$7 for $1: A Breakthrough in Corporate Leadership ROI – 2023 Research

Published on
September 21, 2023
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In an ever-evolving corporate landscape, the role of leadership development has grown exponentially. BetterManager’s new in-depth 2023 study has allowed us to deeply explore the realm of corporate leadership development. Through our research, we have revealed intriguing industry-specific insights, providing valuable insights into how various sectors are shaping their strategies for leadership development. This comprehensive study collected responses from over 750 corporate leadership development managers. It not only underscores the value of these programs but also offers a revealing look at the diverse approaches adopted by different industries when it comes to shaping their leadership development initiatives.

Furthermore, in a pioneering move that directly benefits People Leaders, BetterManager has successfully quantified the impact of leadership development on revenue, providing a tangible ROI in dollars and cents.

In a world where data-driven decision-making is crucial, this study serves as the concrete ROI evidence that business leaders are seeking. As organizations increasingly rely on data to drive their decisions, this research equips People Leaders with the evidence they need to make a compelling business case for the programs they implement.

Here are the key takeaways from The 2023 ROI of Leadership Development Study:

A Remarkable ROI of $7 for Every $1 Spent

One of the standout findings from this study is the remarkable return on investment (ROI) that accompanies corporate leadership development programs. On average, every dollar invested in these programs yields an impressive return of seven dollars. This substantial ROI highlights leadership development as a strategic investment with the potential to significantly impact a company's bottom line.

BetterManager joined forces with The Fossicker Group, to conduct this comprehensive study. It encompassed a broad spectrum of companies in the United States, Canada, and the United Kingdom. The tangible ROI was largely attributed to increased revenue and sales directly linked to leadership development initiatives. Additionally, the study revealed that companies benefit financially from improved employee retention rates and reduced recruitment costs.

John Topping, President, and COO of BetterManager, emphasized the significance of this data, stating, "People leaders are increasingly being asked to make the business case for programs they implement. This type of tangible return speaks in real dollars and cents and shows that leadership development is a profit multiplier."

Commitment to Leadership Development in Challenging Times

Despite economic uncertainties and cost-cutting measures in the corporate landscape, the study highlighted an unwavering commitment to leadership development among businesses. A significant 84% of respondents affirmed that their companies continued to prioritize investments in leadership development, even during market downturns. Moreover, an overwhelming 99% of those surveyed expressed their intention to either maintain or increase their spending on leadership development over the next 12 months.

Industry-Specific Investment: Tailoring Strategies

One of the most intriguing aspects of the BetterManager study is the distinct variations in leadership development investments observed across different industries, shedding light on how each sector tailors its approach to cultivating leadership talent.

Investment Per Person

The study unearthed a wide range in the amount of money allocated per person for leadership development. Notably, government agencies invested the least, with a modest $25 per person, while law firms and legal services were at the other end of the spectrum, allocating a substantial $2,667 per person. Holding companies ($1,667) and manufacturing firms ($1,000) also demonstrated a high level of expenditure per person.

Across Industries: A Consistent Emphasis on Nurturing Emerging Managers

Moreover, the study delved into the allocation of resources for leadership development across various levels of management. Here's a closer look at how different industries are shaping their strategies:

Business Services: Business services companies allocated 32% of their leadership development budgets to new and mid-level managers.

Government Agencies: In contrast, government agencies dedicated a significant 48% of their budgets to lower-level managers.

Healthcare and Insurance: Healthcare and insurance companies stood out by investing 41% of their resources in lower-level managers.

John Topping, President, and COO of BetterManager, emphasized the importance of extending leadership development support across all levels of management, stating, "It's important for managers at all levels to receive the support and expertise that leadership development provides. This shouldn't just be for the people with the corner office. As today's report proves, it's a worthwhile investment."

The Business Impact of Leadership Development

In summary, the BetterManager study highlights the valuable returns and ongoing dedication to corporate leadership development programs. These programs not only improve leadership abilities but also bring significant financial gains, establishing them as a crucial factor for success in diverse industries. As businesses face the challenges of today's corporate world, these industry-specific insights offer valuable guidance for customizing leadership development strategies to unlock hidden potential and promote long-lasting growth. Regardless of your industry, the key message remains crystal clear: investing in leadership development can transform your organization and boost its performance significantly. You can check out the full 23-page study here.

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