Growing organizations need more leaders to sustain their expansion, but the demand for experienced people managers often exceeds supply.
Organizations might look internally for potential leaders — especially among their current high-performing employees. However, because SHRM research found that more than half of HR executives (51%) said their organizations don’t invest enough in developing people managers, this strategy can easily backfire.
Leadership candidates can end up missing some or all of the people-management skills needed to move an organization forward. A poorly prepared manager can undermine growth, retention, and culture. Furthermore, that move unfairly places a valued employee in a position without the tools and experience to succeed, which can damage their performance and retention.
Organizations — especially growing ones — can’t leave leadership to chance as they prepare for current and future business challenges. Instead, they must view developing a leadership pipeline as a strategic HR opportunity and imperative.
The Management Development Challenge
Although 92% of HR executives agreed that people managers are essential for an organization’s success, SHRM research has shown that organizations have a bumpy track record on leadership development:
- 64% of HR professionals said internal promotions are the main way they fill management positions, yet only 30% of organizations have a formal onboarding process for internally promoted managers.
- Only 40% of HR professionals said their people managers receive regular training to develop their management skills.
- 61% of HR professionals said fewer than half of their managers effectively address underperformance or areas for improvement among direct reports.
- Just 36% of U.S. workers rated their managers as highly effective.
If most organizations know that developing people management skills is important, why isn’t it happening consistently?
Paul Scott, pointed to several culprits. “Historically, it’s been difficult to prove the value of training, and it’s easy to then see it as a line item, which is the first thing you get rid of when budgets are tight,” he said.
Scott also highlighted the way promotions occur as an issue. “Someone may be promoted based on their individual prowess, but not based on how they interact with others,” Scott said. He added that as a result, if recently promoted employees haven’t already established themselves as trusted individuals or leaders among their peers, they aren’t immediately recognized, trusted, or respected.
But a shift in HR priorities toward deliberate development as organizations grow may be in the works. In 2025, 51% of CHROs identified leadership and management development as a top priority, according to SHRM research.
Developing a Leadership Strategy
Before developing an expanded manager pool, consider what your organization needs, Scott advised. “We have to know what challenges we are trying to solve for the short term and long term. Which of these challenges are tied to the success of the leaders and to the business?” he said.
Then, organizations should identify which leaders are succeeding and what they are doing to succeed. Scott suggested using that same perspective to identify the leaders who did not succeed and analyze what went wrong.
Scott said the next step is to determine how much time new managers can commit to the development efforts, so the training process realistically matches the available time.
When designing the actual training process, be sure to:
- Build a consistent framework to equip new managers with the critical skill sets, including communication, feedback, conflict resolution, and performance management.
- Commit to continuous development through mentoring, coaching, and feedback.
- Utilize assessments to identify progress on competencies
- Create leadership development pathways that are flexible, allowing for individual preferences, interests, and strengths
A best-practice example of this approach is SHRM’s People Manager Qualification Plus (PMQ+), which integrates interactive learning with mentorship to reinforce the skills most critical for effective management. This type of model helps organizations scale consistent leadership training, strengthen their manager pipelines, and ensure new leaders are set up for long-term success.
Preparing Managers to Succeed
Organizations cannot assume that newly promoted managers will automatically develop good people skills: The stakes are too high. Instead, by taking the lead in designing consistent manager development pipelines, HR can ensure the manager pool grows with the organization while demonstrating the value of investing in leaders.
Moreover, as the organization grows, the next generation of managers has the knowledge, experience, and confidence to not only lead but also thrive.
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