Has employee retention been on your mind lately? If so, you’re not alone. We’re operating in a competitive job market, and employers worldwide are facing a new set of challenges. One solution many are considering is how to create a leadership development program that supports employee engagement and retention in the workplace.
Today’s workers have more optionality when it comes to employment than past generations ever thought possible.
This article explores the impact of this phenomenon on retention, why it matters, and how to create a leadership development program to address it.
Employee Retention is More Important Than Ever
Thanks to remote work, there are more job opportunities for employees than ever before.
Beyond that, professionals care about a workplace that aligns with their values and promotes healthy work-life balance. They want a career they can grow in and find meaning and purpose in each day.
Because of the myriad of options and shifting attitudes, people are looking for more than just a paycheck. And many people are willing to switch jobs and industries until they find something they’re happy with.
HR leaders are feeling the weight of this. In fact, research has shown that retention is now a priority over recruiting—it’s more important now than ever before.
This means leaders and organizations need to put a high priority on retention. There are a few key reasons why:
- Cost savings: Hiring new employees, training them, and getting them up to speed all costs money. Some suggest that the cost to replace employees ranges between $1,500 per hourly worker to the cost of 213% of a C-suite salary. It may be hard to put exact numbers to it, but the simple fact is that it costs more to hire someone new than keep someone in the role.
- Reputation: Low retention and high turnover can cast a brand and business in a negative light. Employees who leave organizations can speak ill of their former employer, whether justified or not, and impact the overall brand image.
- Company culture: High turnover because of poor retention impacts company culture and team morale. It’s hard for remaining colleagues to always be working with new teammates and may cause them to also leave the position.
These are significant reasons why retention needs to be top-of-mind for any employer or HR manager.
And while there are many strategies to address it, we’ll hone in on one key piece: how to build leadership development programs that inspire, engage, and ultimately keep your employees around.
Why Leadership Development Increases Retention
Leadership development is a cornerstone of employee engagement and retention.
Because there’s a deep desire for many employees to learn, grow, and seek advancement opportunities.
In fact, a 2018 LinkedIn study found that 94% of employees would stay at a company longer if it invested in their careers. In 2022, LinkedIn found that upskilling was among the top four priorities when evaluating job opportunities.
There are other reasons leadership development increases retention:
- Internal hiring: 71% of employees believe it’s better to hire from within to scale a business. Internal hires already know the business, making the transition into a new or higher role quicker and frictionless. The same study showed that 56% of employees also believe this practice is better for morale.
- Mentorship: Mentorship, which can be a key part of how to create a leadership development program, has been shown to increase employee engagement by 56%. Another study found that retention rates were much higher for employees who participated in a mentorship program than those who didn’t (72% vs. 49%).
- Engagement: Leadership training for leaders, in particular, is essential to increase employee engagement because 70% of a team’s engagement is influenced by managers.
Leadership development programs have the potential to increase retention through meaningful employee engagement strategies.
6 Steps to Create a Leadership Development Program
1. Assess Your Organization’s Needs
Before you dive into creating a leadership development program, you need to know the purpose and point of doing so.
Start by assessing your organization’s needs by gathering information from team members. You can do this in a few ways, including surveys, interviews, or focus groups. Some questions you might want to ask or evaluate include:
- Do employees know about potential career advancement opportunities and the path to get there?
- What skills are required to advance in this industry?
- How are the communication, organization, or other “soft” skills on this team?
- Are there areas for upskilling? I.e., do employees either need or want to learn a new skill?
2. Determine Leadership Development Program Objectives
Once you understand your organization’s needs, you can create objectives to meet them. It’s important to have clear program objectives for your leadership development program so you know exactly what you’re designing and why.
Some example objectives include:
- Improving communication skills, including active listening and conflict resolution
- Educating employees about possible career paths
- Enhancing decision-making abilities
- Diversifying skills, interests, and knowledge
- Increasing employee engagement
Objectives should be measurable, either quantitatively or qualitatively, so make sure you’re also identifying how you will know if these objectives have been met.
For example, an objective could be something like this: “We will diversify the skillsets on our team as measured by at least two employees successfully completing coursework in X, Y, and Z areas.”
3. Design the Leadership Development Program Structure
There are many different program structures that can work for your team. When considering how to create a leadership development program, you need to select a structure that helps reach your program objectives.
Some common examples include:
- Workshops (online or in-person)
- Mentoring and coaching
- Video tutorials
- Presentations or talks
- Group discussions
How you design the program structure depends on how big your team is, if you’re in the same geographical location, and the type of content you’ll be utilizing.
When determining the program structure, also consider how it’ll be delivered. It might be online, in-person, or a combination of both. If it’s in-person, consider using bookable meeting rooms or event space in a coworking space for optimal collaboration.
4. Identify Key Staff and Leadership Development Program Trainers
Depending on the size of your team, you may want to bring in outside consultants to support you in building a leadership development program. They can act as trainers, teachers, or coaches to the participants by directly distilling key information.
You may also bring key staff on board to help develop the program or act as mentors to participants. Here are a few things to think about when collaborating with other staff on this project:
- Do they have the knowledge, skills, and experience to teach or mentor others?
- Are they well-respected by other staff members?
- Do they have strong public speaking, relationship building, or other skills?
- Is this adding extra work to their plate? Do they have time to participate in this leadership development program?
5. Create Leadership Development Program Materials
Along with the key staff you’ve identified to support how to create a leadership development program, it’s time to develop program materials.
Start by brainstorming and sketching out all of the important information you need to cover. This should be an outline of the entire program.
Then, consider how to create engaging and interactive program materials that meet the program objectives. For example, if your goal is to expose employees to new career paths and opportunities in the company or industry, you may choose to do a panel discussion with industry experts.
Or, if you want to offer upskilling, you may have a course with video tutorials and exercises that teach the skill.
Here are some other ideas for program materials:
- Exercises and projects
- Conversations and discussions
- Video and audio content
6. Implement and Evaluate Your Leadership Development Program
When you’ve completed the program materials, you’re ready to implement the leadership development program with your first cohort.
It’s important to consider how to launch it and garner buy-in from employees. Make sure you’re communicating the opportunity and how participants will be selected. You may offer this to everyone in a specific role, create an open call to anyone interested, or hand-pick participants.
Since it’s your first run at how to create a leadership development program, prioritize feedback and data to help evaluate success and improve things for next time. Here are some options to try:
- Use a questionnaire to collect participant feedback (can be anonymous)
- Hold exit interview-style meetings with participants to discuss what they liked and didn’t
- Collect data about key metrics for online courses, such as participation rates, time spent reviewing materials, etc.
- Check in with participants 3-6 months later to evaluate the effectiveness of the program over time
As you review and evaluate the success of your program, always go back to your objectives. And, when necessary, don’t be afraid to change them over time to meet your business needs and the needs of your team.
Leadership development is an essential way to increase employee engagement and retention. These six steps on how to create a leadership development program can get you started on the right track to building something meaningful and effective.
If you’re looking for a workspace where your employees can grow with your business, book a tour of The Colab Space today.