With frontline leaders being responsible for up to 80% of your workforce and making up 50% of your leadership team it is vital that they are able to perform their roles effectively. When they struggle it has a direct impact on your organisation. If you are having trouble convincing decision makers to spend money on developing your struggling frontline leaders I may have the answer.
The issue of a lack of investment in frontline leadership development was highlighted recently with the release of the first in depth study of Australian leaders in 20 years. The Centre for Workplace Leadership’s Study of Australian Leadership surveyed nearly 8,000 leaders and employees from 2,703 organisations. An alarming finding it quoted was that for every $10 employers in the Asia Pacific region spend on senior leaders, just $1 is spent on frontline leaders.
When you consider the important role that frontline leaders play in the success of any organisation it is clear we have a problem. That’s why I am determined to change that ratio. So if you work in HR, L&D or lead a division of your organisation and need to get the powers that be to approve spending on frontline leadership programs I want to help.
I suggest you make your case by presenting them with a calculation of what those leaders are costing the organisation and compare that to the cost of a development program. There is nothing like talking money to get the attention of people at the top who, after all, usually come from a profession that thinks in terms of facts and numbers (ie accounting, law, sales, tech).
Here is a very simple calculator that can help you prove your point.
Number of frontline leaders 10
x Average salary (no oncosts) $ 50,000
= Cost to the organisation $ 500,000
Savings if they were 10% more productive $ 50,000
Of course if your frontline leaders were more productive this would have a direct impact on the people they lead. Let’s add in what that could mean.
Number of people they lead each 5
x number of teams 10
x Average salary (no oncosts) $ 30,000
= Cost to the organisation $1,500,000
Savings if they were 10% more productive $ 150,000
Potential savings to the organisation $ 200,000
Now if you compare these very conservative numbers to the cost of a development program (say, $4,000 per person) you could be looking at a potential return on investment of 500% over the course of 12 months. If the program generated more than a 10% increase in performance the return would be even greater. That sounds like the kind of investment that would get the attention of most decision makers.
Remember, this formula uses base salary only so the real return is even higher when you take into account on costs.
I encourage you to do the calculation for your organisation or division and work out your potential return on investment. Of course, you need to ensure you choose the right program and have a way of measuring the improved performance it is generating. If you can get those aspects right I suspect you will find that getting budget approval for future development programs will be significantly easier.
Karen Schmidt from Let’s Grow! is the frontline leadership expert.
She helps organisations grow their frontline leaders so they perform better, which improves team productivity, giving senior leaders peace of mind.
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