Nearly 46 percent of workers expressed a desire to leave their jobs in 2024, according to a LinkedIn study. Keeping good employees is becoming increasingly difficult for employers, and retention challenges remain significant.
There are many reasons why employees leave their companies for new opportunities. Historically, employees tend to quit at higher rates during periods of economic growth. However, following the pandemic-induced recession in 2020, the labor market has experienced fluctuations driven by various factors, including inflation and shifts in workforce dynamics. In 2023 alone, over 44 million employees voluntarily quit their jobs, highlighting the ongoing “Great Resignation.”
Job openings continue to remain high, putting pressure on businesses to fill positions with qualified employees. Although new talent is entering the workforce, much of the movement is driven by employees switching jobs for better opportunities, making it increasingly challenging for companies to secure high-performing talent.
It’s common business knowledge that it’s much more expensive to hire new employees than retain them. Yet, as illustrated above, your employees are constantly being sought after, emailed with job offers, marketed to for the “it’s greener on the other side” job. And why is it that so many of them give in?
The cold, hard truth is that those employees are not quitting their jobs; they are quitting their managers.
In survey after survey, poor management rises to the top of the list as the reason employees quit. Nearly 82 percent of workers said they would quit their job because of poor management according to GoodHire study.
Reasons why someone would quit their manager include:
- Lack of management training
- Underdeveloped interpersonal skills
- Poor organizational alignment
Lack of Manager Training
High-performing employees are often promoted from individual contributor to manager without any support to develop the new skills they will need in their new role. This is a classic example of the management theory known as the Peter Principle, which describes individuals being promoted beyond their highest level of competence. As the new manager who is unprepared assumes their new role, their team quickly becomes disengaged and the likelihood of turnover increases.
For most businesses, wages are the largest expense on their financial statements besides cost of goods sold. Yet, they don’t put the resources toward developing their managers who lead this critical resource. Also, the estimated cost of employee turnover is a whopping 50-60% of the departing employee’s salary. If this isn’t a reason to create management training and development programs – what is? If it is so important then why don’t companies do it?
Often, it is just assumed that managers will intuitively know how to be a manager. Sometimes a company gets lucky, but more often than not, the managers flounder around trying their own style and borrowing from how they liked to be managed. If they like to work independently with little oversight, then most likely this is how they will manage their team. This, by definition, is not management. Managers need to be developed to learn the basic management skills necessary to direct and motivate employees to meet and exceed their expected roles and duties.
Underdeveloped Interpersonal Skills
The ability to manage a team takes more than knowing the technical aspects of what needs to get done but the knowledge to know how to work with a vast variety of personalities.
Developing strong emotional intelligence is a key skill managers need to develop. Without it, managers may get the results they need, but in the process, not develop the relationships they need to get long term results. The ability to lead requires a strong understanding of yourself, those you interact with, and the overall understanding of your surroundings.
Having a strong understanding of your own emotions, and possessing self-awareness, are foundational to becoming a good manager. There are many personality assessment tools that help people understand their personalities and give them insight into their tendencies, blind spots, and personal style. Having this knowledge is critical for managers as they will have a better sense of how they need to control their behavior to become a better manager. Yet surprisingly, less than 22% of employers use personality assessments. Thus, it isn’t surprising that managers are getting blamed for high turnover when there are tools going unused that could help them achieve a better understanding of themselves and their team.
Download our free Employee Emotional Intelligence Scorecard here.
The ability to develop strong relationships is critical in management. Good managers focus energy on their team members and gain an understanding of how they think, how they feel, what drives and motivates them, how they work with others and how they work on their own. This allows the manager to help direct these individuals – not just to get the job done – but to help them grow and excel in their roles. Conducting one-on-one meetings is one of the best ways for managers to improve employee engagement and satisfaction, thus reducing turnover. According to a recent Gallup poll, managers account for 70% of the variance in employee engagement and is directly correlated with employee turnover.
By developing a strong understanding of their broader surroundings, managers are better prepared to lead their teams as they understand how they interact with other departments, employees, customers, and vendors. This is where the magic is, as managers are able to see opportunities to grow their teams and the business.
Poor Organizational Alignment
What does good look like around here? All too often, businesses write the obligatory job description but otherwise don’t provide their managers and employees with more clearly-defined goals and objectives for their positions in the company. It’s human nature that assumptions are made when there is ambiguity. Thus, if an employee isn’t clear about their role, they will make assumptions about what they are supposed to do and what good looks like. Yet, before managers provide goals and objectives, they must first understand the overall organization’s values, goals, and objectives, and then align them both. Unfortunately, not all businesses take the time to create these, creating additional ambiguity for both the managers and teams.
An organizational best practice is to create annual and quarterly goals for the entire company and cascade them down throughout the company to ensure proper organizational alignment. Managers can then use their one-on-one meetings to increase employee engagement and alignment with the company.
The bottom line is that better managers = more engaged employees = decreased turnover and better overall business success.
Written by: Brent R. Tilson, owner and CEO of Tilson HR, author of ForbesBook Go Slow to Grow Fast.
