Why companies are still overlooking the warning signs: The role of managers in employee turnover

Keywords: turnover, managers, engagementsurveys, peopleanalytics, corporateculture

Date: 15 August 2024, WorkLife Digital

Employee engagement and retention remains one of the most critical challenges organisations face. Despite ongoing efforts to improve workplace satisfaction, the issue of high employee turnover persists. One significant, yet often overlooked, factor that continues to drive employees out the door: their managers. While the adage "people leave managers, not companies" is widely recognised, recent data suggests that businesses still fail to fully grasp or address this issue before it's too late.

Managers: The unaddressed culprit in employee turnover

Studies consistently highlight the impact of management on employee satisfaction and retention. Gallup's 2023 "State of the Global Workplace" report found that nearly 48% of employees had considered leaving their jobs because of their managers in the past year. Additionally, the Work Institute’s 2023 Retention Report revealed that 26% of employees cited managerial behavior and leadership style as the primary reasons for their departure. These figures illustrate a clear and persistent trend: managers play a pivotal role in whether employees stay or go.

However, despite this well-known risk, many organisations fail to identify and address managerial issues in time to prevent turnover. One key reason is that performance reviews, the standard tool for assessing workplace dynamics, typically involve only the manager and their direct reports. In these reviews, the business often receives feedback solely from the manager’s perspective, potentially missing critical insights from employees who may be dissatisfied or disengaged. As a result, warning signs of poor management that could lead to turnover are frequently overlooked.

The disconnect in understanding employee wellbeing

Further complicating the issue is the disparity in perceptions between HR leaders and employees. According to the latest MHR UK study, 86% of employees would leave a job that doesn't prioritise their wellbeing. This statistic underscores a growing demand for workplaces where employee wellbeing is respected and supported. Yet, 83% of HR managers in the same study believe that stress is the primary driver of staff turnover, which suggests either a misunderstanding of the true root causes of turnover or an implicit acknowledgment that managerial practices are indeed a source of stress.

If the old adage holds true—that employees leave because of their managers—then it stands to reason that the stress cited by HR leaders may very well be linked to management practices. However, this connection is often missed or not fully explored, leading to ineffective interventions and continued turnover.

Engagement surveys: The flawed tool for gauging employee sentiment

Many organisations rely on engagement surveys to gauge employee sentiment and identify potential issues within the workplace. However, these surveys frequently fail to capture the most critical insights due to a fundamental flaw: lack of anonymity. The MHR study found that 40% of organisations do not anonymise their engagement surveys, leading to a culture of fear and reticence among employees. When employees worry about potential reprisals for their honesty, they are unlikely to provide authentic feedback. As a result, the data collected from these surveys is not just unhelpful—it is often misleading.

For HR departments, this presents a significant problem. According to MHR, the average HR team spends seven days analysing survey results. Without true anonymity, this time-consuming process may be entirely wasted, as the analysis is based on data that does not accurately reflect employee sentiments. Even in companies that do anonymise their surveys, widespread scepticism among employees about the authenticity of this anonymity persists, further diminishing the value of the feedback collected.

The solution: External people analytics providers

To address these challenges, organisations could look beyond traditional internal methods and consider the benefits of utilising external people analytics providers that go beyond engagement. These offer a crucial advantage: they ensure complete anonymity, which helps alleviate employee fears and encourages honest feedback. By outsourcing the time-consuming task of data analysis to external experts, companies can receive well-organised, insightful reports on the risks to both mental wellbeing and engagement, that break down data by relevant demographic splits and come with tailored strategic recommendations for action.

The value of external analytics goes beyond just data collection and analysis. These providers can help organisations identify early indicators of managerial issues that may be contributing to turnover. By catching these red flags before they escalate, companies can implement targeted initiatives to improve managerial conduct and, in turn, reduce employee turnover.

Ultimately, this approach not only improves employee satisfaction but also strengthens the overall health and resilience of the organisation.

WorkLife Digital is a global mental-wellbeing consultancy driven by the mission to improve the sustainability of businesses. Our psychological wellbeing tool, Worklife Quotient (WL-Q), is modelled on cutting-edge scientific research and provides organisation-wide measurement and intelligence on the mental wellbeing levels and psychological resilience of staff. WL-Q also assesses the impact of organisational practices (i.e. people and culture, leadership styles, organisational purpose and values, social impact) that have a direct influence on staff wellbeing and provides strategic recommendations on addressing risks and promoting strengths.

For more information, get in touch at lisa@worklife.digital

REFERENCES

* https://www.gallup.com/workplace/349484/state-of-the-global-workplace.aspx

** https://info.workinstitute.com/2023-retention-report

*** https://mhrglobal.com/uk/en/knowledge-hub/hr/employee-experience-download