How to Improve Employee Retention? Better Leadership Development
One of the disruptive trends in talent development is that the labor market is becoming more challenging.
Why is that? One word: Millennials.
Millennials have gained a reputation as restless employees, inclined to leave for new companies when they don’t get what they want out of their current employer. In order to improve employee retention, businesses need to spend more time connecting with their Millennials (and all employees), and delivering what employees want in an effective way. One thing that most workers desire is an opportunity to advance in their career, thus leadership development should be an important component of employee retention strategy.
Why Focus on Leadership Development to Improve Employee Retention?
In a Harvard Business Review article, Gallup asked workers from different generations what they found extremely important about a new job:
- About 60 percent of younger workers said they wanted an opportunity to grow, and about half hoped to have a chance to progress further along in their careers.
- Baby Boomers and Gen Xers also found these factors important, but they didn’t put quite the same emphasis on them.
- Workers of all ages cared about management quality.
In a survey recently discussed by Eric Spicer of Arizona State University, employees said that leadership development opportunities can keep them more engaged and motivated. Spicer also discussed that high turnover can significantly reduce profits and threaten an organization’s sustainability. By implementing leadership training, companies can improve employee morale and loyalty thus enjoy a competitive advantage in the marketplace because of lower turnover and better management.
Developing Effective Leadership Development
According to McKinsey, most CEOs rate leadership development as a priority yet at the same time, very few CEOs are currently satisfied with their own company’s efforts. McKinsey offers the following tips to develop effective leaders:
- Matching programs to real-world situations in a specific company
- Recognizing that changing behavior may require changing attitudes
- Measuring results and adjusting accordingly
Although employees desire career trajectory and leadership development, companies need to recognize that not every employee will make a great manager. According to Gallup research, companies aren’t always very good about selecting people to groom for management. Only about 10 percent of employees have the characteristics to become great managers, and perhaps another 10 percent could become decent managers with proper training.
Most companies do employ the next generation of great managers, but they probably only have a few. In addition, businesses have to understand that the most productive employee won’t always be the best candidate to manage other employees. Current managers need to recognize the characteristics of good managers and groom them appropriately.
Leadership Development is Not One-Size-Fits-All for Every Employee
Harvard Business Review found that only about one-third of workers actually hope to get promoted to management, and far less have the ambition to occupy an executive suite. While most employees want a chance to progress in their careers and perhaps, become better leaders, they don’t all want management to be the main focus of their job description.
Companies also need to retain key employees who will follow technical, training, or other tracks in their careers. To improve employee retention and morale, it’s best to focus on identifying potential managers and other key employees. Then businesses might prosper if they develop leadership training programs with different goals for different sets of employees.
Proper Leadership Development Offers Companies a Competitive Edge
Most companies will benefit by figuring out what their employees want from their careers and then placing them in positions where they have a chance to achieve these goals. When people see that their companies are actively investing in their own development, the result will likely be higher employee engagement and better performance. And it will start to feed a positive cycle that can bring your organization to new heights.