As global companies continue to increase investment in leadership development to strengthen retention, South Africa risks falling behind. Internationally, organisations are lifting leadership development spend by an average of 10% a year, but constrained budgets locally have limited similar investment, despite mounting pressure to retain high-performing talent.
In South Africa, leadership development investment should realistically be closer to a 15% to 20% over the medium-term, as while local organisations may not be able to match the spending power of larger global markets, leadership capability remains one of the country’s strongest differentiators. Encouragingly, many boards and executive teams recognise this and are beginning to prioritise development more deliberately.
Research from Heidrick & Struggles, a global leadership advisory firm, shows that three in four executives fear losing employees to better external opportunities, while over 90% believe learning and development are essential for retaining top talent. But many companies struggle to translate this awareness into effective action, often investing in poorly targeted or ineffective and costly interventions that deliver limited organisational value.
Decisions to stay or leave an organisation are deeply personal, making it difficult to determine where to invest for the greatest impact. However, based on its work across South Africa and internationally, Heidrick & Struggles has identified seven key leadership development practices commonly used by companies with stronger retention outcomes:
- Clearly linking skills development with career progression
There is a clear link between skill development and career progression. Yet many development programmes, including further education and external coaching or mentorship, fail to connect to an employee’s actual role. When development enhances a CV without improving day-to-day performance, its retention and organisational impact are limited.
- Embedding leadership development into organisational culture
The most effective development programmes should complement a company culture that supports employee well-being, morale, and empowerment, rather than being treated as compliance exercises. Many high-performing leaders placed by Heidrick & Struggles come from organisations that consistently invest in development across the business, reinforcing leadership capability as a shared expectation instead of a selective reward.
- Aligning leadership development to organisational purpose and values
Employees who are aligned with a company’s purpose and values tend to be more satisfied in their roles and remain longer. Leadership development is most effective when it reinforces meaning in work and supports greater harmony between individual motivation and organisational direction.
- Building leaders who can manage constant change and uncertainty
Talent is more likely to stay through volatile cycles when organisations prepare individuals and leaders to successfully handle change. Leaders who are prepared to adapt quickly and manage uncertainty well are also better equipped to help teams remain stable and work through any challenges more efficiently.
- Using leadership development as a visible signal that talent is valued
Sustained, large-scale investment in leadership development signals a company’s long-term commitment to its employees, particularly when supported by other retention practices. That investment communicates value, reinforcing an organisation’s intent to grow its people internally.
- Avoiding inconsistent or credibility-damaging implementation
A persistent issue across industries is inconsistent implementation. Programmes are often poorly designed or applied unevenly. Fast-tracking individuals who do not demonstrate the organisation’s values creates perceptions of unfairness and weakens the credibility of development initiatives, eroding their retention value.
- Broadening development beyond senior and C-suite roles
Leadership development is often concentrated at senior or executive levels rather than focusing on high-potential employees throughout organisations with the capacity to grow. A bottom-up approach, with layered development at multiple levels, delivers far greater impact.
Ultimately, leadership development supports retention most effectively when organisations first correctly identify whether dissatisfaction stems from development gaps or from deeper issues such as misalignment around purpose, direction, or culture. Development also delivers the greatest value when it includes practical experience, role movement, and exposure to new challenges, rather than relying solely on classroom-based learning or isolated interventions.
For organisations under pressure to retain leadership capability, development investment must therefore be treated as a strategic choice rather than a discretionary cost. When applied with clarity and discipline, development programmes can significantly strengthen succession and improve company performance, delivering impressive returns on investment.
By Mark Watt, Partner at Heidrick & Struggles South Africa
