Is Your Leadership Model Aligned with Employee Well-Being?

A leadership crisis may soon be heading our way, according to the results of a recent survey by risk management and consulting firm Gallagher

Based on responses from more than 200 U.S. employers, including HR professionals and C-suite leaders, the survey found:

• 59% of respondents believe their organization has a shortage of effective leaders.
• 33% said their organization is prepared to fill a critical leadership role if it becomes vacant unexpectedly.
• Only 6% are very confident their organization has a strong leadership pipeline

To better understand this potential crisis and how you can avert it, Workspan Daily dug into this data and more with Steve Dion, Gallagher’s national managing director of leadership and organizational development.

Steve Dion, Gallagher

WD: What are some key findings you can share from the report?

Dion: Employers rated the effectiveness of their leadership as relatively low, with a majority saying their organization lacks enough effective leaders, and only 5% rated their leadership as excellent. Aligned with these findings, the confidence in their leadership pipeline is low, with just 6% very confident and most organizations unprepared for sudden vacancies.

At the same time, more than half of employers said leadership capability in new workforce entrants is declining. Pulling all these data points together, unless organizations do something different, they are headed toward a leadership issue that will disrupt their organization’s success.

WD: Where do employers see leadership gaps in their organizations?

Dion: Survey respondents saw the biggest gaps in people leadership and in execution. Coaching and developing talent stood out as the most significant gap (72%), followed closely by communication and transparency (64%).

There also are clear weaknesses in accountability, decision-making, strategic clarity and leading change. Taken together, the gaps are less about technical expertise and more about leaders’ ability to effectively align, engage and develop their people.

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“The modern leader is expected to balance strategy with people development in a much more integrated way than in the past.”

WD: What skills and competencies are employers looking for in their future leaders?

Dion: Organizations are prioritizing leaders who can align, develop and mobilize their workforce. Strategic clarity, coaching capability and strong communication rise to the top. At the same time, there is increasing emphasis on change leadership and the ability to navigate disruption, including the impact of artificial intelligence (AI).

The modern leader is expected to balance strategy with people development in a much more integrated way than in the past.

WD: Fifty-three percent of the surveyed employers believe leadership skills are weaker among those entering the workforce today. Why is this occurring?

Dion: This appears to be driven less by individual capability and more by system gaps, including limited early leadership development and inconsistent career guidance.

Only a small percentage of surveyed organizations reported strongly supporting early talent in preparing for leadership roles, pointing to a development pipeline issue rather than a talent deficit.

WD: Based on this report, why are early career employees reluctant to pursue leadership roles?

Dion: These employees are increasingly prioritizing life balance over professional advancement. The primary reason cited is the desire to protect work-life balance (67%), followed by concerns about stress (50%) and inflexible work structures (44%). Many also question whether leadership roles provide meaningful impact or satisfaction. As a result, leadership is often perceived as a role with significant personal cost and uncertain return.

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“The newest generation of employees are primarily motivated by the opportunity to make an impact, not by compensation.”

WD: What are some motivations and concerns about moving into a leadership position?

Dion: The newest generation of employees are primarily motivated by the opportunity to make an impact, not by compensation. The ability to influence organizational outcomes and develop others are the strongest drivers that drive them to choose leadership.

At the same time, concerns are significant. The potential negative impact on work-life balance is the most common concern, along with stress and concerns about values alignment. This creates a tension where leadership is appealing in purpose, but employees don’t see it displayed in practice.

WD: In that case, how can organizations make leadership roles more appealing?

Dion: Organizations can focus on making leadership roles more manageable and providing early career leadership support. Employees are looking for stronger training, clearer career paths and more manageable role expectations. Flexibility, greater decision-making authority and stronger support systems also play an important role.

Ultimately, improving the day-to-day experience of current leadership will signal to others that leadership roles are desirable.

WD: Based on the survey findings, what are some next steps for employers to consider as they develop employees into tomorrow’s leaders?

Dion: Organizations should start by redesigning leadership roles to reduce burnout and increase flexibility. They also need to invest earlier in leadership development and provide clearer career pathways. Building core capabilities in coaching, communication and change leadership will be critical. Just as important is strengthening support systems for new leaders, including ongoing development and coaching. More broadly, organizations should reposition leadership as a role centered on purpose and impact — not simply an increase in responsibility.

Editor’s Note: Additional Content

For more information and resources related to this article, see the pages below, which offer quick access to all WorldatWork content on these topics:

• Career Growth
• Employee Experience
• Well-Being