A recent Forbes article on Building Bench Strength noted an alarming leadership trend: “As a general trend, we’ve seen a continued slippage in leadership bench strength (ready-now leaders who can step in to replace those who retire or move on) – in 2018, only 14% of companies have a strong bench, the lowest number we’ve ever seen.”
What does that mean for your business? In a word: trouble. 10,000 Baby Boomers are retiring every day, and by 2020 (that’s next year, folks), nearly half the workforce will be Millenials. Millennials are the most mobile workforce we’ve ever faced; 91% of them say they plan to stay at their current jobs for less than three years. That means that turnover is only going to become a bigger problem than it already is unless you can do something to entice them to stay longer. Businesses need building bench strength. Even the greatest leader will retire at some point. The larger the company, the more building bench strength is important. But even for smaller, privately held companies, investing in bench strength is critical.
What can you do to improve Leadership in your Organization by Building Bench Strength?
First, let’s explore what building bench strength is. Not to be too obvious about it, but if you have ten people in key leadership positions, you’ll want to have at least ten others being groomed to eventually replace them. But it’s not that simple. Turnover happens, even in the most engaged workplaces. And since only about 30% of companies have engaged or highly engaged employees, it’s safe to assume that if you have ten people in key leadership positions, you probably want to have at least thirty people being groomed. That’s the obvious piece.
Less obvious is the long game. What are you doing to develop employees into leaders earlier in their careers? Why would you want to bother doing that so far in advance? There are a number of reasons, which I’ll share here.
- Employees that receive development training tend to be much more engaged. Higher engagement leads to lower turnover. This is not only good for morale, but for the bottom line. It’s expensive to have a high turnover, and that expense goes beyond the hard costs of recruitment, salaries, and benefits.
- Employees who begin to develop leadership skills early tend to be more productive. They naturally want to give back to the company that gives it to them. That, and if they practice what they’re learning, they become better at managing themselves, which makes them more productive, better team players, and easier for their leaders to manage.
- You don’t have to manage people to be a leader. People who are trained to develop leadership skills tend to be more proactive than those who don’t. They become better at critical thinking and problem solving, which makes them more valuable as individual contributors. How would your company benefit from having a workforce of strong contributors?
- Millennials. By next year, nearly half of the workforce will be Millenials. One of the key drivers for this demographic is meaning-making. They crave significance. They need to know that the work they’re doing matters, and not just for the bottom line. When you invest in their personal development, the likelihood of them staying with your company for more than three years increases significantly.
- Who will lead your organization into the future? Newsflash: it’s not the front line of leaders being developed. They’ll lead for 10-20 years at most. Then what? They’re not equipped to lead the future of business. It’s changing too rapidly, in ways most of them don’t understand. Companies that are thriving 20 years from now will be those that have invested in leadership development at all levels of business. Only about 5% of organizations do that now. Do you want to be one of them?