S47E1 - L&D Buy-In for Talent Attraction and Retention, with John Morgan

Happy to be here, John. Thanks for having me. It is a pleasure to be with you.

That's very nice, thank you. Just really briefly, I've been in the human capital industry for my whole career, which is 25 years. I always like to think of myself as a blend: I run a large human capital business, but I'm also a psychologist in training. I have a master's in organizational psychology and also an MBA. I've always been fascinated by human behavior at work, which is really why I do what I do. Happy to be on the show.

Absolutely. At LHH, we do quite a bit of research to guide the work that we do, which falls into three areas: we help our clients recruit talent, develop talent, and transition talent when they exit an organization. This study focuses on the middle pillar, developing talent, how we build leaders and help companies guide leadership development investment. We felt that in the current world, with leadership skills changing amid AI, return-to-work programs, and Gen Z entering the workforce, it was a good time to step back and look at what's working in leadership development. We surveyed about 1,500 C-suite executives responsible for the purse strings of leadership development investment at large companies across the US, UK, Canada, and Australia. A couple of key insights: we saw major challenges with change management and agility, that rose to the top. Also, how L&D programs impact recruitment and retention, geographic differences across markets, and how to build an L&D culture. Those are the areas we probed into.

There were really two major significant differences that jumped out. The first was in North America: in the US and Canada, leadership programs had a big focus on not just leadership but DEI. Almost 100% of leadership development programs had a component strongly focused on DEI. We didn't see as many programs with that focus in non-North American markets. The second was that leadership development programs are really only successful when linked with business objectives. In North America, 80% felt the linkage was clear, their programs were linked to business strategy. Outside North America, less than 50% affirmed that. Those were the two major geographic differences called out statistically in the study.

It wasn't a huge surprise to see the DEI component come up. Companies based in North America are a little bit behind in that area, and the focus on it is encouraging. Despite some recent government rulings that question some of these programs, what we're seeing in the research and anecdotally with our customers is that almost all of our clients are focused on building out this agenda as a component of what effective leadership looks like. That's really nice to see.

Great question. The five challenges that rose to the top were: a lack of interest in the program overall, lack of awareness, perception that resources were not adequate, lack of clarity around connection to the business, and a perceived lack of measurability. What's really great are the solutions we found. On measurability, this has been the holy grail for a long time. We've made tremendous gains because of AI, big data, and digital tools that let us quantify things we couldn't before. Take coaching: it's the single best development tool on the planet, but it's always been hard to quantify. Now every program has a coaching component, and we use digital platforms to measure in realtime what the person is working on and its connection to behavioral competencies and business outcomes. At scale, you get reams of data. The other key challenge is you need real executive sponsorship to create a culture for leadership development. I'm not talking about doing a video saying have at it. I'm talking about the CEO personally talking about how leadership development impacted them, telling their story and being vulnerable. Companies that do this drive a culture of commitment. The research is clear: people want to go to companies where development is a priority. It's the number one reason people join and the number one reason people leave. If you get authentic executive sponsorship, you can build a culture where it's an honor to go to a development program and not a chore.

It goes by not only being a visible advocate continuously, but also the investment talks at the end of the day. Making sure a leadership program isn't just for C-minus one and C-minus two only. If you're really trying to build a leadership development culture, you have to offer real development at every stage. Our best clients segment their employee populations and visibly invest in developing different competencies at different career stages. So from the moment you start, you're clear on what your leadership development path looks like. Career path becoming unclear is another big reason people leave. When development isn't valued, that doesn't keep people even if you throw money at them. Leadership support at the top, money talks. Putting investment into programs at all levels. Coaching is one of the most visible investments you can give to everybody. You democratize something by making it available and encouraging people to use it as a normal part of your cadence. Highlight the people promoted through these programs in your town halls. Make it an honor at all levels, not just the top.

Exactly right. I've seen that a lot as well. We're starting to see it less because there's more of a shift to what we call internal career mobility. There are so many open jobs companies can't fill. It's an interesting labor market: on one hand, large publicized tech downsizings; on the other, three and a half percent unemployment in the US. There are people looking for jobs and jobs looking for people, as I always say. Companies are realizing that saying we don't have anything for you is a really costly problem. It's much cheaper to invest in people, help them grow, and show them their skill adjacencies for new roles we'd rather fill internally. More companies are doing that. There's nothing worse than a career conversation where you say your track here is over. You want people leaving as friends.

The culture of leadership development is a key method to help solve the return-to-work issue in the US, particularly, because it's not much of an issue outside the US. In Continental Europe, everybody's in the office every day. Our research is interesting: people don't like extremes. The mandate to be in the office five days a week, especially in financial services, is not going over well. My prediction: if it continues, there will be retention issues, because the labor market is still strong. On the other hand, working every day virtually and being connected to company culture isn't realistic either. Work happens in between meetings, not in meetings. Coming in just for a team meeting once or twice a month isn't building culture or collaboration. I read about J.M. Smucker's novel concept: a core week model with about 22 weeks in the office, basically every other week except summer, and 80% of people are coming in because they have the flexibility. The research is clear: hybrid is what people want. The challenge is structuring it, and leadership culture is key. The way to get people back is to say, if you want to grow as a leader, you need to build relationships and collaborate, and that has to happen in person at some level. Design programs where at least a component is in person, with technology facilitating the rest. When you're learning as a cohort, spend time together in the office. Leadership development should mirror how work actually happens.

I'll give the final word and then share how to connect. The one thing that rose to the top of the study is this notion of change and agility, and how people need to develop leadership skills to manage it. Over 90% cited agility and responding to organizational shifts as a leadership development challenge. So I encourage all the listeners: if you're building leadership development programs, make sure you're addressing that. You can reach me at [email protected]. Happy to talk with any listeners about leadership development or the work we do at LHH. Our website is lhh.com. Just thrilled, John, that you had me, and I'm happy to come back and talk about our work at LHH in the future. Thanks again.