People Leave Managers, Not Companies: How To Increase Employee Retention
by: Thomas McKee

The cost of employee turnover is from 40--100% of an employee’s annual salary, when you consider lost productivity, recruiting costs, training costs, reduced efficiency in transition and time.

Employee attrition is running wild in today’s tight labor market; however, the companies that keep their employees have found that what matters most is not the pay, benefits, or perks, but the quality of the relationship between employees and their direct supervisors. The bottom line is that people leave managers, not companies.

Gift One: Control and Ownership

Ford Motor Company revolutionized the assembly line in the Edison , New Jersey plant when they made a gutsy move and gave the assembly line employees a button they could push to stop the line. And people did push the buttons. To be precise, they shut the facility down 20-30 times a day, but each shutdown was only about 10 seconds. Quality improved as employees took ownership of the production and the number of cars requiring rework after they had come off the line fell by 97%. The backlog of union grievances in the facility plummeted from an average of well over 200 to an average of less than 12. Tom Peters, in A Passion for Excellence, claims that the change in attitudes was as extreme as the numbers. One old pro on-the-line commented, "It’s like they opened the window and we can breathe." Another described the foremen under the new team-based approach, "They’re no longer policemen, but advisers."

Gift Two: The Value of Recognition

Marcus Buckingham and Curt Coffman, from the Gallup Organization, interviewed more than 1 million workers with 12 questions such as . . .

• In the last seven days, have I received recognition or praise for doing good work?
• Does the mission/purpose of my company make me feel my job is important?
• Does my supervisor, or someone at work, seem to care aboutme as a person?

The results of their research, and all 12 questions can be found in their book, First, Break All the Rules: What the World’s Greatest Managers Do Differently--Simon & Schuster, 1999. One of their research projects was 300 Best Buy stores. In the stores in which the employees answered these questions positively, they retained 1000 more employees.

Gift Three: Trust Your Crew

When Captain Michael Abrashoff took command of the USS Benfold the retention rate in the Navy was 18%. In two years it climbed to over 99%. How did he change the culture on that ship? Michael says, "Soon after arriving at this command I realized that the young folk on this ship are smart and talented. And I realized that my job was to listen aggressively—to pick up all the ideas that they had for improving how we operate. The most important thing a captain can do is to see the ship from the eyes of the crew."

Gift Four: Feedback

Have you ever coached little league or soccer? When do you give feedback? Do you wait for the award banquet to tell people how they did, or how they could improve or their value to the team? I hope not. Yet managers often wait until performance review time to give feedback.

Some years ago my secretary, Lori, quit her previous job to stay at home with her young children. She worked for a boss who did not give much feedback. When she handed in her resignation, he went on and on about how much she had contributed to their work team and how much he would miss her. She commented to us how much she would have loved to have heard those words more than once or twice a year at performance review.

I hired Lori to work part time for me. She is gracious, accurate, organized, dependable, and my staff and customers love her.