Workplaces can do 1 simple thing to help employees grow, says expert: ‘If you could do that for $1 per leader, you should’
By | Natasha Piñon | www.cnbc.com
One number stands between thriving and floundering workplaces: $2,500.
That’s the most 65% of businesses spend per year, per employee on leadership development, according to a survey of more than 700 HR leaders conducted by Forrester and HR Executive Magazine.
It’s a paltry sum for many companies, but when spent intelligently, it can help promising employees become effective leaders, says Katy Tynan, a principal analyst at Forrester who co-published the report.
The importance of leadership spending drills down to a simple math problem, she explains. Without quality leadership, employees become disengaged at work, leading to retention issues. Hiring a new employee to replace an old one costs anywhere from an additional 50% to 200% of the role’s salary, Tynan says, based on Forrester’s analysis.
That means if five employees making $100,000 annually quit, your company might need to spend $500,000 replacing them. Suddenly, $2,500 per employee doesn’t sound like much, Tynan says.
“The way I always frame this for people is in the context of risk, because that’s really what this number represents in a lot of ways,” she tells CNBC Make It.
The problem: Leadership development isn’t something you can simply throw money at. You need to devote time to it too, Tynan says. Here’s her advice for employees who want support, and workplaces struggling to retain them.
Leadership development often takes two forms: Leadership workshops and virtual learning courses.
On their own, neither is particularly effective, Tynan says.