Employers are investing more in leadership development, spending 14 percent more than they did in 2011.
That brings the total to an estimated $13.6 billion in 2012, according to new recent research by Bersin & Associates, a membership-based human resources research and advisory services firm.
Additionally, the research reveals a transition in spending further down the leadership chain as employers are focusing on developing all levels of leaders, particularly high-potential talent, to remain competitive. Among the respondents that excel at leadership development, they spend an average of up to 60 percent more per participant, resulting in 20 times greater employee retention.
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"With the economy improving and corporate restructuring behind them, most large organizations have set their sights on global expansion, highlighting the need for new leadership skills in global acumen, agility and innovative thinking," says Josh Bersin, CEO and president of Bersin & Associates. "Of the $13.6 billion we estimate U.S. companies will spend on leadership development this year, we see those funds invested in developing a new breed of leaders, creating more comprehensive solutions, hiring additional leadership development staff, and acquiring tools for identifying and developing future talent in-house rather than relying on the external job market to solve their talent challenges. Our WhatWorks research helps members benchmark their programs, budgets and staffing levels to drive informed investment decisions that accelerate business results."
Companies boasting the highest level of sophistication regarding strategic leadership development initiatives spend an average of 30 percent to 40 percent more per participant than the least mature companies, and organizations that have implemented high-impact leadership development programs are seven times more effective at providing improved business and talent results than those with less sophisticated leadership development functions.
While companies have typically invested heavily in senior leaders, they now only consume 22 percent of leadership development programs, which is lower from previous years. Executives are increasingly understand the importance high-potential leaders are for corporate competitiveness and are now spending approximately $7,100 per high-potential leader on development initiatives.
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