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Is there a leadership crisis brewing? Why leadership development programs are a must-have in 2025

The business world is at a leadership crossroads. Baby Boomers are retiring en masse, and a new generation of employees is upending traditional workplace expectations.

What’s more, the rapid advancement of artificial intelligence and an increasing focus on employee mental health are disrupting long-held norms in the workplace.

It’s a recipe for unrest in the hands of unprepared leaders—which is why, , leadership and management development has been a top priority for HR departments in 2025, reports , an HR and payroll software company.

Why leadership programs are crucial for organizational success

Leadership programs aligned with business strategies are the secret to long-term success. It’s not just an HR initiative but a strategic business move, as effective leaders should boost productivity, morale, and innovation across the board.

This significance is undeniable, yet a found that only 13% of organizations believe their leadership development programs are fully aligned with their business strategy.

Good leaders are also a hedge against miscommunication, stalled initiatives, and high employee turnover, which eat into an organization’s bottom line.

How can organizations elevate their leaders to drive business success effectively?

The key phases of building a leadership development program

A successful leadership development program isn’t haphazard. It requires an intentional, structured approach that accounts for the following core phases:

1. Leadership Assessment and Skills Gap Analysis

Building the right program starts with understanding your leadership needs. Conducting a leadership helps evaluate existing capabilities and gaps, ensuring programs are tailored to foster growth.

By engaging with executives, frontline managers, and employees, HR teams can identify core competencies that leaders across levels should master.

Focus on both universal skills like communication, adaptability, and emotional intelligence, as well as role-specific needs such as technical and industry-specific capabilities.

While broader skills are essential to any leadership development program, it’s equally important to root the initiative in your company’s core values.

“Your mission, vision, and values are the foundation,” , a professor specializing in HR and Leadership studies at University Canada West. “Leadership programs help integrate these values into daily routines, creating alignment and fostering success at every level.”

Organizations that tie these needs directly to key business goals, like productivity or innovation, stand to see a measurable return on investment from leadership training.

2. Strategic Alignment and Making the Case

Securing executive buy-in is crucial. To align leadership initiatives with broader business objectives, HR leaders must clearly demonstrate the positive cost-to-benefit. How does this program drive innovation? What’s the cost of not developing leaders?

Framing leadership initiatives as solutions to current or potential business problems can sway decision-makers. For example, a lack of skilled managers could lead to employee turnover. And equipping leaders to manage change or improve communication mitigates such risks.

Bethany Romestan-Byrne, director of learning and development at Paylocity, emphasizes the importance of HR leaders customizing their message to suit their audience.

“Knowing your audience is so important,” she said in . “While I may talk to a CFO about revenue pull-through, I might talk to a frontline leader more about efficiency, better partnering, and teaming.,”

3. Designing a Framework

An effective program builds leaders at every stage—from new managers to senior leaders. Businesses can establish clear goals using assessments from Phase 1. Scenarios such as , leadership pipelines for high-growth teams, or cross-functional initiatives influence the program's structure.

In a , Angela Ostermann, Paylocity’s manager of organizational learning and effectiveness, stresses the need for an engaging curriculum that meets the needs of diverse learners.

Role play and simulations play an important role as well, Ostermann notes.

“Sometimes role plays can seem or feel awkward,” she said. “But the truth is that the brain doesn't know the difference between practice and reality. It processes the same, so it will help you improve.”

4. Implementation and Continuous Improvement

The final, ongoing phase focuses on rolling out the program and collecting feedback to refine it over time.

Metrics like promotion rates, engagement scores, or course completion rates can track progress and demonstrate value. Annual updates based on skills gap analyses ensure programs evolve with the organization’s needs.

5. Lead by Example

Amid the fast-changing dynamics of today’s workplace, prioritizing continuous growth and improvement has become essential. According to Ostermann, this commitment to learning must begin at the top.

“Demonstrate a culture of growth and improvement at the organizational level,” she said. “When employees see leadership evolving and improving, it sets the tone for everyone to value continuous learning.”

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