The State of Leadership Development in Small and Mid-Sized Businesses (SMBs) Complimentary Whitepaper

It’s clear from our study and our client conversations that there’s as great a need and desire to strengthen leadership pipelines and build high-performing teams as in large organizations with whom we partner.

Small and mid-size businesses (SMBs) contribute more than 99% to the U.S. GDP and account for more than two-thirds of all new jobs in recent decades. In spite of their contribution to the U.S. economy, very little attention has been paid to leadership development practices in smaller organizations. Not surprisingly, most studies explore talent management practices in large organizations where resources and sophistication levels are typically greater. These best practice examples are usually out of the reach of small to mid-sized enterprises, placing them increasingly at a disadvantage as the war for talent heats up in their industries.

The purpose of AJO’s study was to identify leadership development challenges, opportunities and best practices within a small group of SMBs in the greater New Jersey/New York area, and to benchmark SMBs with the larger organizations with whom they compete for talent.

What We Learned:

1.) Leadership pipelines are weaker than current capabilities in SMBs. Talent identification and development is rudimentary overall. Demographic changes and pending skill shortages will make hiring and developing talent a strategic imperative for SMBs to effectively compete for talent with large organizations in their industry sectors.

2.) Overall sophistication levels are low when it comes to leadership development and talent management. HR awareness and concern is high in contrast.

3.) Limited resources (time and budget) and fragmented approaches are the biggest impediments to implementing integrated talent…

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