Talent turnover isn’t simply about losing one person. It’s about losing a significant amount of knowledge and potential. In a study on workplace satisfaction, 75% of workers reported that their immediate boss was the most stressful part of their job. And that stress has a cost. While your best workers may be attracted to the company mission, a big reason they often leave is the manager.
The Financial Impact of Talent Turnover
Unfortunately, the cost of one person leaving can be substantial. According to Gallup research, replacing an employee can cost up to one half to double their salary. Plus, when one person leaves, it can trigger a domino effect leading to more departures. When multiple employees leave, studies have found a problem manager is often to blame and, in addition to the lost talent, employee performance drops across the board. From profit margin to customer service, turnover weakens a company’s brand and bottom line.
The Silent Killer: Turnover’s Effect on Morale & Company Culture
It’s common for employees to build relationships with their co-workers. When one person leaves, employee morale takes a hit. Instead of seeing their friend at work, an employee might need to cover that person’s work until someone new is hired. Losing a professional relationship and taking on more work compounds the negative effects on staff. And if management contributed to the voluntary exit, then that worker may be the next to give notice.
Unsurprisingly, negative experiences stick around, disrupting the harmony within the company. If the leadership isn’t effective, it can turn the workplace from a place where ideas thrive into an environment where everyone treads carefully. This downward spiral not only hurts productivity it also affects the happy workplace culture business owners want.
The Good News: Managers Are Also Part of the Solution
Leadership isn’t instinctive; it’s a skill that needs to be developed. The same research that found that turnover negatively affected workplace performance also found that good leadership could minimize these effects. When business owners invest in training their leaders, managers gain the necessary people and performance skills that improve work culture.
Management Training
Investment can take many forms, such as leadership retreats, one-on-one coaching sessions, or pairing managers with mentors within the company. The goal is to cultivate a group of bosses who truly understand their teams. According to Wharton Business School, professional development empowers leaders with new skills and knowledge, which in turn provides a better skilled workforce, increases workplace satisfaction, and decreases turnover.
Recognizing When It’s Not Working
Sometimes, a leader and their position just don’t fit. Making difficult decisions about leadership is hard but necessary. Pay attention to more turnover from the same department, which will often point you in the direction of the problem. Delaying could mean your business is stuck instead of moving forward.
The Bottom Line
Leaders often mention their teams when discussing business success, but managers are often left to navigate alone. The reality is that managers are the stabilizing force that keeps the team in good shape.
If your business has been experiencing more turnover, experts advise looking beyond more money or benefits. Look closely at your team culture, especially at those in leadership positions. Often, that’s where you’ll find the problems. And that’s where you can fix them—with effective leadership.
Invest in your management relationships. In business, retention and progress go hand in hand. You’ve worked hard to build your business. Don’t let a misstep from the top send your best employees looking for new opportunities.
—
The Chamber of Business and Industry of Centre County is a private non-profit organization that aims to support the growth and development of local businesses and our regional economy. We strive to create content that not only educates but also fosters a sense of connection and collaboration among our readers. Join us as we explore topics such as economic development, networking opportunities, upcoming events, and success stories from our vibrant community. Our resources provide insights, advice, and news that are relevant to business owners, entrepreneurs, and community members alike. The Chamber has been granted license to publish this content provided by Chamber Today, a service of ChamberThink Strategies LLC.