The U.S. Dept. of Labor Bureau of Labor Statistics (BLS) historical tracking of job quit rates indicates a steady rise since 2010. Employee turnover is costly because of the costs of recruitment and training, as well as the impact on productivity. So there is a real incentive to reduce turnover, increase retention.
The Gallup Inc. “State of the American Workplace” employee engagement study released in February 2017 concluded that the majority of employees are not engaged and that employee engagement has barely improved over the past several years.
Wikipedia defines an engaged employee as “one who is fully absorbed by and enthusiastic about their work and so takes positive action to further the organization’s reputation and interests.” It also is an employee who will be less likely to quit their employment.
According to Gallup CEO Jim Clifton, employee turnover can be boiled down to this:
When you name the wrong person manager, nothing fixes that bad decision. Not compensation, not benefits—nothing.
There has been a great deal written about the best qualities for a manager and how to choose and develop management talent. But in the case of small businesses and organizations, the manager is often the owner or Executive Director. In those cases, who monitors the performance of that individual? If there is a Board of Directors, they would fill this role, if they are engaged to do so. Otherwise, it is up to the business leader to take it upon themselves to assess their effectiveness. I am guessing that not many do so.
It is beyond the scope of this blog to dive into the current thinking on leadership development and traits of a good manager. But I think it is crucial to look hard at management’s effect on turnover in your business/organization. That should be the starting point. As discussed in a previous blog, Maslow’s higher level needs are not satisfied with additional pay, benefits and other security enhancements; self-esteem and self-actualization needs (i.e. higher level needs) can be satisfied by and are dependent on a solid manager/subordinate relationship.