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Building Your Leadership Budget for the New Year

Building Your Leadership Budget for the New Year

Advocating for your People Budget? Speak the business language of developing your People.

Advocating for your People Budget? Speak the business language of developing your People.

Some compelling facts to keep in your back pocket as you calculate the ROI on investing in your leadership bench:

  • Cost of leadership turnover is estimated at 1.5 to 4 times the annual salary of the departing leader.
  • Time to replace a leader and transition a new leader creates team disruption, including a gap in knowledge, engagement decline, and loss in productivity and project momentum.
  • Highly engaged teams are 21% more profitable.
  • Engagement reduces absenteeism by 41% and boosts productivity by 17%.
  • Disengaged employees are 43% more likely to quit, costing 50 – 200% of their salary to replace.
  • A strong leadership bench has promotion-ready and ready-now successors for key positions reducing the time-to-fill gap.
  • Every $1 spent on leadership development returns $7 through improved retention, productivity and revenue.

Take decisive action to build a robust leadership bench that not only protects your organization from disruptions (which translates into $$ lost!) but also drives measurable gains in profitability, productivity, and retention.

Here’s a quick snapshot of steps to take charge of your leadership pipeline.

 

STEP

ACTION

BUSINESS METRIC IMPACT

Start Early

Begin developing leaders early and continue development at every level.

  • Provide training, coaching, mentorship, and challenging assignments to accelerate growth and readiness.
  • Boosts internal promotion rates.
  • Reduces external recruiting costs.
  • Shortens time-to-fill for leadership roles.
  • Improves employee retention as staff recognizes clear growth opportunities.

Keep It Moving

Regularly review pipeline to ensure it reflects the needs of the business.

  • Assess pipeline for obstacles or stagnation.
  • Ensure there are abundant opportunities for advancement.
  • Remove barriers immediately.
  • Increases the number of ready-now successors for key roles.
  • Decreases vacancy duration.
  • Lessens disruption.
  • Speeds up project execution.
  • Improves employee engagement scores.

Recognize Diverse Routes

Allow for leadership not following a single path.

  • Provide for alternative career trajectories such as technical tracks.
  • Adapt quickly to shifting needs.
  • Improves diversity in leadership positions.
  • Raises internal mobility rates. Increases innovation and cross-functional collaboration.
  • Achieves higher customer satisfaction.
  • Speeds up response to market.

Prepare for Transitions

Disruption from leadership turnover can be minimized if planned.

  • Develop a robust process to capture knowledge from departing leaders.
  • Rapidly prepare successors to step in.
  • Provide support during transition.
  • Minimizes productivity loss.
  • Preserves institutional knowledge.
  • Shortens leader ramp-up time. Improves post-transition performance scores.

Measure and Adapt

Track the effectiveness of pipeline activities and adapt as needs change.

  • Continuously evaluate your pipeline’s effectiveness.
  • Are you meeting leadership demands today?
  • Are you prepared for next year—or the next decade?
  • Use these insights to make swift improvements.
  • Improves time-to-fill rates.
  • Increases retention rates.
  • Better leadership performance metrics which drive overall business growth, profitability, and strategic execution.

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