How Better Management Leads to Reduced Turnover and Increased Engagement

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According to a Gallup study, a full fifty percent of adults have left a job because they didn’t like their boss! There are lots of reasons employees don’t get along with their bosses. Egos (on both sides), stress, office politics, miscommunications, so many reasons. But you know what else is quite common? Bosses not setting clear goals and providing sound guidance, a problem that’s perhaps a bit easier to address, and most likely to directly boost the bottom line.

Anyways, fifty percent! Let that sink in. Better yet, go take a walk around the office, or peek over your cubicle, or out that office door. Now imagine if half of your staff and coworkers just got up and walked out. That might sound a bit dramatic, but as the future comes to pass, it will likely happen (where do you think this data came from?!)

And every time someone leaves, your company is going to have to post up a help wanted ad. Then you’re going to have to sift through countless applications, read resumes, and hopefully home in a handful of candidates that are actually qualified for the position. Numerous interviews later, you might settle on a good candidate, and if you’re lucky they’ll accept the job without much fuss. Then -with a bit more luck- months on down the road you’ll have a fully trained candidate performing at the same level as the person who left. Of course, by the time that happens someone else will have already left!

 

Employee Churn is a Huge Cost
Employee churn is a huge cost for companies. Just hiring and training employees is immensely expensive. Replacing a worker who earns $60,000 a year can cost as much as $30,000 to $45,000. And remember, this is just the hiring and training costs. Businesses will actually lose a lot more money as productivity drops.

As for total costs, the actual numbers are highly debated, and variable by industry and position, but one study found that losing an employee can cost a business between 16% to 213% of an employee’s annual wage. Generally speaking, low skilled workers will trend near the bottom of this wide scale, while higher skilled workers will cost near the top. Makes sense.

These numbers might seem high, but on-boarding and training costs can add up quickly. So too can the costs of advertising job positions and conducting interviews. Costs get even higher if a recruiter is used, and then you have to worry about employee fit, morale, office politics, and everything else. Many of these costs can rack up before a new employee even sets foot into your workplace.

 

Providing Guidance Can Go a Long Way
This article isn't intended to be the bearer of bad news. Just the opposite, we wanted to share some solutions for a very serious problem. One of the insights the Gallup study uncovered is that many employees want guidance. This doesn’t mean micromanagement, mind you, but support and clear expectations.

Only 12% of employees reported that their managers provided guidance and set clear expectations. This 12% was also far more likely to be happier at work, and thus less likely to leave. Managers need to take note of this, and objectively examine whether or not they are providing clear goals and sound guidance. The fact that only 12% of employees are reporting such is flat out abysmal and should be deemed unacceptable.

One important aspect of being supportive is to also be approachable. 54% of actively engaged employees reported that they felt like they could ask their bosses any type of question. Bosses need to remember that they have often been around for a long time and that what might seem like common sense to them, won’t be so obvious for employees.

Engagement, an issue we touched upon in another blog post, can be increased simply by holding regular meetings. People love to bemoan meetings, but when managers hold regular meetings with the employees, about the employees, employees are three times more likely to be engaged!

 

Conclusion: Be Proactive, and Make Employee Satisfaction & Engagement a Priority

Of course, managers shouldn’t have to bear the entire burden of keeping employees happy and on staff. Organizations as a whole can take steps to engage their employees. Happy hours, staff development programs, skills training, company retreats, monetary bonuses, the options are nearly limitless. What is important is being proactive, and addressing employee satisfaction and engagement directly.

At the same time, managers have to be proactive. Provide guidance. Set clear, reasonable goals. Be open and supportive of your employees. A bit of competent and friendly management can go a long way towards creating a supportive, constructive, and ultimately productive working environment.