"When women leader Leave, Losses Multiply": Potential projects

The third of the six editions of The Human Leader study, a bi-annual examination of the key characteristics that define a new paradigm of human-centric leadership, is out with new analyses and insights. Conducted by Potential Project, global research, leadership development, and consulting firm, this edition covers a much debated and, simultaneously, the much-evaded topic of the impact of women leaders in our organizations.

Although many organizations sincerely rally for equal opportunities, inclusion, and diversity in the workplace, none yet have been able to quantify the difference women bring to the table. Potential Project's research has taken up the task and measured female leaders’ impact on not just job engagement and job performance – parameters that have been proven to have a direct relation to cost and revenue – but also on the actual avoided costs of lost productivity and employee replacement.

According to the report, female leaders lead to an increase of 5.5% in job engagement with a female follower and a 4.8% increase with a male follower, as compared to when the leader and the follower are both males. In contrast, male leaders only lead to a 2.6% rise in job engagement when their followers are female rather than male. The report also reveals similar results in terms of job performance where female leaders have the capability to increase their male followers’ performance by 5.5% when compared to a male leader.

Plus, it costs one-half to two times the annual income of a worker to replace an employee. Therefore, by keeping workers engaged, women leaders save $9,000 per year on every disengaged employee and between $30,000 and $120,000 per year on the ones that resign. In addition, the costs of lost productivity that women leaders are able to save reach a hefty $1.4 million per 1,000 employees.

 The question that naturally arises next, then, is what are women leaders doing differently. Which qualities of theirs are driving markedly different, and better, results from their male counterparts?

The research answers that these outcomes are driven by women leaders being perceived as wise and compassionate by their followers. They were shown to possess 28% more wise compassion than male leaders and scored higher than men on three out of the four attributes (courage, candor, transparency; presence being the fourth) that go into making a wise, compassionate leader.

However, it's not the end of the road for male leaders. Potential Project found that these attributes can be learned. Hundreds of forward-thinking organizations, such as IKEA, Unilever, Cisco, LEGO, and Accenture, rely on Potential Project's network of 200 consultants and facilitators spread over 28 countries across the world to do just that.