Ciara Ungar, Contributor
Founders and business leaders often believe that employee retention is about creating connections and building the right compensation packages.
While getting people more involved in the company creates more active engagement and compensation packages are, without a doubt, one of the top reasons people stay at companies, managers play just as important a role in creating an environment and experience that employees want to stay at.
Why employees choose to stay at companies has less to do with compensation packages and more to do with their relationship and experience with their manager.
Managers affect employee retention by shaping the employee experience and building engagement. An effective manager understands the role they play in impacting employee retention, and they seek opportunities to build strong foundations that satisfy internal drivers, not just external factors.
Creating healthy employee retention that contributes to the sustainable growth of the business and its teams requires an examination of four key areas that impact the day-to-day experience of your employees.
In this article, I examine those four areas in which managers impact an employee’s decision to stay at a company and how to hone in on building strong foundations for employee retention.
Rethinking Employee Retention
Every great article that discusses the impact of managers on employee retention begins with the same reference: “Employees don’t leave companies, they leave bad managers.” At the risk of sounding cliché, there’s unfortunately a lot of truth to the mantra.
If you believe a solid employee engagement plan will fix a struggling retention rate, I encourage you to reconsider before spending your time and money on tactics that don’t advance you very far – engagement is just one piece of the puzzle.
Studies show anywhere from 50% to 75% of employees leave because of their manager or reasons their manager has influence over. What’s worse is, this isn’t new.
Today, many senior executives hear these statistics and attribute them to a new generation with a lackluster attitude toward work, so they shrug off the data and move forward with band-aid solutions.
If you’re serious about your growth and sustainability, let it resonate that these types of data points have been occurring for more than 20 years. The sentiment is not new and neither is the approach to resolving it.
Generally, many business leaders are turning to solutions and approaches that have been leveraged for more than 60 years, despite a changing workforce and environment. Those solutions didn’t work 20 years ago, and they’re certainly not working now.
What we’re experiencing now is mere accountability after decades of burnout. Burnout with a source that can more often than not be traced back to managers.
So, if we know workers spanning generations have been leaving jobs overwhelmingly because of their managers, it would benefit us to stop looking to outside sources and solutions to “fix” the issue quickly and begin looking within for answers to the most important question we should be asking if we really want to improve retention:
“How do managers affect employee retention, for better or for worse?”
Assumptions About Employee Retention
If we’re going to understand how managers impact retention, we must understand the full context of what impacts retention.
There are many frameworks around “people, performance, pay” or similar that give us a comprehensive lens for understanding the activities that impact employee retention, many of which focus on external factors. These types of external factors lead companies to assess retention as good or bad, simply by looking at the data.
Said another way, Harvard Business Review cites external factors like labor force, financial responsibilities, and family and friendship ties as certainly impacting whether an employee is willing to leave their job despite it being unsatisfying or miserable – these are all reasons they feel they have to stay.
A manager, however, is an internal factor within the company that can influence whether an employee wants to stay. A low turnover rate does not necessarily mean high retention from the perspective of an employee wanting to stay, and overlooking this fact can be detrimental to your long-term growth.
I would posit the sole difference between healthy retention and mere retention by the numbers is the difference between employees wanting to stay rather than feeling they have no other option.
What research leads to year after year is something deeper and more meaningful, all of which can point back to the direct impact a manager has. External factors focus too much on employee satisfaction as a direct line to retention, ignoring the complexities of human emotion and psychology.
Alignment, connection, motivation, and fulfillment all drive healthy retention, and managers have the ability to directly impact these factors positively or negatively.
How Managers Impact Employee Retention
The good news is managers have the ability to positively affect employees and their experience. To maintain healthy employee retention wherein people want to stay, effective management styles, relationships, trust, and communication are essential.
Even employees who stay with a company for 10+ years can experience a lack of satisfaction with, trust in, and connection to a company, choosing only to stay for external reasons.
Before we dive in, I’ll offer this: What makes great managers (and companies) exceptional is the willingness to go beyond the surface.
If you’re looking for surface-level quick fixes, this article isn’t for you. If you’re looking for a deeper understanding and beneath-the-surface answers of the managerial impact on employee retention, I welcome you to read on.
The latter is ultimately what builds healthy retention and growth. There are several areas of internal impact that leaders should focus on evaluating and strengthening in order to build sustainable growth and a culture that encourages healthy retention:
Management Style
Management style is arguably one of the most important ways managers impact employee retention. We often think of management style as whether a manager is a micromanager (or somewhere within that realm), but management style has many legs to it.
If we look at some of the most cited reasons for burnout, overwhelm, and dissatisfaction, we can see that controlling workload, being recognized, personal and professional development opportunities, and follow-through directly fall under the purview of managers.
Managers and their ability to manage these aspects for their employees have a massive impact on the overall wellness of an employee. Your management style can fall within some well-known traditional buckets, but how you adapt and show up individually for each employee is more important in order to manage these day-to-day aspects.
But how?
Opportunity: If you’re not sure where to start, take a more participatory approach to managing. Knowing how to best manage workload and show recognition won’t reveal itself in a bubble.
If your teams are vying for the opportunity to share with you what they need, it’s likely you just need to open the door to let them in. Keep in mind, though, that change and impact start with you.
Your management style is a reflection of your values and how you view the dynamic of your team. If you haven’t addressed the deeper-rooted perspective and values you hold, then the changes you make to your management style likely won’t see lasting effects and will eventually wear off.
This also means not overlooking how you’re communicating your mission and bringing others into the story of working toward that mission. Employees feeling connected to a mission is critical to their fulfillment and desire to want to work for a manager or company.
The daily role of a manager is to clearly communicate that mission, ensure others understand that mission, and rally employees daily around working toward that mission. It also means filtering tasks and priorities through that mission to better manage the workload of employees.
Rather than simply churning tasks, the manager serves as the goalie for their employees, deciding which tasks and critical actions contribute to the mission, and which are simply fillers that suck time, energy, and focus out of employees.
Relationships
Relationships are at the heart of employee retention, but not just for the obvious reasons of “connection” that traditional employee engagement handbooks tell us to build. In any manager-employee dynamic, there are several relationship elements to understand and, consequently, ways to navigate and build upon them.
First, there’s ample research available that implies an employee’s relationship with their manager (and vice versa) is strongly akin to their relationship with their parents.
How you as a manager exert authority and demonstrate leadership and how an employee receives that authority and leadership are strongly tied to the relationship to authority you and they have held in the past, more specifically through formative childhood years.
Outside of the workplace, we accept that those experiences shape how we interact with a spouse or child, but less often do we consider the impact it has on how we relate to those in the office. Understanding this about ourselves and those we work with – and leaving room for it to be navigated – is fundamental to the positive relationships we can build.
Second, relationships between managers and employees communicate a lot without the need for words. More specifically, those on the outside of those relationships can easily feel discouraged and disconnected.
Without realizing it, managers often showcase favoritism or preference, particularly when it comes to longtime employees, from the perspective of outsiders. Managers may have longer-standing relationships with some employees or spend time with them outside of work, but often this contributes to a culture of exclusivity.
Even in the most innocent situation, what inadvertently ends up happening is cliques are formed and “outsiders” are less valued, not afforded as much understanding, or are removed from core conversations.
Opportunity: Patrick Bet-David says it best: “Smart compensation packages and incentive trips go only so far. When you touch people’s hearts, they will move mountains for you. And to touch their hearts, you have to take the time to understand them and know their deepest beliefs and desires.”
That is, instead of spending time focused on what you can give your employees (external motivations), focus more on building relationships that foster understanding and deeper motivation and alignment.
In Leadership Lessons from a Team Captain, I dedicate a whole chapter to this very idea of a 1:1 game of building relationships because of how profound and impactful it is to business growth and employee retention.
NBA Champion Kobe Bryant taught us a lot about the importance of relationships and success. His approach was to spend significant time with each teammate and get to know their motivators, back story, and communication styles so that he could build a foundation of trust and gain clarity on the best way to motivate them.
That’s why teammates over the course of his 20-year career cited him as an effective leader and teammate – not because he scored the most points, but because he elevated others by building strong relationships.
To best understand how to meet employees’ professional development goals, what workloads they can handle, and how they want to feel recognized, relationships have to be formed.
Communication
Communication is the interlacing of management styles and relationships. For both to work, effective communication is central.
Unfortunately, all too often a manager rises in the ranks without proper training on effective communication, which impacts everything from workload management, collaboration, recognition, decision-making, conflict management, and more.
Communication takes many forms and goes beyond just a verbal or written exchange. It also goes beyond the simple notion of interpersonal communication and understanding nonverbal and verbal cues in various contexts.
What a manager has the power to communicate simply by an action (or lack thereof) is why communication is such a critical component of employee retention.
Take recognition, for example. More often than not, managers assume a simple email, coffee mug, Starbucks gift card, or bottle of the finest wine shows appreciation for the hard work of their employees.
But, in the words of the 1964 hit by The Beatles, you “can’t buy me love.” Employees, much like a married couple, have love languages. The way employees feel appreciated may very well require a different mode of communication. Not everyone feels appreciated by receiving gifts.
The same is true for conflict resolution. While there are proven approaches to effectively resolving conflict employing the subtle art of negotiation and psychology, it comes down to knowing how your employees communicate and interact, and your ability to promote and, at times, facilitate that effective communication.
Opportunity: For managers, this means the art of effective communication is critical for the environment and culture to be one in which your employees feel understood, respected, welcome, and emotionally safe.
One of the best ways companies and managers can improve employee retention is by training managers (and employees) in communication.
Training can equip managers with effective strategies and techniques that are inclusive, mindful, and effective for creating influence, employing effective decision-making and managing conflict in a way that keeps employees feeling valued.
Trust
Ultimately, at the root of all of the above is trust. Without it, communication, relationships, and management styles will all fall flat.
If you’re a follower of my work, you know trust is the linchpin of effective business strategies I present to founders and business leaders. It’s at the heart of every exercise, article, book, and strategy I produce because I understand the profound impact it has on our ability to stay inspired and step into growth.
Science shows employees must feel psychologically safe in order to feel they can be creative, feel motivated by and aligned with the company mission, and to problem solve effectively with teammates.
Without a foundation of trust – a foundation of emotional safety – employees are simply surviving, activating their fight or flight mode and shutting off the creative and inspired side of their brain. Inevitably, this impacts how they relate to others, the quality of work produced, and, you guessed it, whether they want to stay with a company if given the opportunity to leave.
It’s a natural human response to protect oneself, so if employees don’t feel they can trust their manager, their innate response is “flight” to protect their well-being. Managers have the responsibility and direct ability to create teams of trust and trusting dynamics with their employees.
Opportunity: Trust is a two-way street – a give and take – but it’s also multi-dimensional. There are layers to trust that managers can build, and it takes time and intentionality. Each interaction is a demonstration of trust (or lack thereof).
Ask yourself:
Do you tolerate bad-mouthing?
How do you uphold transparency?
Do you walk the talk and do what you say you’re going to do?
Do you hold true to your word?
Trust goes beyond just whether employees can trust you as a manager. How you build and foster trust among your teams begins and ends with you as well. Consider the role you actively play in building trust in your teams.
Ciara Ungar is a New York City-based Author on Leadership, Certified Business & Leadership Coach & Consultant, an Award-Winning Strategist, and an International Speaker. She is also an Innovation Women Speaker, Instructor with Columbia University Immersion Programs, a Mass Challenge Advisor, a Startup Council, and Forbes Coaches Council member. She has a blended academic background with degrees and certifications in Communication, Psychology, Integrated Strategy, Entrepreneurship & Business Strategy, and Cultural Diversity from Purdue University, Georgetown University, and Wharton Business School. She applies her robust 16 years of professional expertise working with Fortune500 companies, high potential startups, top global agencies, and Angel/VC Investors to entrepreneurship, leadership development, business strategy, and professional growth. A disciple of “Start With Why,” her purpose is to guide others through transformative thinking as they build businesses, teams, and personal purpose that inspires change.
