Interpersonal Skills

7 Reasons Why Interpersonal Skills Are Important to Develop — in Good Times or Bad

Many employers regard interpersonal skills as a nice to have.  But when business gets slow, interpersonal skill training is first to go.  Should this be the case?  We present 7 reasons — backed by research — on the value and importance of interpersonal skills in the workplace.  We also cover the ROI of interpersonal skills, so you can make a case to management why you need interpersonal skill training, whether business is booming or in a lull. 

Here, we use the term “interpersonal skills.”  Whether you call them “soft skills,” “communication skills,” or “people skills,” we are basically talking about the same thing. These are skills needed to deal effectively with others and get things done.  With our terms defined, let’s look at the case for interpersonal skills development in your organization. 

1. Managers Aren’t as Inspiring as They Think They Are.

There is a discrepancy between how leaders perceive their own leadership abilities and how their employees see them. According to a study by Gallup, 77% of leaders believe that they inspire action. But according to the same study, employees say 82% of leaders lack leadership skills.

It is difficult to address a problem if you don’t even know that it exists. Leaders need to develop self-awareness and stronger interpersonal skills in order to close the gap between self-perception and reality. This self-awareness can be achieved through people skills training to build more effective managers.

2. People Leave Bad Bosses, Not Companies

There is a saying that, “people don’t leave bad jobs, they leave bad bosses.” This is supported by research. According to Virtual Speech, 50% of employees leave their jobs because of bad managers.  Developing good managers that know how to interact with people improves employee satisfaction and increases retention rates, which saves money for the company in the long run.

Research also shows that employees place a high value on training and personal development opportunities. According to a Gallup study, lack of investment in staff is the main reason 91% of departing employees look for a new job. According to another survey by the UK Department of Education, 63% of employees would change employers if offered more training opportunities.  

Investing in people skills development shows employees that the company cares and is invested in their success and professional development, so they are more likely to stay with the company and mirror the investment.

3. Leaders are Ineffective at Meeting Business Goals

According to Get Smarter, only 40% of businesses believe they are developing leaders in a way that benefits the business, and only 19% of organizations say leaders are “very effective” at meeting business goals.  If leaders are not very effective in their jobs, they probably need some extra support in the form of people skills training.

Part of a manager’s effectiveness depends on the success of their team. According to Forbes, 70% of team involvement is dependent on the manager.  For managers to be effective they need to know how to motivate and work with their employees. These skills can be developed through programs such as The Q4 Edge, which provides leaders with the tools and strategies needed to work effectively with others and build trust within a team. 

4. ROI of People Skill Training: 250%

The increased productivity and retention that result from the development of people skills are well worth the investment in the long run. In a study conducted by Boston College, Harvard University, and University of Michigan, they found that people skills training boosts productivity and retention by 12% and delivers a 250% return on investment based on retention and productivity. 

Additionally, effective leaders produce more revenue. Teams with great managers see 27% more revenue per employee. This is because good leaders engage people. A Gallup study demonstrates that employee engagement leads to higher profitability, higher productivity, lower turnover, higher quality, less absenteeism, less shrinkage, and fewer safety incidents.  Investing in people skills development for leaders and managers has benefits for the company that show up on spreadsheets.

5. The Workplace has Changed: People Skills are More Important

In this day and age, the importance of interpersonal skills in the workplace is higher than ever.  Even in virtual environments, people skills are essential. When teams are not working face-to-face, leaders need to be even more aware of how their actions and communication style impact their direct reports.

In the last few decades, workplace structure has shifted from a bureaucratic, siloed model to an ecosystem, team model. The modern workplace requires creativity; leaders are required to create things that do not exist. They are no longer able to rely on the past and now must work with their teams for synergy and innovation. 

The modern workplace requires cooperation and effective communication, both of which can be attained through people skills development. People skills are an important investment for any company desiring the flexibility to navigate an ever-changing world.

6. Leaders Are Not Equipped to Lead into the Future

Most businesses do not feel they have leaders capable of developing the future of the company. A whopping 71% of companies don’t feel their leaders are able to lead their organization into the future, and 84% of organizations anticipate a shortfall of leaders in the next 5 years, according to Get Smarter

It is the responsibility of companies to nurture and develop their leaders so that they are capable of bringing the company into the future when their time comes. Investing in people skills gives these leaders the tools they need to continue the success of the company into the future.

7. People Skills are Durable

People skills apply, no matter what the task. They are not context specific and they do not lose relevance over time. Technology may change many times throughout a career, but working and interacting with people remains a constant, whether it’s in-person or via video conference. Investing in people skills is a long-term investment that can withstand an ever-changing environment.

As technology develops, people skills will continue to be important. Artificial intelligence is taking over many repetitive tasks and hard skills, but you cannot teach a computer people skills.  There is no replacement for good leadership, which is why it is essential to invest in the development of effective leaders. As business and technology develop, people skills remain important. 

Conclusion and Next Steps

We hope these 7 reasons have convinced you — and will enable you to convince senior management — of the importance of interpersonal skills in the workplace. With strong interpersonal skills, your leaders will be able to:

  • Improve employee retention and engagement
  • Drive higher productivity and profitability
  • Enable better teamwork, collaboration, and innovation
  • Become a more successful, modern organization
  • Attract the best employees

If you are looking for interpersonal skills development, check out our leadership development resources.  You’ll find everything from classroom and virtual interpersonal leadership skill workshops, coaching, 360˚ surveys, team development, and more. 


Written by Julianna Hefele

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