Cultivating Leaders for Organizational Longevity
By Sheryl Kurtis August 2023
(3-minute read)
In today's fast-paced business world, what's the hidden cost of overlooking your organization's existing talent? The most astute companies recognize the potential in their current leaders. They hire for promise and invest in these professionals through compensation and on-the-job experiences. However, many falter when it comes to the explicit, strategic development of people in their talent pipeline. Without this intentional focus, these valuable succession candidates may leave or seem unready for leadership roles, pushing companies toward costly external hires.
“94% of employees would stay at a company longer if it invested in their career development.” - LinkedIn's 2018 Workforce Learning Report
The Costs of External Hires: Hiring into a leadership role with a $200,000 salary may incur $50,000 in recruitment fees, and it can take months to fill a position. Costs escalate when you factor in onboarding, training, lost customer relationships, and institutional knowledge gaps. Gallup indicates replacing an employee can cost ½ to 2x their annual salary. External hires? They often command even greater pay, on average 18% more.
“You know what you are getting into when you promote internally.”
The Risks of External Talent Acquisition: But it’s not just about finances. Harvard and Wharton studies spotlight risks with external leadership hires: they can underperform and depart prematurely. These insights, although CEO-focused, hint at challenges in externally hiring for other senior roles. The complexities of cultural assimilation, stakeholder rapport, navigating the organization, and syncing with its long-term vision underscore the value of investing in existing talent. When promoting from within, organizations have the advantage of knowing an employee's work style, ethics, and vision. They can engage with their peers and previous managers to gain a comprehensive understanding of the individual's potential and the direction they envision for their career.
The Vast Potential Within. By investing in your high-potential talent, not only do you conserve financial resources, but you also amplify leadership success rates. Nurturing and developing internal leaders is a testament to a company's commitment to its people and long-term growth.
Unlocking Future Leaders Through Coaching. But how can organizations nurture this internal talent? Enter the power of coaching. Coaching is a powerful catalyst for individual growth and serves as a cornerstone in charting an organization's journey to enduring success. Leaders such as Eric Schmidt, former CEO of Google, and Bill Gates have championed the transformative power of coaching while also emphasizing the critical role of intrinsic motivation and enriched learning experiences in their professional journeys. Coaches empower leaders, helping them harness their strengths and navigate their growth areas. This personalized strategy ensures internal candidates are equipped with robust leadership skills, enabling them to adeptly handle both present and future challenges, thereby bolstering the organization's leadership foundation for years to come.
7 X ROI - The return a company can expect from investing in coaching. - ICF Study 2009
Shaping Tomorrow. In an ever-evolving corporate landscape, the key to longevity lies within. Leveraging internal talent isn't just prudent—it's imperative. Coaching stands out as a powerful tool to mold and refine this inherent leadership potential. Why seek solutions externally when the future can be shaped from within?
