Leadership development is a booming problem for Canadian employers, says academic, offering tips on how to retain, develop future leaders
Canadian organizations are at a tipping point when it comes to future leadership, according to a recent Canadian survey.
It found that 21% of high-potential individual contributors plan to leave their organizations within the next year — up from 13% in 2020.
This growing departure rate raises an urgent question: Are organizations doing enough to support and retain their future leadership talent?
Wendy Cukier, professor of entrepreneurship and innovation and founder of the Diversity Institute at Toronto Metropolitan University, sees this as a major vulnerability—particularly for Canadian employers.
“The world is very uncertain right now. We don't know how fast things are going to change, we don't know what the impact of AI is going to be. But what we do know is the boomers are retiring, and many, many, many sectors already are experiencing skills and labour shortages, and that's simply a demographic fact,” Cukier says.
“If we don't find ways to attract and retain talent ... we're going to be in a lot of trouble.”
DDI’s Global Leadership Forecast 2025 also shows that when key development elements are missing—such as coaching, feedback, advancement opportunities, and trust in leadership—high-potential individuals are between 2.7 and 4.8 times more likely to leave.
Closing boomer gap in leadership development
Also of note? Only 20% of HR professionals feel confident in their leadership bench strength, finds DDI, meaning most organizations are unprepared to fill key leadership vacancies.
One of the most pressing challenges facing Canadian organizations is the accelerating retirement of baby boomers, many of whom hold the most senior leadership roles. This means supporting high-potential individual contributors now is an existential necessity, Cukier stresses.
“Boomers are disproportionately likely to be at the higher levels in the organization. So with boomers retiring, it's creating big gaps in terms of leaders,” she says.
“You can't take a 22-year-old university graduate … and slot them into senior roles."
And simply accelerating promotions or expanding leadership development for junior staff won’t be enough; Cukier suggests organizations consider more creative workforce models – particularly partial or phased retirements – as a bridge solution.
“With some [boomers], it's [good] they're exiting, making space. But with some, there may be innovative approaches that will allow you to keep people from leaving, as well as developing new talent,” she says.
One solution is fractional leadership: bringing back or retaining senior leaders on a part-time or project basis to mentor, advise, or lead transitional initiatives. This enables knowledge transfer, preserves institutional memory, and buys time for younger leaders to grow into their roles with proper support, Cukier says.
Source: Development Dimensions International
Future leader development must be clear, inclusive, and strategic
Supporting high-potential contributors for future leadership requires more than traditional training modules; DDI’s report emphasizes the importance of personalized growth paths and mentorship programs for retention, detailing that high-potential individual contributors are 3.7 times more likely to leave their organization in the next year if their manager doesn't "regularly provide opportunities for growth and development."
High potential employees are 3.1 times as likely to leave in the next year if they feel they "aren't advancing at an acceptable rate," the report found.
Cukier agrees that a strategic approach to leadership development is essential, but she adds that it needs to start at recruitment.
Cukier says that a strategic approach to leadership development is essential, but it needs to start at recruitment.
“It includes recognizing that culture and values are your organization's biggest assets, and 'How are people contributing to building the culture?' It means thinking about what the skills are that leaders require and how you're going to assess them,” she says, “because often leaders are picked based on ‘who knows who’ or how they perform in an interview, rather than really drilling into their leadership competencies.”
Because of this, strong leadership identification systems are critical in ensuring the right individuals are picked. And once they are singled out, the DDI report stresses that without active development, high-potential individuals can quickly disengage: those who don’t receive purposeful growth opportunities are 3.7 times more likely to plan their exit.
Clear, informative feedback a cornerstone of leadership development
Cukier points to feedback as a critical element of leadership development that is often fumbled by managers.
“How that feedback is offered is part of the issue, and I think that what's happened, in some cases, is because of the focus on empathy and trust and so on, what that has done in some organizations is made people reluctant to provide any feedback that would actually help employees grow and develop,” she explains.
“So figuring out mechanisms to provide feedback in constructive ways that will help employees develop is, I think, important.”
This includes making advancement opportunities clear at the time of recruitment and not leaving contextual rules to chance.
“Having the pathways clear and well understood is really important,” Cukier says.
“There's got to be more effort to make explicit the unspoken rules, so people know what to expect … and if it's an organization that's quite flat, where there simply aren't a lot of promotional opportunities, that's got to be made really clear, so that everyone coming in the door doesn't expect to be the CEO in five years.”
Conflicting priorities make leader development challenging
A powerful insight from both the DDI report and Cukier’s research is the link between trust and retention.
“Trust is not just built because you say to someone, ‘You're awesome, you're awesome, you're awesome,’” Cukier says.
“Trust is built because someone expects you to be fair but honest with them.”
DDI’s report echoes that sentiment, showing that employees are nine times more likely to trust their managers when they receive effective coaching and 11 times more likely to trust them when their development is supported.
But building trust isn’t easy—especially in the post-pandemic, hybrid workplace, Cukier points out.
“COVID really upended, I would say, almost everything about the workplace. It accelerated the rate of digitization. It decreased the level of interpersonal engagement," she says.
“Many organizations are still fighting to get people back in the office.”
That context makes empathetic leadership more essential than ever, not only due to outside forces but because of evolving expectations. Employees and middle management, Cukier says, now expect their organizations to match their own values around trust and culture; “More the intangibles than even 15, 20 years ago, when the focus was more on performance and tangible rewards.”
These expectations combined with heightened pressure have created a sort of Catch-22 situation for HR leaders who are caught between people engagement and development and increased demands.
“This is occurring at a time when organizations are under more pressure than ever to do more with less … you have to produce results,” says Cukier.
“At the same time, they're being told that they have to handle their employees very carefully and think about empathy and safe workplaces and so on. It really creates a very challenging environment.”
Don’t ignore equity, diversity and inclusion in leadership development
For high-potential employees from underrepresented backgrounds, the leadership journey is even steeper; Cukier stresses that gender, race, and age continue to shape how leadership potential is recognized and rewarded.
“Women face an inordinate amount of what would be described as ‘upward bullying,’ meaning that their staff don't respect them, don't do what they want them to do. They expect them to be their mom, their sister, their BFF,” she says.
“Women are much more likely to receive negative feedback and performance appraisals, much more likely to be judged on accomplishments rather than potential.”
Plus, she adds that in Canada’s multicultural workforce, the stakes are higher still:
“Not only do you have generational differences and gender differences, but you have the complexity of 25 to 30 per cent of people were born outside of Canada,” she notes.
“You have the issues of deeply embedded bias, racism, discrimination that comes out over and over again and is particularly a problem when women, racialized people, [and] Indigenous people move into leadership roles.”
The struggle isn’t over when these individuals reach leadership roles, Cukier adds, stating that once they do, “there are a lot of people waiting to push them over the edge of the cliff.”
These realities underscore the importance of bias-aware talent development systems.
Practical leadership development: focus on culture building
The Global Leadership Forecast 2025 shows that organizations using five or more leadership development strategies are 4.9 times more likely to improve leadership capabilities.
It's important to embed leadership development into everyday culture, Cukier says.
“They always say ‘culture eats strategy’, but it's the hardest thing to do,” she explains, recommending that HR work on building culture of across-the-board responsibility of focus on “potential rather than track record” for leadership potential.
“Some of the most progressive organizations will actually embed in performance plans and performance appraisals, questions about, ‘What did you do to build the culture? How did you help build talent? How did you help with employee engagement?'” says Cukier.
“Those are things that you can start to build into the expectations of leaders at every level, that will make a difference in making sure that people get the feedback that they need in a way that makes it palatable.”
With resources already stretched at many Canadian organizations, leaving HR leaders wondering how to increase leadership development with less, Cukier offers AI technology as a possible source of relief.
“Canada has a huge productivity problem, so I would be the last to say we need to set our expectations lower,” she says.
“We're really at risk. I think we have to find ways to work smarter and more effectively, and part of that is technology, part of that is process, and part of that is the people. Those can get out of alignment.”
