Is Leadership Development Training Worth the Investment?
What is the ROI of Leadership Development?
Times are challenging for UK businesses right now and budgets are tight. Leadership and management training may seem like a luxury your business can ill afford right now, but arguably it’s more vital than ever. Senior leaders and first-time managers are under more pressure and are more overwhelmed and unprepared for the challenges of their roles. Investing in their development is essential to unlocking the full potential of teams, increasing productivity, boosting retention, and building a successful business. The ability to inspire, guide, and adapt is what sets thriving businesses apart from the competition. Yet, investing time and money in leadership training often raises the question: Is it worth it?
Leadership Expectations Have Changed
Over the past 20 years, our exceptions of leaders have evolved. Leadership has shifted from a traditional command and control model to one that focuses on emotional intelligence, collaboration and adaptability. Today's Leaders are expected to drive innovation, growth and profitability and to place people at the heart of their leadership approach - fostering trust, building strong relationships and creating environments where individuals and teams thrive.
Leadership styles and strategies have also had to adapt to rapid technological advancements, changing workforce demographics, and the rise of remote and hybrid working. The digital workplace demands leaders who can manage virtual teams effectively and leverage digital tools to enhance communication and collaboration.
Why now is the time to Invest in Leadership Development
Balancing business objectives and hard KPIs with the human side of leadership is tough, and research highlights a critical gap in leadership skills. Ineffective management costs UK businesses billions in lost working hours and disengaged employees.
82% of managers take on their roles without formal training (Chartered Management Institute Accidental Managers, 2023).
Only 40% of leaders rate their company’s leadership as high-quality (leadership consulting firm DDI 2023)
75% of workers waste up to two hours out of their working week due to inefficient managers. Management practices leading to time lost include unclear communication (33%); lack of support (33%); micro-management (26%); and lack of direction (25%) (Department for Business & Trade).
41% of employees report experiencing “a lot of stress” at work and those who work in companies with bad management practices are nearly 60% more likely to be stressed than those working in environments with good management practice. (Gallup’s State of the Global Workplace)
The Return on Investment in Leadership Training
Whether you’re exploring leadership development for senior leaders or management training for new managers, the evidence shows that the Return on Investment is substantial. It’s not only the participants who’ll benefit - the results will ripple through the whole organisation driving productivity, retention and trust
Leadership training offers a median ROI of 700%, with some organisations reporting returns of up to 5000% (Global Coaching Client Study by the International Coaching Federation (ICF).
Businesses with formal leadership training see 218% higher income per employee than those without it (ATD Research)
The Chartered Management Institute (CMI) reports that every £1 spent on management and leadership development can yield £6 in ROI through increased productivity, innovation, and efficiency.
Why Investing in Training will Produce Tangible Benefits.
1. Better Decision-Making Leads to Higher Productivity
Leadership training equips executives with the tools to step back from day-to-day operations and align decisions with long-term goals. Confident leaders make clear, bold decisions, driving teams toward meaningful results. For businesses navigating economic uncertainty, this clarity can lead to increased productivity and streamlined operations.
For instance, leaders trained in coaching techniques can identify bottlenecks in team performance and guide their teams to work more efficiently. Research shows:
37% increase in productivity from leadership training (IBM The Value of Training)
For every £1 spent on management and leadership development in the UK, businesses see an average return of £6 in increased productivity, innovation and (CMI)
23% improvement in organisational performance (CMI 2023)
2. Increased Employee Retention and Reduced Turnover
Staff turnover can be costly, both in terms of finances and team morale. According to a study by Oxford Economics, replacing an employee in the UK costs businesses an average of £30,614 due to recruitment, onboarding, and lost productivity.
Investing in leadership training empowers managers to create supportive environments where employees feel valued and motivated. Great leaders inspire loyalty, growth opportunities and open communication—essential elements of employee satisfaction. Happy employees are more likely to stick around, reducing recruitment costs and keeping expertise within your organisation.
94% of employees would stay longer at a company that invests in their learning and development (LinkedIn Workplace Learning Report)
72% reduction in turnover reported by businesses that prioritise leadership development (Confederation of British Industry CBI)
32% boost in employee engagement and productivity (CMI, 2023).
3. Improved Team Performance and Collaboration
Leaders are the torchbearers of the company’s culture, values and behaviours. Leadership development programmes help leaders foster a culture that matches the company’s mission and vision and promote values like collaboration, innovation, accountability, and respect in their teams. This positive influence spreads to all levels of the organization, creating a work environment that motivates employees and encourages them to give their best.
Leadership Training helps managers develop key skills like emotional intelligence, conflict resolution, and giving and receiving feedback. These skills break down silos and cultivate a culture of collaboration, which is critical for innovation and efficiency.
Effective leaders also create a culture of accountability and performance. They set clear expectations, provide feedback, and recognize and reward performance that supports strategy execution. This ensures everyone is working towards the same goals and motivates employees to perform at their best.
4. Adaptability and Innovation
Leadership training can help senior managers improve their ability to manage change. In today’s business world, change is constant, and companies must be able to adapt quickly to stay ahead of the competition. By learning how to manage change effectively, senior managers can help their teams navigate through difficult times and emerge stronger on the other side. A course on change management or strategic thinking, for example, gives leaders strategies and learn different models and strategies for change, and how to address human aspects of change, such as resistance, fear, and uncertainty. This adaptability ensures your business can stay competitive and resilient.
5. A Culture of Continuous Improvement
Leadership training doesn’t just benefit the individuals who attend the courses; it creates a ripple effect across the entire organisation. When leaders model effective behaviours like open communication, accountability, and innovation, these values permeate the company culture. Over time, this builds a self-sustaining environment of continuous improvement.
How to Measure the ROI of Leadership Training
So how do you quantify the return on investment (ROI) of leadership training? Here are a few metrics to track:
Employee Retention: Measure reductions in turnover rates post-training to assess improved retention.
Productivity Gains: Track improvements in project completion times, efficiency, or sales figures to demonstrate impact.
Engagement Scores: Use employee surveys to gauge increases in morale, satisfaction, and commitment levels.
Cost Savings: Calculate reductions in recruitment, onboarding, and absenteeism expenses.
Leadership Confidence: Evaluate pre- and post-program self-assessments or peer reviews to measure individual growth.
Aligning these metrics with organisational goals will provide a comprehensive view of the programme’s effectiveness and help justify continued investment.
How to Ensure the Success of Leadership Training
To maximise the impact of your leadership programme, consider these best practices:
Tailor the Programme: Align training content with your organisation’s unique goals, culture, and challenges.
Engage Stakeholders: Secure buy-in from senior leaders to foster a culture of commitment and set an example.
Create a Learning Culture: Encourage participants to apply what they’ve learned and share insights with their teams.
Follow-Up Support: Provide coaching, mentoring, or action learning sets post-training to reinforce new skills and sustain behavioural change.
Track Progress: Use data and feedback to evaluate programme effectiveness and identify areas for continuous improvement.
Celebrate Wins: Highlight successes and progress to maintain enthusiasm and support for ongoing development initiatives.
Why Choose Growth Space for Your Leadership Training?
At Growth Space, we specialise in creating impactful Leadership Development Programmes tailored to your organisation’s unique challenges and goals. We are experts in leadership training, people development, Coaching and Facilitation to help businesses unlock their full potential.
With a proven track record of delivering measurable results—including improved retention, productivity, and engagement - we can help you to develop confident, resilient and high-performing leaders.
Ready to Invest in Your Leaders?
Contact Polly to discuss how our bespoke leadership training solutions can support your leaders.
