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Reducing Turnover Should Be Management’s Highest Priority

Mar 4, 2012

Posted by

Greg Smith

Greg shows businesses how to identify, hire the right people and accelerate individual and organizational performance.  He helps businesses transform themselves into exceptional places t Read more


When agents or employees quit, many times they don’t quit the company -- they quit the management.  I validated this fact in a survey which showed in 46 percent of the cases, the main reason people quit their firm was because of their first-line supervisor or manager.

When you consider how difficult and expensive it is to find and train good people, losing 46 percent unnecessarily is a painful statistic.  To make matters worse, businesses are at fault when they do nothing about it and have no one else to blame but themselves.

In my mind, it is an honor, as well as an important responsibility, to become an office  manager or sales manager.  When I use the word “manager,” I am not necessarily referring to a job title, but talking about the “role” of managing people -- especially sales people.

A manager’s job is not easy.  The demands are difficult.  Many brokers are doing the jobs of two or more people.  Employees expect more and some become plain difficult to work with.  Many firms do a poor job selecting and training managers.  It goes without saying those who do a good job selecting and developing their managers will enjoy higher productivity and lower turnover.  However, most often the employers are at fault for not giving managers the tools, training, and support to succeed.

Spaghetti Management Syndrome

Just because a person shows potential or has a degree, does not mean they will be good at managing others.  Many are skilled technicians, but unfortunately are clueless on the art and science of managing people.  Some businesses practice what I call “spaghetti management.”  They pick a bunch of people, promote them to managers, then throw them on a wall like spaghetti and see who sticks.  This is not the fault of the individual manager, but the employer’s.  Without training and support most new managers will fail.  This is one of the main reasons people today run like the plague to avoid becoming supervisors and managers.  Sure, some managers are tyrants and no amount of training is going to change them.  But at least good businesses recognize their mistakes and provide additional training, or find the errant manager a job somewhere else.

Good businesses place people skills as a vital part of their performance management system.  For example, Synovus Financial, a multi-billion dollar and multi-financial services company, has been listed in the “Top 100 Best Places to Work” for several years.  They have a commandment that says, “A manager’s most important role is to serve, grow, and inspire his or her people -- with no exception.”  This requirement had a positive impact on the bottom line.  Not only did their employee turnover rate drop, but also their market capitalization grew from $2.2 billion to $8 billion in four years.

Good Leaders Show They Care

I went into the Army after college to learn how to be a good leader.  My first boss was a great mentor and teacher.  He was an experienced veteran and a former Special Forces medic in Vietnam.  He was the type of person who always put the needs of others before his own interests.  As the lowest ranking member of my battalion, I had to pull duty on the worst day of the year -- New Years Eve.  I worked all day and then I was up all night.  You can imagine what mischief 500 soldiers can get in.  Finally, Saturday morning arrived and I could not wait to go home.  The phone rang;  it was Joe, my boss.  He wanted to know if I had made any plans for lunch.  He and his wife had prepared something and he wanted to bring it over to me.  Today, I don’t remember what the food was, but it was a meal I will never forget.  That one small act of kindness crystallized in my mind what leadership was about -- caring for those you lead.  That act taught me more about leadership than all the degrees and diplomas hanging on my wall.

Here are a few suggestions to consider in your management development program:

•  Establish key competencies your managers should possess and demonstrate.

•  Have company executives share their expectations with their managers.

•  Consider using a 360-degree evaluation on top management.

•  Hold managers accountable and responsible for retention.

•  Have HR train managers on reward and recognition.

•  Provide the support and tools to help managers do their job well.

•  Start measuring turnover and apply the cost to the bottom line.

•  Conduct post exit interviews to discover the real reason employees quit.

•  Complete an individual retention profile on every employee.

•  Conduct an employee satisfaction survey at least once a year.

In Sum

As I said at the outset, when you consider how difficult and expensive it is to find, train and retain good people, losing 46 percent unnecessarily is a painful statistic.  You can dramatically reduce that percentage if you incorporate the above in your management development program.