What is the global market size, in U.S. dollars, for leadership development?
Hello, and thank you for your request regarding the global market size for Leadership Development. The short answer is that the size of this market is a estimated $68.5 billion this year, and is growing due to increased demand for more effective leaders. A review of my methodology and calculations follow.
My in-depth search for pre-compiled statistics for the current market size yielded no results. All of the figures provided from credible sources were from 2014-2015. Also, there was no data available publicly on annual growth estimates for 2015-2017. During my search, a report from B ersin (Leadership Development Factbook, 2014) came up as a source repeatedly, even in 2016-2017 articles and reports by industry leaders. After more searching, I concluded that this is Bersin's most current report available. It does include a market analysis with the numbers needed to find the size of the global leadership development market, at least for 2014, but it is behind a paywall. However, I was able to gather enough information from other sources to provide you with an educated estimate of the market size.
OVERVIEW OF THE LEADERSHIP DEVELOPMENT MARKET
The need for leadership development is extraordinarily high as leaders are required to have new capabilities in order to lead effectively. Organizational goals have changed and include competencies like innovation and operating at high speed. In fact, 90% of organizations are redesigning their organizations to be more dynamic, team-centered and connected, all of which require a new type of leader. This new leader needs to know how to build and lead teams, engage people, and be a driver for innovation and learning -- and to do all of this in a digital environment.
In a recent study, 89% of organizations consider leadership as an "important" or "very important" issue; 57% see leadership as a "very important" issue. However, there remains a significant leadership gap: 28% say they have either "weak" or "very weak" leadership pipelines, and only 14% are "strong" at succession planning. And many leadership development programs do not help leaders become more effective, nor do they produce measurable impact and results. In fact, in the same study referenced above, 40% of respondents say their current leadership programs add just “some” value, and 24% report that they add "little to no" value. So there is a profound need for effective leadership development today.
Whether or not it's effective, organizations are spending more money on developing higher-level leaders. According to Training Magazine, 58% of organizations spend $1,000+ per learner on senior leadership; 32% spend $1,000+ on mid-level leadership and 23% spend $1,000+ on supervisory-level leadership.
MARKET SIZE RESEARCH
Unfortunately the Bersin report mentioned above is behind a paywall, and the price tag is $1,995. However, I was able to find some "tidbits", pulled from this and other Bersin reports, on trusted media sites. For instance, a Forbes article written by Josh Bersin himself indicates that corporate training has grown to over $70 billion in the U.S. and $130 billion in the world. Next, I worked on estimating how much of this $130 billion was spent on leadership development. Luckily I found data from another Bersin study conducted the same year (Corporate Learning Factbook, 2014) reporting that $31 billion, or 44% was spent on leadership development in the U.S. Using these figures, assuming the same percentages for global, we can estimate that the global market size for leadership development was $57.2 billion (U.S.):
$130 billion (corporate training spend) x 44% (percentage spent on LD) = $57.2 billion
Since these numbers are based on data from 2014, I wanted to find a way to provide more current estimates for you. I knew the numbers would increase for 2015-2017 since companies are spending more on development. This increased spending trend has been on the rise for the past five years. Getting up-to-date estimates for 2015-2017 required some additional triangulation of the limited numbers available. However, one study reported that corporate spending for training services overall grew approximately 6.25% in 2015, and increased even more significantly for leadership development. One source reported that leadership development spending was up 14% in 2014 (this was the highest increase in over 10 years). Training Industry reported similar increases with training spend overall, seeing a big jump from 2014-2015 (10.4%). After that big jump, overall training spend remained stable at 1%. Considering these percentages, if we apply a conservative increase of 6.25% (from above), we can estimate the size of the global leadership development market for the following years: 2015: $60.7 billion ($57.2b x 6.25% growth rate)
2016: $64.5 billion ($60.7b x 6.25% growth rate)
2017: $68.5 billion ($64.5b x 6.25% growth rate)
To wrap up, the global market for leadership development is an estimated $68.5 billion this year, and further growth is expected.
Thanks again for asking Wonder. Please let us know if we can help with additional research. Best of luck with your presentation!