The Hidden (And Not So Hidden) Cost of Not Investing in Leadership Development

Tighter talent budgets are a sad reality for many of us working in People and Talent Development teams right now, so it might be tempting to pause leadership development. 

But neglecting leadership growth isn't just a missed opportunity, it’s costing you money, talent and productivity, even as you read this.

One option is we bow our heads and agree to the exec team’s request of “running something inspiring, strategic, and measurable… in 45 minutes over lunch?” and hope for the best.

No thanks. Please don’t do that. Or at least, read this before you agree.

Counting the Invisible Costs

Let’s talk about what really happens when leadership development gets cut from the budget.

First up, you get disengaged teams, rising attrition and a strategy that slowly loses its edge because your teams aren’t equipped to execute at the level you need them to. According to Gallup, low engagement drained $436 billion from the UK and world economy through poor productivity and absenteeism in 2024. Ouch.

Then there’s turnover. Culture Amp predicts 23% of UK workers plan to quit in 2025, which is up from 20% in 2023. Replacing just one of them could cost you anywhere from £11,200 to £74,900, depending on role.

And here’s the final kicker: the reason they are thinking of leaving? Culture Amp’s analysis showed that leadership quality is one the most critical factors influencing commitment to stay for employees. So yes, skipping leadership development might save you money now… but it’ll cost you later.

Want your leaders to step up? Invest in them.

It sounds pretty simple, but if your culture is more “throw them in the water without teaching them how to swim” then you’re setting them up to drown. You’re trusting them to make the right decisions, drive performance and inspire people to take action, all without showing them how. 

Organisations that proactively invest in leadership consistently outperform their peers. A 2024 HR Magazine report found that companies treating leadership development and engagement as strategic priorities are 52% more likely to hit key performance outcomes. No surprise there and we know we’re preaching to the choir here. 

Where to start if you’re struggling to get buy in

Getting leadership development on the exec agenda isn’t always easy. Here are a few ways to move the conversation from "nice to have" to "non-negotiable":

Speak their language:
‍Lead with outcomes, not activities. Swap “We think we should run a leadership programme” for “Here’s how we improve performance at scale.” Bonus points if you tie it to a business priority they already care about.

Frame it as risk, not just reward:
‍Don’t just talk about the upside but show what it costs to do nothing. Think turnover, decision bottlenecks, toxic cultures, or lost innovation. Leaders understand risk mitigation. Use it.

Use internal data:
‍Pulse surveys, engagement scores, exit interviews are all your friends here. Connect the dots between what’s broken and how leadership development helps fix it.

Find an exec ally:
‍You only need one. The right champion with the right influence can open doors (and budgets). Start small, show impact and let the work speak for itself.

Prioritise or start small:
‍If you’re struggling to get buy-in for a full roll out of leadership development, focus your efforts on one population that’s going to have the biggest impact and then use those results to influence a broader roll out

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If you’d like a chat about how to invest in your leaders in a way that actually delivers measurable return on investment, drop us a message. We’d love for you to join our mission of ridding the world of shitty bosses and replacing them with Coachable leaders!

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