We work in an era of unprecedented change. AI is rapidly transforming our digital landscape and hybrid and remote working conversations remain, leading to distributed teams. All while calls to cultivate inclusive workplaces and focus on employee wellbeing are becoming louder...
Effective leadership has never been more crucial.
Leaders wield the most significant influence over employee engagement.
However, with change often comes challenge. And it’s becoming increasingly important to be pointed when planning a successful leadership development strategy. Where should efforts be focused? What does the research say about leadership? What are the stats that pack a good punch? This article combines top leadership development statistics to help HR, L&D, department leaders and CEOs plan their leadership development strategies.
Contents
Leadership Development Context
Let’s begin with a little context. Leaders wield the most significant influence over employee engagement. And, as we’ll see, employee engagement is a factor that directly impacts organisational success.
Yet, many leaders are promoted without adequate training, leaving them ill-equipped to navigate the complexities of leading people and change. This can leave individuals feeling unprepared and overwhelmed in their leadership roles.
And the pressure is on.
70% of L&D professionals and functional leaders say it’s important or very important for leaders to master a wider range of effective leadership behaviours to meet current and future business needs
This sentiment of unpreparedness and demand can lead to decreased confidence and effectiveness in leadership roles. Plus all the knock-on employee and organisational effects this subsequently creates.
According to Harvard Business Review, global organisations spend more than $60m USD on leadership development programmes. While CIPD report that development of senior leadership capability comes 4th in the list of people priorities for L&D professionals. And only 54% of organisations say that leadership development is mandatory.
At Kinkajou, we believe this is a missed opportunity.
Traditional leadership training programmes have historically formed part of leadership development strategies. However, while they do still exist, they often fall short in driving meaningful behavioural change.
75% of leadership development professionals estimate that less than half of what they train gets applied on the job.
Instead, tailored leadership coaching that addresses the unique contexts and challenges of individual leaders has proven to be a powerful catalyst for growth and development.
Research says that;
85% of managers who receive coaching outperform their peers in critical skills such as resilience and agility.
Leadership Demographics
So, to the stars of the show, the people of the moment – leaders. What’s the current state of play in the land of the leader? It probably comes as no surprise that the landscape of leadership is evolving, with diversity becoming increasingly important. However, progress remains slow as we'll see below.
In the United States, according to McKinsey:
Senior managers/directors
61% of Senior managers/directors are men.
46% of Senior managers/directors are white men, 15% are men of colour.
28% of Senior managers/directors are white women, 10% are women of colour.
C-suite leaders
70% of C-suite leaders are men.
56% of C-suite leaders are white men, 14% are men of colour.
22% of C-suite leaders are white women, 7% are women of colour.
While Fortune.com report that only 8 Fortune 500 companies have a black CEO at the helm - apparently a near-record high.
Leadership Perspectives
But what about from leaders' perspectives? What does the landscape currently look like from their vantage point?
Leaders today face unique challenges in managing remote and hybrid workforces.
Microsoft's 2022 Work Trend Index highlights that 43% of leaders report relationship-building as the greatest challenge in hybrid and remote work environments.
This statistic underscores the need for leaders to develop new skills to foster connection and collaboration in distributed teams.
In addition, many leaders are promoted to their positions with limited or no training. This can be both overwhelming and challenging to manage the transition to being the boss.
According to Chartered Management Institute, 82% of managers who entering a management position have not had any formal management or leadership training.
A study by Microsoft revealed that almost three quarters (74%) of managers felt they lacked the necessary influence or resources to support their teams effectively.
Compared to those not in leadership positions, despite being more likely to be engaged and thriving in life generally, leaders are also more likely to be stressed, angry, sad and lonely. According to Gallup, leaders tend to experience higher levels of negative emotions comparatively.
This is also seen in 2023 research by DDI who report that burnout signs among leaders seem to be increasing, with 72% reporting they often feel used up by the end of the day, up from 60% in 2020.
Leadership Impact
The impact of leadership on employee engagement cannot be overstated.
Gallup's research shows that;
70% of team engagement is determined solely by the manager or team leader.
Engaged employees are more productive, innovative, and likely to stay with their organisations.
This makes employee engagement and therefore leadership effectiveness critical factors in organisational success.
In fact, Gallup finds that disengaged employees cost the global economy a staggering $8.9 trillion USD in lost productivity – equal to 9% of global GDP.
Leadership Wellbeing
Leader burnout is a growing concern, with many executives reporting high levels of stress and exhaustion, as we shared above. The pressure to navigate uncertain times while maintaining team morale and productivity has taken its toll.
According to a Deloitte study, at least 4 in 10 workers, managers and executives say they “always” or “often” feel exhausted or stressed.
So much so that 66% of managers and 71% of the C-suite say that they’d seriously consider moving to another organisation that would support their wellbeing.
Addressing leadership wellbeing is crucial not only for the leaders themselves but also for the overall health of the organisation.
Women in Leadership Statistics
Although diversity and inclusive leadership is becoming increasingly important, progress remains slow. Women, for instance, continue to be underrepresented in leadership positions.
32% women are in senior leadership positions worldwide, WEF.
According to McKinsey's Women in the Workplace United States report, just over 1 in 4 (29%) C-suite leaders is a woman.
And the representation is even lower for women of colour – falling to just 7%. This is just a 4%pt increase since 2017.
Despite (slow) progress, women continue to face barriers in leadership roles.
McKinsey's report also reveals that for every 100 men promoted to manager, only 81 women achieve the same. And for 2024, there’s actually been a back step in women’s progress up the ladder - this was 87 in 2023.
This disparity widens at higher levels of leadership, highlighting the need for targeted initiatives to support women's career advancement.
Similar data is seen from another Global data source - LinkedIn - which indicates that despite 41.9% of 2023’s workforce being women, the proportion of women in leadership roles (director, VP or C-suite) was considerably lower at just 32.2%.
Again, they’ve seen slow progress of 1% increases globally per year for the last eight years. And a reversing trend in 2023, which regressed to 2021 levels.
And it seems that company culture may be preventing women from progressing in their careers. A Deloitte survey found that:
25% of women surveyed don't want to progress into a senior leadership position in their organisation - the top reason being because they're put off by the company culture.
However, 92% of women do want to progress to a senior leadership position at organisations considered "Gender Equality Leaders". These organisations build inclusive culture, where there is respect for work/life balance and career progression support for women.
Employee Engagement Impact
Engaged employees are the lifeblood of successful organisations. And, as we shared above, Gallup's State of the Global Workplace report indicates that managers account for 70% of team engagement.
The role of leaders in employee engagement is huge.
Gallup also finds that when leaders are engaged, employees are more likely to be engaged
And, in what they consider to be best-practice organisations, 3 in 4 managers are engaged.
Focusing on fostering engagement is key.
Gallup also sees that organisations with highly engaged workforces are:
23% more profitable than those with low engagement levels
18% more productive in sales.
and have:
70% higher levels of wellbeing (thriving employees)
78% less absenteeism.
This emphasises the direct link between leadership effectiveness, employee engagement, and business outcomes.
According to Forbes, a sense of genuine care from leaders is the biggest driver of engagement. And there seems to be a lot of work to do in this area.
Only 28% strongly agree that leadership genuinely cares about their health and wellbeing.
➡️ Employee engagement is a hot topic - interested to learn more? We share the top 10 employee engagement statistics.
Employee Perception of Leaders
Much of this comes down to perception. How employees perceive their leaders significantly influences their engagement, wellbeing and performance.
Gallup finds that employees who report they "strongly agree" they trust the leadership of their organisation are 4x as likely to be engaged.
They are also 58% less likely to be on the lookout for a new job.
Yet, according to Gallup;
Fewer than 1 in 4 strongly agree that they trust the leadership in their organisation.
On top of this;
The Chartered Management Institute found that only 27% of employees believe their managers are highly effective.
This perception gap highlights the need for leadership development to focus on efficacy and building trust within organisations.
Leadership Development Business Impact
Effective leadership impacts the organisation directly and translates to business success.
DDI's research suggests that;
organisations not offering effective leadership development programmes at any level are linked to the poorest financial performance.
more than half (54%) of those offering leadership development programmes at all levels of leaders report being in the top 10% of their industry's financial performance.
This drops to 40% when effective programmes are offered for just two levels of leaders.
And to 31% of organisations with effective development programmes for only one leader level.
Also according to DDI;
High-potential leaders are 2.4 times more likely to report intentions to stay at their organisations if they have career goals and development plans to help them achieve those goals.
These statistics underscore the importance of investing in leadership development as a strategic business initiative.
Inclusive Workplace Impact
Inclusive leadership can drive both the bottom line and social and environmental metrics. According to McKinsey's research, gender and ethnic diversity in executive teams increases the likelihood of above-average profitability;
Organisations in the top quartile are, on average, 9% more likely to outperform their peers.
While those in the bottom quartile are 66% less likely to outperform financially on average.
This has increased from 27% in 2020, which they say suggests a lack of diversity may be getting more expensive.
Also according to McKinsey, organisations with:
diverse leadership teams are 39% more likely to have higher financial returns.
leadership teams with >30% of women representation are significantly more likely to financially outperform than those with <30%.
leadership teams with >30% ethnic diversity have a 27% average financial advantage over those with <30%.
"Both forms of diversity in executive teams appear to show an increased likelihood of above-average profitability"
McKinsey, 2023
Diverse leadership teams may also help to;
"bolster community involvement, positively impacting ethical disposition, community orientation, and the general image of a company"
Diverse leadership is also correlated with higher social and environmental impact scores.
Summing up
In conclusion, the statistics paint a clear picture: effective leadership is paramount in today's rapidly changing business landscape. From driving employee engagement to fostering inclusive workplaces, leaders play a pivotal role in organisational success. However, the data also reveals significant gaps in leadership preparedness and development.
To address these challenges, organisations must prioritise leadership development strategies that go beyond traditional training methods. Tailored coaching programmes, focused on building resilience, agility, and inclusive leadership skills, have shown promising results. By investing in comprehensive leadership development initiatives, organisations can equip their leaders with the tools and skills necessary to navigate the complexities of the modern workplace, drive employee engagement, and ultimately, achieve business success.
As we move forward in an AI-driven world, the human elements of leadership – empathy, emotional intelligence, and the ability to inspire and motivate – become even more critical. By combining these essential human skills with the analytical power of AI, leaders can create a powerful synergy that drives innovation, engagement, and growth in their organisations.
➡️ Want a head start?
Check out our 1:1 leadership coaching, group leadership coaching services and diversity, equity and inclusion consulting programmes to enhance your leadership development programme.