HR Execs Share Spending Insights on Where to Invest

Most HR executives agree they need leaders who can think strategically, disrupt old-school business models, and create cultures that embrace change. But how much are they willing to invest? And in what types of training and development?

To find out, we recently conducted 3 research studies to benchmark leadership development spending.

The results are in — we’re sharing them in this benchmarking leadership development spending webinar — and it’s clear from the responses that HR executives believe a strong leadership pipeline is critical to the current and future success of their organization.

Take our poll to see our latest updated results.

Most report making sustained, double-digit increases in their development budgets, year-over-year. What’s more, they’re investing equally across leader levels — from first-level supervisors to senior executives.

We compiled their responses to share the 5 factors HR executives believe are critical to a successful leadership development strategy.

5 Characteristics of a Successful Leadership Development Strategy

1. A blended delivery approach.
It’s time to say goodbye to the one-size-fits-all model. The executives in our study reported that it’s critical to craft blended leadership development strategies that reflect your organization’s individual culture and business needs.

They define “blended” broadly and think about it from 2 perspectives:

  • Organizations are blending face-to-face delivery with virtual leadership development initiatives, giving leaders greater flexibility and choice in how they learn.
  • Formal programs blend with informal, bite-sized alternatives that can make development easier to accommodate and absorb.

The result? Something for everyone. Executives remain equally committed to formal and informal opportunities. Our surveys show companies are using a wide array of online courses, workshops, conferences, webinars, MOOCs, videos, on-demand tools, and online resource libraries.

To help leaders navigate these expanded development choices in a thoughtful and systematic way, organizations are providing guidance on what capabilities will be needed at each point in the typical career continuum.

As one chief talent officer told us, “We let anybody take anything, and we have learning maps. So, if someone wants to become a people manager, then these are the things you should be learning in the next 60 days. Our belief is that if you tell the leader what he or she needs to be successful, then it will be upon them to use resources. It places accountability on the learner.”

2. Broad and sustained support.
Often leadership strategies are announced with great fanfare, but quickly fade away and become the “flavor of the moment.” There is no consistency, no sustained support, and no follow-through from month to month or year to year, which can drain people and send the wrong message. (Read more about how to Ditch Change Fatigue and Embrace Continual Evolution.)

But times are changing. Increasingly, senior leaders see effective leadership as a point of differentiation that helps them bring their corporate strategy to life and positions their organization to weather unpredictable disruptions in the marketplace and the economy.

As a result, HR executives are focused on building top-down, organization-wide support for learning across all levels — making it a part of each leader’s job. And they are starting at the top by engaging senior executives in modeling effective leadership behaviors and in motivating and inspiring leaders to make development a priority.

One company in our survey even engages board members and senior executives as leadership development “instructors,” asking them to share their personal experiences and insights during an annual, face-to-face event.

3. A focus on workplace realities.
The leaders we surveyed say the most effective development initiatives link learning to on-the-job challenges and opportunities. As a result, the best development strategies bring leadership theory to life.

HR execs want to be sure leaders know how their work supports the organization’s overarching success. As a result, learning becomes more relevant, and leaders have a safe way to practice new skills they can bring into the workplace.

Our CCL experts say these types of experiential teaching techniques make learning “stickier” and more likely to produce lasting change. They can shift a leader’s mindset and how they view the world around them — opening them up to new possibilities and to more effective ways of leading. That’s especially true if workplace-linked development is reinforced over time with coaching, mentoring, and networking.

4. Interaction and engagement.
Today’s HR teams are pushing development well beyond static lectures. They are bringing in-person and online learning to life with interactive games, Q&A sessions, videos, and other techniques that keep learners interested and engaged. As a result, important ideas are more likely to break through the information clutter and capture each leader’s attention.

In addition, learning becomes active, not passive. As one senior HR leader told us, “Regardless of whether it’s through a screen or face-to-face, it’s not going to be effective if you can’t stop and ask questions. Interaction is very important.”

5. Use of tools and assessments.
Learning to lead is an intensely personal experience. Our surveys show that HR teams are using tools and assessments to provide a personalized context for each leader’s development journey.

To model this best practice, HR departments identify the leadership skills and competencies their organizations need for current and future success. And they use 360-degree feedback assessment data and other tools to help each leader become more self-aware.

This assessment-based perspective provides an important focal point for development. Leaders have a clear understanding of what their organization needs, how their performance compares to their peers, and which improvements they need to make to support their organization’s success. They then can build a personalized development road map for their own leadership journey.

How Do Your Organization’s Investments Stack Up?

These 5 characteristics of a successful leadership development strategy reflect a small portion of the rich information captured in our new report, Benchmarking the State of Leadership Development.

In addition to sharing trends in leadership development spending, the report also:

  • Explores who typically owns the leadership development budget;
  • Examines how much organizations are spending, based on revenue, workforce size, and leader level;
  • Quantifies how much organizations usually devote to developing their high-potential talent;
  • Compares spending on internally sourced development initiatives versus those that are externally sourced;
  • Tracks adoption rates for digital delivery methods versus face-to-face training;
  • Reviews the most common challenges organizations face with leadership development delivery; and
  • Provides recommendations for HR leaders looking to build a successful leadership development strategy for the future.

For more, download the report, Benchmarking the State of Leadership Development Spending: Today & Tomorrow or watch our Benchmarking the State of Leadership Development webinar.

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