The Cost of a Bad Boss

40% of workers leave because of a bad boss, according to an FSU study – Why?

Failure to keep promises, blaming employees for leadership mistakes, lack of credit, disparaging remarks, silent treatment, poor or no decision making….the list goes on and on.

The impact of poor leadership is not simply emotional, it’s financial. Various studies on the subject show that up to 32% of voluntary turnover can be avoided with better leadership. Calculate how much it costs to lose one competent, productive, contributing employee and then multiply that by having to replace 30% of your workforce. In case you want some help with the maths on this, estimates run as high as about 150% of their salary. Lower for more junior roles, but it all adds up as you can see.

Of course, it’s not simply the cost of rehiring, not that it is, in itself, simple. What about the impact on productivity, customer relationships, revenue growth, lost training costs, lost knowledge, market capitalization?

One organization I read about felt that poor managerial and leadership practices cost them around 15% in sales growth annually.

Gallup estimates that at any given time up to 20% of the workforce is disengaged due to poor leadership and a bad boss. Many act out their discontent in counterproductive ways, negatively influencing their co-workers, missing days on the job, and driving customers away through poor service.

There is an ongoing concern you need to understand if you do not take a good look at the capability of your managers and leaders. Left to their own devices, they will then appoint their own version of what they feel to be good managers. The result is your C grade manager, then makes a D grade appointment, and eventually they appoint their own E grade manager and so on.

The good news is that all of is this can be avoided. Look at leadership capability, hiring and promotional activity against numbers like sales, productivity or turnover. Run an employment engagement survey. If you are close to the business the clues will already be there. If you are not, then get closer and soon.

There is the old adage that people leave managers, not companies. While that may be true, ultimately it is the company they walk away from.

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About the Author:

William is an expert HR/ training professional with over 20 years in implementing best practices by developing, managing and leading a wide range of HR, learning and development strategies while achieving success in terms of employee performance, productivity, process optimisation and profitability across Middle East and Asia as well as with American and European Corporations.