Benefits of Planning for Leadership Development

by | Dec 5, 2023 | Amy Friedman

Leadership development – preparing current and future leaders with skills and knowledge necessary to perform – is an essential part of any human resource department’s duties.  Skills like active listening, emotional intelligence, and providing useful feedback can be taught and should be at least reviewed when filling a leadership role.  However, many companies miss out on the benefits of developing their leaders because they provide the training for only specific moments, or for only specific people.  Planning development opportunities for broader swaths of employees as a key part of your annual budget can have transformational effects on employees, operations and culture.


Better Managers Means Better Retention


The main benefit of leadership development is creating better managers.  This will have cascading benefits, including improving employee retention across the organization.  It’s a well-known fact people don’t leave bad companies, they leave bad managers, but according to recent studies 60% of employees who left positions pre-pandemic reported making that decision “specifically because of poor management.” In 2022, a similar percentage of exiting employees said they felt “disrespected at work.”  Turnover can mean losing organizational knowledge, relationships within and outside of the company, and positive aspects of company culture.  All of those losses will negatively impact profit margins, but there is also a direct cost of turnover, at an average of $15,000 per employee that leaves.


More Productivity & Engagement Across the Board


Another benefit of investing in leadership development is increased productivity and engagement of all employees.  According to Gallup, “70% of the variance in team-level engagement is based on the manager”.  Another study from the Stanford Graduate School of Business found that manufacturing plants can attribute 40% of the differences in productivity directly to the management of each plant – even within the same company with the same CEO.  That’s a huge margin that can be accessed by improving the quality of just the first-level managers, and as employees move up the company ladder, they can bring those leadership skills and results with them.


Foster Loyalty in Younger Employees


One last benefit of investing in leadership development is to foster greater engagement and loyalty in employees – especially in the Millennial and Gen Z cohorts.  According to Deloitte, “Employees under the age of 25 rate professional development as their number one driver of engagement, and this is the number two priority for workers up to age 35.”  And these employees are determined to get what they want out of their jobs – another Deloitte survey found that 37% of employees leaving their positions did so due to “lack of career progress” and another 27% left because their jobs were not challenging them.  The bottom line, according to Monster: “Millennials will work harder ⁠— and remain with your organization longer ⁠— if you convince them that you are invested in their success and their professional development beyond their current role.”  Investing in opportunities for development and providing them to more people will go a long way in getting the most out of your Millennial and Gen Z employees.




Investing in leadership development can provide immediate benefits to your organization, but also pays positive dividends in productivity, company culture, and more.  If you would like help creating leadership development programs for your employees, you can visit our website at, or email us at

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