As employers turn their calendars to 2024, many remain fearful of a prolonged recession. And they are adjusting their budgets accordingly, trimming headcount and cutting costs in other ways.
For cost-conscious businesses, leadership development is often the first budgetary item to go. During turbulent times, we often notice that companies are quick to scale back on leadership development programs, focusing on budget items that are “closer to the bottom line.”
But leadership is close to the bottom line. It is a key component of workplace culture, and that is the most fundamental component of hiring, retention and productivity. According to a recent SHRM report, employees who rate their company’s culture as “good” or “excellent” are 790 percent more likely to feel satisfied at work and 83 percent less likely to actively look for a new job. This includes managers, whose skills as leaders need to be cultivated on a regular basis, especially in the face of adverse economic conditions.
The more supported that leaders feel, the more likely they are to stay and succeed, and that brings a trickle-down effect to those they manage. Unsupported managers lead to an unsatisfied workforce writ large, hence why companies like Netflix focus on leadership development in good times and bad.
Amidst the usual agenda-setting in the new year, now is the time to double down on cost-conscious, high-impact ways to support your leaders. One example is teaching leaders to coach.
Young employees are especially in need of coaching at work. More than 80 percent of Gen Zers claim a “workplace mentor is crucial for their career.” And yet, millions of employees can’t find one, navigating an uncertain economic landscape entirely on their own.
One underlying yet often underrated reason for elusive mentorship is a glaring lack of leaders who coach people in the context of everyday work challenges. From strategy to execution and innovation, leader-coaches are too often missing from the modern-day workplace, undermining the workforce.
Fortunately, the concept of “leader-as-coach” is increasingly being codified into definitions of leadership and integrated into leadership development programs. As a result, the prevalence of coaching skills programs for leaders has dramatically expanded over the past five years, and that is worth celebrating. Both data and experience demonstrate that coaching in the workplace can strengthen business-critical capabilities, including but not limited to communication, resilience and developing the strengths of others. This matters because strengths-based organizations see greater productivity and profitability.
According to our research, the bottom-line impact of teaching leaders to coach is immense. Of more than 100 business leaders who engaged in 10 weeks of a coaching skills program, 85 percent reported better technical results and 90 percent noted stronger relationships with staff and key stakeholders. More specifically, 75 percent listened to understand throughout the conversation, almost 70 percent asked questions that made the employee think more deeply, nearly two-thirds prompted the employee to explore new perspectives without problem-solving for them, and 53 percent demonstrated the most difficult coaching skill to master—sharing observations without judgment.
Leaders who act like coaches promote an inclusive form of leadership, where employees come to meetings feeling appreciated and leave feeling satisfied. They open their ears, not just their mouths. They seek and value input. The best leaders don’t just listen halfheartedly; they summarize what they’re hearing, ask probing questions and activate empathy.
When employees feel heard and understood, there is a critical improvement in sentiments of belonging and engagement and, ultimately, results. They feel more included in the workplace, whereas a silenced workforce feels uncomfortable voicing important concerns. Particularly in the “new” hybrid work environment, listening is crucial for leaders in supporting their staff, with employees coming to expect more empathic leadership post-pandemic. Leader-coaches can listen with empathy, helping people better understand the situation they are facing and determine their next steps. Listening, in turn, leads to better questions, and better answers. It yields greater depth of thought, and more creativity as a result.
In this sense, an emphasis on leadership development doesn’t need to equate to a new eight- or nine-figure budget allocation, especially with a recession looming. More often than not, it simply amounts to a shift in mindset, where leaders are trained and re-trained in different ways. Companies can and should embrace coaching within their current financial parameters.
With leaders as coaches, your workplace culture is bound to be healthy. Hiring, retention, and broader job satisfaction are sure to follow. And so is a boost to your bottom line—recession or not.
