ATD Blog

UNC White Paper Examines ROI of Leadership Programs

Wed Jul 16 2014

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Talent development budgets took big hits during the recession, but there seems to be light at the end of the tunnel. According to figures released by Bersin by Deloitte in its 2014 Corporate Learning Factbook, spending on corporate training by U.S. employers increased by 15 percent in 2013.

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Now that budgets are on the rise, learning leaders need to prove a return on their investment. A new UNC Executive Development white paper, The ROI of Talent Development, focuses on helping HR and talent management professionals demonstrate the ROI of their talent development efforts.

Now that budgets are on the rise, learning leaders need to prove a return on their investment. A new UNC Executive Development white paper, The ROI of Talent Development, focuses on helping HR and talent management professionals demonstrate the ROI of their talent development efforts.

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According to author Sarah Perez, executive director of Executive MBA Programs at UNC Kenan-Flagler Business School, talent development efforts can be split into two broad categories:

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product, sales, and technical training
product, sales, and technical training
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“intangible” development focused on developing attributes like leadership skills and abilities, team effectiveness, and diversity.
“intangible” development focused on developing attributes like leadership skills and abilities, team effectiveness, and diversity.

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Perez explains that the first category is “more training-centric, and the business case to invest in it and the ROI can be more readily calculated.” Meanwhile, the “intangible” efforts, like leadership development, can be more challenging to assess and calculate ROI because these programs are intended to be long-term investments.

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It is possible to gauge the effectiveness of these programs in both the near and long term. The ROI of Talent Development proposes HR and talent management professionals use the following approach when developing and measuring the ROI of such programs.

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Take a partnership approach. High-potential employees should understand that they have been selected for leadership development. In addition, the employee and his sponsor should understand that it is an investment that will ultimately benefit all parties in the long term.

Take a partnership approach. High-potential employees should understand that they have been selected for leadership development. In addition, the employee and his sponsor should understand that it is an investment that will ultimately benefit all parties in the long term.

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Communicate early and often. Successful partnerships require open dialogue between the employee and the development sponsor. Ensure open communication of expectations, commitment, career paths, and timeframes.

Communicate early and often. Successful partnerships require open dialogue between the employee and the development sponsor. Ensure open communication of expectations, commitment, career paths, and timeframes.

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Develop the game plan together and personalize it for each participant. High-potential employees do not come in a “one-size-fits-all” package. A personalized game plan should include an overarching goal and smaller goals that will demonstrate how the participant has acquired the necessary knowledge, skills, and abilities during the leadership development program.

Develop the game plan together and personalize it for each participant. High-potential employees do not come in a “one-size-fits-all” package. A personalized game plan should include an overarching goal and smaller goals that will demonstrate how the participant has acquired the necessary knowledge, skills, and abilities during the leadership development program.

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Manage the process. Talent management professionals should check in along the way to see if short-term goals are being met and to ensure that participants and their sponsors are keeping up with the plan. It is important to gauge success and make adjustments as new skills and knowledge are acquired.

Manage the process. Talent management professionals should check in along the way to see if short-term goals are being met and to ensure that participants and their sponsors are keeping up with the plan. It is important to gauge success and make adjustments as new skills and knowledge are acquired.

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Stay with it until the end. HR and talent management professionals can measure the ROI of leadership development by answering specific questions:

Stay with it until the end. HR and talent management professionals can measure the ROI of leadership development by answering specific questions:

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Were the long-term goals met?
Were the long-term goals met?
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Were the established timelines met?
Were the established timelines met?
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Have high potentials who participated in the leadership development programs been promoted as a result of the leadership development? If not, why?
Have high potentials who participated in the leadership development programs been promoted as a result of the leadership development? If not, why?
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What are their retention rates versus employees who did not participate?
What are their retention rates versus employees who did not participate?
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What are their promotion rates versus employees who were not in the program?
What are their promotion rates versus employees who were not in the program?
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Was the program successful in building the bench strength needed for the organization’s future?
Was the program successful in building the bench strength needed for the organization’s future?