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Bersin by Deloitte Research Shows US Leadership Development Spending Up Again 14 Percent to More Than $15 Billion in 2013

New Bersin by Deloitte Research finds the biggest investment boost came from small businesses, which on average spent 23 percent more on leadership development initiatives  

OAKLAND, Calif., May 14, 2014 - Bersin by Deloitte, a leading research and advisory firm empowering Human Resource (HR) organizations to drive bottom-line impact, today announced new research that shows U.S. organizations boosted leadership development spending 14 percent on average for the second consecutive year to an estimated $15.5 billion in 2013. The findings appear in Bersin by Deloitte’s new Leadership Development Factbook 2014: Benchmarks and Trends in U.S. Leadership Development, available to WhatWorks® members and for sale to non-members. 

Summarized in a complimentary WhatWorks market brief, the research provides key benchmarks and guidance to help leadership development teams make valuable investment decisions. The new research shows that the biggest increase in investment came from small businesses, which on average spent 23 percent more on leadership development initiatives in 2013. Large and midsize organizations reported more modest gains during the year, at four percent and five percent respectively.  

“During times of growth, organizations should focus on building their leadership pipelines and they have,” said Karen O’Leonard, vice president, Benchmarking & Analytics Research, Bersin by Deloitte, Deloitte Consulting LLP. “The increased investment across all organization sizes indicates a commitment to improving leadership capabilities. Organizations realize twenty-first century leadership is different, and they are investing in development opportunities to build the capabilities needed for today and tomorrow.”

Bersin by Deloitte research shows that organizations with mature leadership development practices continuously invest in building a pipeline for the future.

“Organizations with mature leadership development practices often outperform their peers because they have deeper skills, a stronger learning culture and a deep investment in leadership,” said Kim Lamoureux, vice president, Leadership & Succession Research, Bersin by Deloitte, Deloitte Consulting LLP. “Such organizations typically spend three times more on emerging leaders than the least mature groups, two times more on executives, 60 percent more on first-level leaders, 36 percent more on mid-level leaders and 32 percent more on senior-level leaders.”

The new research also found:

  • Leadership development staffing has increased. The research reports a 12 percent overall increase in U.S. organizations to 3.4 leadership development staff per 100 leaders participating. Small organizations with less than 1000 employees reported the biggest gain – 18 percent to 3.6 leadership development staff per 100 leaders participating. Large organizations with 10,000 or more employees reported the second highest gain (10 percent gain to 2.6 leadership development staff per 100 leader) followed by midsized organizations (4 percent increase to 3.6 development staff per 100 leader).
  • Emerging leaders get a healthy dose of funding. Seventeen percent of the leadership development budget is going to high-potential professionals who have not yet reached an official managerial role. This is a positive sign, because organizations should invest in their future leaders to build the talent pipeline at every level of leadership. 
  • First-level leaders need more attention. The research shows that first-level managers receive the lowest per-person funding on leadership development. For example, within large organizations, these leaders each receive on average $2,600, or 34 percent less than emerging leaders and half the amount of mid-level leaders. The research also shows that first-level leaders on average manage 9 to 11 direct reports, which is a large team to motivate and develop, and a big change from their roles as individual contributors. 

The new research shows that the overall pipeline for leaders is weak, despite the efforts within many organizations to improve succession planning. Poor succession planning has widespread implications for costs, retention and overall organizational performance.

Large organizations are especially guilty of not “priming the pump,” as the research indicates that successors have been identified for just 10 percent of their first-level leaders and 19 percent of their mid-level leaders. The pipeline at higher levels also looks weak within these organizations, with successors identified for just 24 percent of senior-level positions and 36 percent of executive positions.

For the first time, the findings of this year’s Factbook are published in slide format, so that executives may more easily repurpose the charts and add their own benchmarks. For more details about the slide format, go to www.bersin.com/leadership-development-factbook-ppt.

Register to join Karen O’Leonard for a webinar, Benchmarking Your Leadership and Succession Initiatives, 2:00 p.m. ET/19:00 BST on June 10, 2014. O’Leonard,  will be joined by guests Kim Lamoureux and Jennifer Krider, research analyst, Benchmarking & Analytics Research, Bersin by Deloitte, Deloitte Consulting LLP, to discuss current resource investments in leadership development initiatives and the health of succession pipelines. 

Those interested in learning more about Bersin by Deloitte or its WhatWorks® membership may email info@bersin.com or call 510-251-4400.     

About Bersin by Deloitte

Bersin by Deloitte delivers research-based people strategies designed to help leaders and their organizations in their efforts to deliver exceptional business performance. Our WhatWorks® membership gives Fortune 1000 and Global 2000 HR professionals the information and tools they need to design and implement leading practice solutions, benchmark against others, develop their staff, and select and implement systems. A piece of Bersin by Deloitte research is downloaded on average approximately every minute during the business day. More than 5,000 organizations worldwide use our research and consulting to guide their HR, talent and learning strategies. For more information, please visit http://www.deloitte.com/bersin or http://www.bersin.com.  

As used in this document, "Deloitte" means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.  

 

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Laura Evenson

Communications

Bersin by Deloitte

Deloitte Consulting LLP

+1 415-465-2711

levenson@deloitte.com