The constant change of the past few years has been exhausting. We’ve read constantly about how many employees are burned out and are leaving their jobs—or leaving the workforce entirely. So it’s not surprising that, according to recently released research by DDI, CEOs are most worried about their workforce.

Leaders see the impact of multiple stressors—financial precariousness, caregiving duties, and more—on workers, managers, and fellow leaders. Leaders and middle managers are also contending with historically low unemployment and drastically altered worker expectations that have made recruiting and retaining workers increasingly difficult.

So much so that the top three concerns among leaders that DDI identified are

  • Attracting and retaining top talent (59%)
  • Developing the next generation of leaders (50%)
  • Maintaining an engaged workforce (45%)

Typical concerns, even timely ones like keeping up with technology (24%) and driving product innovation (36%) have fallen far below these recruit-and-retain challenges. And despite concerns about a potential recession, DDI found that “CEOs are deeply sensitive to the fact that their most crucial group of workers—highly skilled specialists and future leaders—may leave for a better experience at a competitor, change career paths, or even take a break from the workforce due to burnout.”

Organizational cultures need to change

More than half the companies in the DDI survey (54%) saw higher-than-usual turnover in the past year. The top two drivers of this turnover—ineffective leadership and lack of flexibility—point to a need for big changes in company and, especially, leadership culture.

A Coursera for Business report on modern leadership cites the digital revolution as a driver of changes in “expectations, demands, and skills in four key areas of leadership: leading an organization, leading teams, leading transformation, and leading oneself” that also suggest changes in organizational culture are needed.

These expectations extend beyond leaders and managers to workers—according to the Coursera report—in ways that point to areas where training might focus: “Remote work also brings high expectations on every employee in the business to perform as a strong team player, regardless of whether they have direct reports. Everyone must be responsible for clear communication, workload management, and structured decision-making.”

Managers are burned out

As senior leaders grapple with these challenges, they also face burned-out frontline and mid-level managers who may struggle to find meaning or purpose in their work amidst constant change over the past few years and significant increases in their responsibilities.

Tasks including shifting to remote and hybrid work, addressing social and corporate imbalances and injustice, recruiting, training, and retaining employees in a tight labor market takes time and resources. In addition, Denise Hamilton writes in MITSloan Management Review, “These challenges have required managers to stretch beyond the leadership skill sets that many possess or were trained for. … These changes in expectations can add additional stress for managers as they aim to strike a balance in developing deeper relationships while avoiding any perceptions of bias.”

Hamilton advises that senior leaders work with managers to audit all the tasks and initiatives managers are responsible for, identifying overlap, paring down initiatives to a manageable level—and potentially expanding middle management. Above all, managers should be part of the solution, Hamilton emphasizes: “It’s also crucial to listen to managers about what would work best for them. … Managers want to be part of the solution—they just need a chance to breathe.”

Diverse leadership development is critical

DDI’s report contends that part of the solution is ramping up leadership development while also diversifying the pipeline.

The old ways of doing things don’t work; to thrive, organizations need to focus on recruiting internally for leaders—and look at candidates they’ve traditionally neglected. Only 21% of leaders say their companies actively recruit and promote from diverse candidate pools, for example. That has got to change.

Since 2011, the number of companies that report having a strong leadership “bench” has fallen by a third. The small number of companies that do have a strong leadership pipeline also have 22% more women in leadership roles and 36% “greater leader background diversity” than the companies that are struggling.

And, according to DDI, leaders need to look farther down the ladder for potential leadership trainees: “The greatest source of untapped leadership potential is at the lowest levels of an organization. However, leaders may not recognize potential if it doesn’t align with what leadership has traditionally looked like in the organization.”

Evidence suggests that these efforts will pay off; the 54% of companies that focus on leadership development at all levels are in the top 10% of their industry in terms of financial performance, DDI said.

5 critical skills for leaders

In fact, leadership development tops DDI’s list of five critical skills that future leaders need—but that less than a third of companies train for. These are:

A Learning Guild eBook that examined the changing expectations and demands on leaders refines this list and underscores the value of these skills. For example, it highlights a shift from top-down strategic planning to a “collective vision” for a team or department—inviting the strategic thinking of leaders at all levels. The needs for empathetic leadership and flexibility reflect the value of successful change management, decision-making, and ability to influence others at all levels.

Build your leadership skills

The Learning Guild is a key partner in your career development and growth as a leader or manager. The upcoming Learning Leaders Online Forum is the place to explore leadership strategies and skills, network with other learning leaders, and dive into discussions of developing a diverse leadership pipeline or building a strong team. Join sessions and conversations that examine emerging tech and learn to “think like a business.” Register today for these two jam-packed days filled with interactive sessions, networking opportunities, and hands-on activities that will provide the inspiration you need to solve your leadership challenges.