Talent troubles are weighing heavily on leaders this year, overshadowing other concerns like economic uncertainties and outperforming competitors, according to the latest Global Leadership Forecast from Development Dimensions International (DDI).
Based on a global survey of HR professionals and leaders across several major industries, DDI’s research has been helping talent acquisition professionals better prepare for the challenges ahead since 1999. But this is the first time in the history of the survey that talent struggles have made up the top three CEO concerns.
For the 2023 forecast, CEOs were most worried about attracting and retaining top talent, with 59% citing this as their top concern. Developing future leaders (50%) and keeping their workforce engaged (45%) were the other two primary worries. These concerns outweighed those relating to digital transformation (40%), a global recession (37%), and competitiveness (34%).
Talent struggles stem from ineffective leaders
More than half (54%) of survey participants said their company’s turnover rate increased over the past year. And interpersonal skills may have a lot to do with it — when their leadership lacked effective interpersonal skills, leaders were 3.5 times more likely to say they wanted to leave their company within the next year.
Companies hoping to hold on to their workforce and have a better chance at attracting top talent may have to take a closer look at their leadership culture and focus on building better relationships with their team.
Tomorrow’s leaders are ready to train today
Only four in 10 leaders said their company currently has high-quality leaders, and, for most companies, the next generation of leaders isn’t looking promising.
Within the past decade, the percentage of HR professionals who say they have a strong bench to fill leadership roles has declined by 33%, with only 12% of companies expressing confidence in their leadership bench this year. But that small percentage is reaping the benefits of investing in the identification and cultivation of future leaders — these companies were 10 times more likely to have highly-rated leaders, 6 times more likely to be able to engage and retain top talent, and 5 times more likely to prevent employee burnout.
So it’s clear that providing employees with a pathway to leadership and the resources to get there not only helps fill future leadership roles, but boosts engagement and reduces turnover.
Flexibility, trust, and purpose keep leaders on board
Beyond growth opportunities, DDI’s forecast uncovered a few other factors that play into leader engagement and retention, including:
- Flexibility: Companies must be aware that a lack of flexible work options could cost them quality leaders. Leaders were 1.3 times more likely to plan their departure within the next year if their company didn’t support flexible work opportunities. This was even higher among leaders under 35, who were 2.2 times more likely to leave because of a lack of flexibility.
- Trust: Only 32% of leaders said they trust their senior leaders. Since those who trust their senior leaders are 3 times more likely to come up with new ideas and solutions, trust has a link to employee engagement. Some of the ways senior leaders can build trust include displaying vulnerability and admitting their failures and mistakes
- Purpose: DDI’s research found that leaders who have a strong sense of purpose in their work were 9 times more likely to feel engaged in their role and 2.4 times more likely to plan to stay at their company at least another year. However, many leaders lack that sense of purpose. More than 60% of C-suite and 55% of senior level leaders found their job meaningful, but only 47% of mid-level and 41% of frontline leaders said the same.
For more insights and strategies to engage and develop leaders, see this year’s full Global Leadership Forecast.