New research suggests that 56% of people aim to change jobs this year due to their manager. This means that someone who doesn’t get on with their manager is highly likely to jump ship. Some estimates suggest that up to one third of UK employees want to change job in 2024. Though there are many reasons for leaving, including pay, managers are clearly part of the problem. However, every problem has a solution and it requires a few tweaks to start improving. So, today we discuss the staff retention nightmare as managers cause people to leave.
Staff retention nightmare
Not so long ago, businesses were firing. The pandemic hit and many sectors shutdown and results slumped. Then came the rebound as business opened back up and people had built up savings where they could work from home. 2022 brought the start of the Ukraine war and a cost-of-living crisis as energy prices and some food items surged. Now, as a result of inflation, businesses are lumbered with higher input costs, higher interest rates (especially problematic if highly leveraged) and customers with less money. This is really a time to think about reducing costs and labour costs is always the trickiest.
Sure, perhaps it is a good thing if a few of your low performers decide to depart. There may even be a spraying of champagne as the ‘problem’ is resolved for you. The trouble is that it is the high performers and key contributors that often decide to head for pastures new. Perhaps you pay below market rate, have been through one transformation too many or the manager doesn’t ‘get’ you. Either way, there is a significant cost to losing a key member of staff. First of all, their productivity may wane during the notice period. Secondly, there may be a loss of knowledge from a poor handover or no replacement to perform a handover. Thirdly, the new joiner usually comes with a recruitment fee, potentially as high as 35%. Finally, they will take a while to get up to speed and build up their knowledge.
Managers cause people to leave
In most cases, it comes down to a clash of personalities or a lack of training. Sure, there is the occasional narcissist, backstabber or brownnoser, which only expedites good people. A low performing manager, one with poor communication skills or one that tolerates poor performance can also influence a job search. There are many reasons for tension, such as interdepartmental clashes. Similarly, there are poorly designed roles and systems that fail to keep up with user demands. Even something as simple as someone refusing to take on extra responsibilities or work overtime can lead to a breakdown in the relationship. Some managers also delude themselves into believing that their team wants to become them. It is true that some will seek progression, but not all want your role or want to step up for more pressure and little extra reward.
We have previously talked about how only about 1 in 10 are fit for managing. Around 2 in 10 can be coached and trained. That leaves 7 in 10 who struggle to manage or lack leadership qualities. It is a large proportion and something that selection and promotion decisions seem to miss. Promoting a high performer may help their retention for a while, but the decision is often not based on their ability to manage. For a start, how many promotions or hires seek feedback from their team before promotion or after hiring to check on them? Sure, an employee engagement survey is one tool, but it often doesn’t focus on the direct manager. Similarly, depending upon the vindictiveness of the manager, will the employees dare to give honest feedback? Also, can the employees themselves be trusted to give honest and impartial feedback that is not self-serving?
End the retention nightmare
Firstly, over what time period do you expect to fix the problem? Secondly, are you prepared to spend money to boost retention? Thirdly, do you believe in the manager’s influence on staff retention? We tend to think of staff retention like a dam. Sure, if you maintain the structure and it is well-designed, it will stand the test of time, holding back millions of gallons of water. If it has sprung a leak, it may be possible to repair it. If it has sprung several leaks, is there a problem with the construction and can we remedy it? However, if it continuously springs leaks then it needs a continuous cycle of repairs. As a result, that drains you of the budget to build a new one, as well as time lost in resolving constant issues. Ultimately, when lots of water starts escaping, the dam tends to collapse.
An occasional leaver may not be a large problem. When a few of your key people go together, projects and important processes can go off the rails. Furthermore, when a number of the most talented walk away, especially if identified by others as such, it can destabilise the structure. To end the staff retention nightmare, we suggest three things:
- Make employee experience one of your strategic objectives
- Modify your hiring, promotion and feedback channels to identify good managers
- Match manager skills to the required skills then train them and assess them
It comes back to strategic planning
Poor staff retention costs money, knowledge and lost time, all of which are valuable to a business. As your talent flies the coop, poor managers get missed and capabilities fall short, your ability to deliver on your strategic goals suffers. Businesses need to align their resources – including people, processes, partners and systems – to their strategic goals. If you neglect your people, which also includes the behaviours and abilities of your managers, one dimension suffers. When talent and key contributors leave, that can affect the other dimensions with knowledge lost on processes, on systems and on how partners operate. Think Beyond supports businesses with strategic planning exercises, either facilitating or enabling research, opportunities and change.
Finally, why not check out our tips for a successful 2024.