In this article, we’ll take a closer look at the costs associated with putting together and implementing a robust leadership training program. We’ll look at the challenges organizations face as they work to develop a pipeline of future leaders who will ensure the company’s success and longevity.
Costs
According to a recent survey, 55% of CEOs believe that developing the next wave of business leaders is their number one challenge. That said, leadership training must be a top priority, and companies need to understand the investment needed to make this happen.
The investment will look different depending on company size, industry, trainee numbers, and training methods. HR consultants Projections Inc. conducted a study that broke down the costs associated with leadership development:
- Developing Content – Costs vary according to the amount of printed, digital, and other materials, whether you deliver that content digitally or in person, and how often you plan to conduct sessions. However, on average you can expect to spend about $250 a month to outsource content development.
- Virtual Training Solutions – Using virtual training instead of in-person is significantly more cost effective and brings a larger value to the company. The individuals going through training are not losing valuable time on the job because they are traveling or at a hotel. They are in their office before and after training. The cost of travel, other travel-related expenses and conference/training space costs are eliminated, which saves thousands of dollars. Based on the company size, using a virtual solution for the year will cost a fraction of one in-person training program.
It’s important to note that meeting software is not a training solution. To get value out of virtual training, companies need to utilize technology that was developed specifically for training and learning.
- Videos – Professional training videos will cost between $500 and $1,000 per finished minute.
- Infographics – Professional graphic designers usually charge between $75 and $100 per hour for infographics.
- Server space – You’ll want a good cloud server to host and archive your materials, which can cost up to $300 per month.
- Hiring leadership experts – Whether you are delivering training virtually or in person, hiring leadership experts as keynote speakers or trainers will increase engagement and retention. Real experts will charge between $2,000 and $10,000, depending on their credentials and prominence in the field.
Challenges
Leadership development costs are a challenge that larger, more established companies may not struggle with as much as small businesses. However, other challenges come with the territory for companies of any size:
Moving Fast Enough
10,000 Baby Boomers retire every day, vacating thousands of leadership positions. Millennials are currently projected to grow from 35% of the workforce to 75% (TeamStage), and they’re notorious for job-hopping. The dynamic between the two generations makes the problem of leadership training twofold: 1) How do you replace the retiring Baby Boomers at the same rate at which they’re leaving? 2) How do you get Millennials into leadership roles quickly enough to keep them from leaving for the next opportunity?
Digital Disruption
Technology is outpacing us, which makes it difficult for companies to keep their leaders trained at a rate that keeps up with the changes (CCL.org). The situation is a classic case of, “No sooner do you learn answers than the questions change.”
Diversity, Equity, and Inclusion (DEI)
Currently, women’s representation in senior management is 28% and in C-suite positions it’s 21% (Apollo Technical). People of color’s representation in the C-suite stands at 11% (Investopedia). One of the fundamental challenges companies face in developing their future leaders is making sure they find ways to implement and support a strong diversity, equity and inclusion initiative.
While leadership training comes with some costs and challenges, the benefits make it supremely worthwhile.
