The Manager Employee Retention Myth

The Manager Employee Retention Myth about Managers’ Importance
We’ve all heard it – the claim that disengaged employees leave managers, not organizations.  But it turns out, this long-held conviction originally started by Gallup is only partially true.  Our Best Places to Work research points to two other factors that have a greater influence on employees’ leaving than the influence of poor managers.  Yes, managers are important to an employee’s engagement, but managers are not the primary reason people leave their companies.

Why Employee Engagement Matters
Let’s start with why employee engagement is important to your people and your business.  The costs of disengaged employees and unwanted attrition are well understood. According to four recent studies, these statistics highlight the impact of lower employee engagement and high turnover:

• 12% lower profits
• 19% lower operating income
• 28% lower earnings per share

While higher employee engagement scores correlate to:

• 18% greater productivity
• 12% higher customer satisfaction
• 51% less voluntary turnover

If People don’t Leave Managers, What Really Matters?
While managers and management practices matter to a certain degree, our employee engagement survey data from over 500,000 employees per year over the last five years tells us that company leadership and opportunities for development matter more.  Certainly managers can impact an employee’s perspective of both company leadership and career development opportunities, but both strongly correlate to employee engagement and retention regardless of their manager.

The Importance of Company Leadership
Our data shows that employees head for the exit in “bad” companies whether or not they have good or bad managers.  But in “good” companies, the quality of management had little influence over an employee’s decision to leave.  Overall, it is the quality of the leadership that mattered most.  “Bad” leadership was twice as often the reason for employee turnover as management or pay.

The Importance of Career Growth and Development Opportunities
Even greater than leadership on the level of employee commitment was the opportunity for career development.  Employees care about their chances to progress in their jobs through relevant and meaningful training, mentoring, coaching, and more challenging job assignments.

What You Can Do to Increase Engagement and Retention
Every organization is different.  There is no better way to assess what your employees, especially your high performers in key roles, value most in their work than asking them.  Learn about what would cause employees to look elsewhere for a job and identify specifically what matters most in terms of engaging and retaining your top talent.

Done right, you will improve levels of employee advocacy, discretionary effort and retention by creating a healthy work environment.

The Bottom Line
Like so many misconstrued areas of people and culture, good data can help you avoid costly errors in addressing both engagement and retention issues. While good management practices are required for good business and people results, good company leadership and career development opportunities rank at the top for engaging and retaining top talent.

To learn more about how to engage and retain your top talent, download The Only 16-Step Employee Retention Strategy You Need