RESEARCH shows that companies that attract and hire the best talent will outperform those companies that hire less qualified people.

As a result, many companies work hard to build their reputation as employers who attract candidates that have the right mix of skills, talents and knowledge to build better products, provide better services and keep customers happy.

Recruiting programmes, good compensation and innovative benefits all help attract candidates, but getting them to stay is another matter altogether.

Leadership and work relationships play a key role in organisational success.

Recent research on the association between employee satisfaction and job performance suggests that the single most important contributor to employee engagement, empowerment and satisfaction is the relationship employees have with the leaders of the organisation.

Research by DBM, a global human capital management firm, indicates that the most commonly cited reason employees leave companies is their unhappiness with their manager.

The top 10 per cent of the managers in a company will have half the turnover rate of the middle 80 per cent and two and a half times less than the bottom 10 per cent.

Thus, good leadership makes a huge difference not only in staff retention but also to overall company performance.

This observation is supported by published literature, including the bestseller, The Extraordinary Leader, by Dr John Zenger and Joseph Folkman. 

A research-based book about leadership effectiveness, it analyses 200,000 assessments from 20,000 managers and presents new insights that demystify this complex subject.

Great versus good

It clearly establishes the importance of developing great leaders versus being satisfied with merely good ones, and highlights the link between leadership behaviour and an organisation’s performance.

Companies typically promote employees to management because they are high performers.

But the skills that make a high performer are not the same skills that make good leaders.

The research shows only 29 per cent of those employees who are high performers have the potential to be great leaders.

Two qualities make the difference:

First, great managers have high emotional intelligence — they know themselves better and handle themselves well with others.

Secondly, they are very good at learning and applying what they learn to improve their skills.

Organisations must invest in developing career-minded individuals who aspire to become top executives, encouraging them to do the following:

* Improve their ability to work with others;

* Take advantage of in-house training and leadership development programmes;

* Seek out feedback and develop their level of self-awareness; and

* If they are managers, hire executive coaches to help them develop the leadership skills they need for the next level of responsibility.

People skills

High performers are prime candidates for promotion. But being successful leaders requires people skills to inspire, motivate and manage others effectively.

Truly effective leaders can create a better work environment, obtain higher productivity and achieve greater staff retention, and are well worth investing in.