Leaders are burning out at record rates, creating serious retention problems at senior levels, a new study has revealed.
In fact, burnt out leaders are around four times more likely to leave their positions within the next year, and there are not enough leaders to replace them, according to global leadership consulting firm DDI and HR analyst Josh Bersin. DDI’s Global Leadership Forecast 2021 confirmed that nearly 60% of leaders report they feel used up at the end of the workday, which is a strong indicator of burnout.
The study also revealed that 44% of leaders struggling with burnout expect to change companies to advance, and 26% expect to leave within the next year. This is a huge worry for CEOs as they believe quality leadership is already in short supply, noted the study.
SERIOUS RETENTION ISSUES
“There are clear signs that the pandemic will lead to serious retention issues because leaders who are feeling burnout are nearly four times more likely to leave their positions within the next year,” pointed out Stephanie Neal, director of DDI’s Center for Analytics and Behavioral Research. “This could cause a lasting impact on current and future leaders, since 86% of high-potential employees are also feeling burnout; and they’re twice as likely to leave compared to their peers. There’s reason to be concerned about the future of leadership across the board.”
In short, an unprecedented year of ongoing change and a lack of confidence in current and future leadership could lead to retention problems within the next year. “We’re in an extremely unpredictable economic climate that’s going to require leaders to be able to quickly adapt and embrace change if they hope to survive,” Bersin added. “CHROs are already preparing for continued uncertainty by revamping management training to address current workforce challenges while developing and upskilling employees and exploring flexible work arrangements. They’re also focusing on creating more diverse, equitable workplaces and strengthening leadership benches by exploring employees’ leadership aspirations and potential.”
QUALITY LEADERSHIP IN SHORT SUPPLY
In addition to burnout and retention issues, the study revealed that CEOs are most worried about quality leadership being in short supply. The top problem concerning CEOs is developing the next generation of leaders. This issue just outranks facing the global recession and slowing economic growth, which just narrowly eked out attracting and retaining top talent. CEOs revealed that only 47% of critical roles can be filled by current leaders; and that they don’t have the leaders they need today or in the future.
Additionally, organisations are facing a significant leadership quality gap. Leaders and human resources are divided on the quality of leadership in their organisations. Approximately 48% of leaders rate their leadership quality as high, while only 28% of human resources share the same belief. As current leaders struggle to meet ongoing changes, HR professionals worry that they don’t have the skills to meet future challenges.
Leadership bench strength has also hit an all-time low. In 2020, only 11% of human resources professionals said they have a strong enough bench to fill leadership roles. Rapidly shifting markets and increased pressure to innovate and re-prioritise their needs is the main reason for this lack of faith.
UNPREPARED FOR THE VIRTUAL WORKPLACE
Finally, although the future of work has arrived, executives don’t feel prepared for it, noted the study. The pandemic forced most organisations to quickly pivot to virtual workplaces. But only 20% of surveyed leaders believe they are effective at leading virtually. Furthermore, fewer than 30% of leaders said they received development for leading virtually; and the majority felt unprepared to operate within a highly digital business environment.
“The pandemic has impacted everyone, and a lot of people are struggling since they’re being pulled in so many different directions to take on constantly changing objectives, markets and strategies,” Neal commented. “Organisations have had to make drastic changes in the way they work just to continue to function during the pandemic. Many changes were inevitable, but with no real end in sight, organisations need to make adapting a priority to avoid a potential leadership and retention crisis.”
The study is the largest of its kind and includes data from more than 15,000 leaders and 2,102 HR professionals across more than 24 industries globally. Click here for more information.
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