Written by Kathleen O'Donnell, Bonusly
We’ve all heard the saying “People don’t leave companies—they leave managers” over and over and over again. It’s a cliche because it’s mostly true—and provides an easy way to talk about how important managers are to a company’s culture and an employee’s experience.
But that phrase also understates the importance of good managers to a company’s bottom line because of their impact on retention and engagement. In fact, there’s a wealth of new research showing what a critical role effective management plays—and what’s also getting in their way. Let’s dig in.
A good manager delivers real returns
Managers are a vital link in your organization; holding onto the good ones improves your organization. But managers have an even greater role in organizational turnover, engagement, and performance than we knew—until now.
Managers boost retention rates
New research from Bonusly, in partnership with Lighthouse, shows that having a supportive manager more than doubles employee retention. Having a manager who is just going through the motions, on the other hand, drops the retention rate of employees by more than half. Even having a manager who tries, but is just too busy to be fully supportive, hurts retention rates by more than 25%.
Imagine if you could cut your turnover rate in half—how much money would that save your organization? And how much better would employee morale be as well? Since many companies are currently struggling with employee retention as more than half of employees say they intend to leave their current jobs, this new revelation could help drive a lot of improvement.
Managers drive employee engagement
Managers also have an outsized impact on team and employee engagement. Recent research from Gallup found that a stunning 70% of the variance in team engagement is determined solely by the team’s manager. That’s right: nothing else has as significant of an impact on employee engagement levels as their manager.
With the high ROI of employee engagement on your company’s bottom line (and the estimated $7.8 trillion cost of lost productivity due to disengaged employees), just one manager’s impact can make a huge difference in your company’s productivity and profit.
Organizations that want to increase employee engagement (which should be… all of them 🙃) must focus on supporting manager engagement to get the best results.
Managers create high-performing cultures
Managers are also the secret ingredient in high-performing cultures. By enabling their team’s performance (not just managing it) and providing coaching, motivation, and feedback, they drive high levels of performance that even the best high-level leadership can’t on their own.
What gets in the way of enabling effective management?
The data is clear: managers are the key to higher performance and a stronger bottom line. But managers today are struggling: more than half are burned out, according to Microsoft research, and managers facing exhaustion are 1.8 times more likely to leave their company.
Several factors contribute to this people management crisis. One major issue is the overwhelming responsibilities managers are expected to handle. From overseeing team performance and development to navigating complex organizational dynamics, the sheer breadth of their roles can lead to significant stress and burnout.
Additionally, many managers need more training and resources to lead their teams effectively. Without proper guidance and support, they may feel ill-equipped to handle the challenges that arise, leading to frustration and decreased productivity. This gap in training is often compounded by insufficient feedback and recognition, leaving managers feeling undervalued and unsupported.
Another significant barrier is the constant pressure to deliver results in a fast-paced, ever-changing business environment. Managers are frequently caught between meeting high expectations and managing their teams' needs, creating an impossible tug-of-war that can be both mentally and physically exhausting.
These obstacles showcase the urgent need for organizations to re-evaluate and enhance their support systems for managers, ensuring they are equipped to lead their teams successfully.
Without further ado ... here’s what you should be doing to better serve and support your managers.
About Bonusly
Bonusly is the engine that powers employee engagement, recognition and rewards, and performance enablement. We do this through our performance enablement solution that rewards employee milestones, builds meaningful relationships through peer-to-peer recognition, enables consistent feedback, and equips managers with tools and insights—to unlock your team's full potential.
About CultureCon
CultureCon, a Certified B Corporation®, is on a mission to inspire positive change around organizational culture. Through large conferences, online courses, consulting services, and certification programs, we deliver experiences that provide practical tools and motivation for our customers to become cultural change agents within their organizations. Our customers include business owners, CxOs, HR leaders, senior management, individual contributors, and anyone who wants to build more uplifting, inspiring, and healthy workplaces.
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