Companies fearing yet another economic downturn are rightfully nervous to overspend. Maybe in a different era, executives could save money by cutting back on a few company perks or employee benefits, but that’s no longer a viable solution. Today, people have more options that give them the freedom to move around in their careers. The best people, and especially leaders, are all free agents; they can go anywhere they want. This is especially true of the best leaders, making them more inclined to choose companies that do more than provide a paycheck. They want to work for companies that invest in them.

So, when executives are rethinking employee benefits, leadership development and investing in their people are no longer luxuries they can afford to lose.

Retaining Top Talent

Top companies are experiencing workforce loss — and it’s not because the talent isn’t out there. The Great Resignation gave employees better bargaining power and more opportunities for freelance jobs and flexible work environments than ever before. Many highly skilled employees no longer need the stability of an office job, that is, unless the office job offers a clearer career trajectory and the chance to gain more skills.

I was working with the head of human resources (HR) today in an iconic brand/company that most of us know. They are requiring their people to come back to the office four days a week, and she was telling me that she knows she’s going to have both talent retention and acquisition issues. The best people are going to go to the organizations that do not require this and that embrace more flexible work arrangements.

Last year, the U.S. Bureau of Labor Statistics found that 3.5-4 million people quit their jobs in the U.S. every month. That bleak number suggests that The Great Resignation hasn’t fully run its course. However, there is just as much research to explore what can be done to improve retention as there is to explain why employees leave their jobs in the first place. Take, for example, LinkedIn’s 2019 Workforce Learning Report, which found that 94% of employees would stay at a company longer if they felt that the company invested in helping them learn. Employees want to learn, and leadership training amplifies their industry skills and helps them see a clearer career path.

The True Cost

Executives worried about the cost of leadership development should remember the greater cost of losing valuable employees, alongside the added costs of hiring and training new people. Turnover can destroy any organization’s budget, and leadership development is not only a clear indicator that an employer is investing in their top talent but that the company has a plan in place to cultivate employees’ skills. Leadership development answers the simple request that 94% of surveyed employees ask of their employers: Will you teach us? This strategy improves retention rates and accelerates what employees can do for the business.

With far fewer people in physical offices, office culture is changing. That doesn’t mean a stable and supportive work environment isn’t still a top priority for employees. On the contrary, people want tangible proof that their company supports them now more than ever. A ping pong table in the break room doesn’t cut it. With opportunities available for top talent everywhere you look, institutions need to work harder to prove they can offer a nurturing work environment, remote or otherwise, that focuses on the development of their people as a key differentiator.

Organizations cannot out-perform the effectiveness of the leaders within them. As leaders develop and become more effective, the organization creates better results. Strong leadership creates better results. Investing in leadership development prepares an institution’s entire team to weather the next storm, from fortifying executive strategies to fostering skill development.

Hired managers and other team members see leadership development as an investment in their personal goals and, more often than not, those career objectives align with the organization’s own goals. Top employees know they have a lot to offer. It’s time for top companies to prove they do, too.