number of leaders who can build talent for competitive advantage, and a 7 times greater likelihood of inspiring people to follow them (Bersin). If people feel like they are contributed and they are inspired, they aren’t going anywhere.
You can proactively prepare people for leadership – or reactively repair the fall-out of poor leadership.
It seems that the real question is whether you want to be proactive about resolving your retention and/or culture challenges, or whether you’d like to take your chances and simply respond after the fact (reactively). The evidence convincingly suggests that when you grow your people into leaders, you create a ‘built to last’ kind of organization. Toxic culture and disengagement issues gradually disappear, right along with the retention challenges that always follow these problems.
When you grow your people, they will grow your organization for you. True story.
People Acuity is the branded “power skills” solution of the Thrivin corporation, which exists to provide career pathing opportunities for job-seekers, career-growers, and employers. People Acuity programs support Thrivin career-seekers to gain the needed “power skills” (soft skills) that complement job-specific hard skills. People Acuity solutions also help Thrivin-supported employers to strengthen their current/emerging leaders, and increase retention, engagement, team effectiveness, and change agility.
This article has been written by DeAnna Murphy – the Chief Knowledge Officer for Thrivin and principal author of Shift Up! Strengths Strategies for Optimal Living and Choose to See You – in collaboration with Dr. Steve Jeffs. DeAnna and Steve are both Top 100 Global Coaching Leaders who have provided keynotes and leadership development experiences to leaders and teams in 58 countries.
A Mini-Case Study in Company Culture Transformation
David Thompson, the CEO of Factory Outlet Trailers, Canada’s largest individually-owned trailer retailer, has taken to heart the importance of proactive leadership development and the intentional creation of company culture. When a global pandemic threatened to shut his business down, he refocused his people’s energy from fear and loss to helping each other learn and grow to get through a tough time.
His strategy included taking the entire organization through a transformational Self-Leadership learning experience that helped individuals learn their own strengths and take responsibility for themselves and create their own conditions. It also included leadership and team coaching for all leaders. In a million years, he never expected to see the results that followed!
Within eighteen months, Factory Outlet Trailers had nearly doubled in size and revenue. Talk about bottom-line business impact! According to David’s calculations, for every one dollar he spent to help his employees and leaders grow, he got $5,000 back – a 5,000% ROI! Jason Chesko, his vice president of sales reported that their learning experience, “led to multiple best-ever sales months and performance-busting records, all happening during COVID when others’ businesses were struggling.”
Growing your leaders can help you too – and help you solve some of the biggest challenges you are facing today. Let’s talk about how you might be able to do this. Just like David did.
Reach out to Justin Fife, email@example.com today to set up a time to visit about your organization’s needs.
Discover Six Company Culture Secrets Every Leader Should Know