‘Employees don’t quit jobs; they quit managers.’
We know about the Great Resignation and the impact of the pandemic on increasing employee turnover rates. We know about the challenges of recruiting in tech roles (remember our recent conference on the Complete Hiring Arc?) and the cost of turnover. But did you know that technology is among the top five industries with the highest employee turnover? That’s right; a recent study found that turnover in technology reached over 18% in 2022. And poor management could have a lot to blame for these numbers, and there’s more cost than just replacing leavers. So, management training could be your organisation’s best return on investment (ROI).
Is turnover really that bad?
It is. Turnover is everywhere in technology regardless of organisation size, and even the most prominent brands struggle with turnover. For example, it’s reported that the average tenure for tech workers at Google is just 1.1 years, with an average 24 months stay at Apple and only a year at Amazon.
Engineers are particularly sought after yet increasingly difficult to resource. Take, for instance, the US, where the average length of service for engineers is 35 months, and even during the pandemic in 2020, Google’s software engineering recruitment increased by 12%.
So, while the tech industry struggles with retention and hiring issues, organisations must do more to look after their tech workers.
It’s no longer possible to apply a one size fits all model to employees; managers need to do more to engage their people, give them purpose and fulfil individual needs. Yet, how can managers do this? It will take some serious management training and development for a return on investment.
Why are technical employees leaving?
Although tech leavers may not explicitly state that they’re leaving due to their manager (it’s not always the easiest thing to admit in an exit interview!), there can be no doubt that management plays a significant part in employee turnover.
According to a 2022 retention report, 22% of employees leave for career reasons (e.g. growth and promotion opportunities) and 11% due to their job (e.g. stress, resources, training and empowerment). And while these reasons aren’t explicitly blaming managers, managers play a part in many of these areas. In addition, the report found that 8% leave for management reasons, including professional behaviour, support or communication.
What are the costs of poor management?
It’s impossible to put an exact number of the cost of poor management at any organisation. However, there are ways you can gain insight into the risks, costs and implications of poor management and why investing in management training may be exactly what your business needs to improve productivity, engagement, attraction and retention.
Here are some factors to consider when you’re debating the need for management training:
- Turnover
Employee attrition is costly as it’s expensive to replace ‘good’ leavers. But it’s not just the recruitment costs; it’s the cost implications of training and developing new starters and the risk of what happens when you’re trying to recruit. So, for example, if it takes on average 62 days to hire an engineer, that’s a period where other team members will undoubtedly be picking up more work which could lead to stress or burnout or a lack of productivity or output.
- How does management training help?
In many ways! If managers can create a team where each team member is treated as an individual and according to their needs, it may increase commitment and engagement and reduce attrition. Therefore, managers need to emotionally connect with each person they manage to build better relationships and bring out the best in their people.
How do managers build emotional connections? Commitment and time. Organisations must train managers in how to manage and find a balance in spending time with individuals. In addition, they must commit to understanding each person’s work preferences and motivators.
For your organisation, look at your turnover rates. Even if you assume half left for manager reasons, you face high costs. Therefore, investing in development managers seems essential.
- Absenteeism/sickness absence
It’s reported that the tech industry has the highest number of unplanned absences compared to other sectors. In the UK, sickness absence is at a record high. One reason may be burnout, and while managers can’t necessarily prevent the pressures of an employee’s role, with the proper training, they should be able to spot where the regular absences lie and how to help the individuals involved.
In some situations, managers may be able to have conversations with employees and delve into reasons for repeated unplanned absences. With the right coaching skills, these conversations can be meaningful and helpful (rather than an attack on the employee). In addition, skilled managers can effectively delegate work and monitor team member workloads and engagement levels. Finally, an effective manager should be approachable for members to discuss work pressure and concerns.
- How does manager training help?
In the US, a survey by Mental Health America found that those organisations who invest in developing their managers to be supportive of mental health had healthier workplace scores. However, only 40% of employees said their organisation invests in developing supportive managers. Furthermore, the survey found a correlation between supportive management and positive employee mental health outcomes and empowerment.
Therefore, there appears to be a significant ROI on training managers to support absence and health within their people and here’s how your organisation can do it:
- Provide tailored mental health training for your managers to encourage a management culture of emotionally intelligent and supportive individuals who understand signs of stress and burnout.
- Ensure managers know what support is available to their people for physical and mental health and are aware of related policies and procedures.
- Where possible, provide coaching skills for managers to encourage active listening skills, open discussions and feedback.
- Productivity and employee engagement loss
Engagement drives performance, so if your managers aren’t motivating their people, the risk is reduced productivity and performance. If your managers are well trained, they are better equipped to manage difficult situations and develop, educate and train their people.
For example, one technology consulting firm reviewed management training for over 500 managers and found that only a third of managers had received nine or more hours of management training, and 44% had received less than two hours!
- How does manager training help?
Specific development training for managers opens a vast array of skills and information for managers. While many may have learnt their management style from previous managers (which may not be the best style!) or others have created their style, they may be missing vital management components to develop an efficient and motivated team.
In the current climate, managers must be able to manage hybrid and fully remote workers and teams and create and develop inclusive teams. This may not come intuitively without training. If they handle difficult situations poorly because they lack training, it can result in costly legal cases, poor work culture and disengaged workers.
At Mondo, managers commit to career mapping to engage their people. This includes each manager meeting with a direct report regularly to discuss the person’s potential career development opportunities and professional goals. By doing this, managers treat each person individually and according to their personal goals rather than assuming all employees seek the same career path. Such personalised development creates development options and transparency. Such frequent and open conversation also allows employee empowerment to personalise their career and the business to invest in the correct development.
It’s an employee-led market in technology, and business leaders need to act to train and develop their managers to be better managers. The adage ‘Great leaders are made, not born’ is more applicable in technology than ever. Leadership must ensure managers are equipped to reduce retention, increase recruitment and engagement, face new challenges and responsibilities and possess the tools to shine.
Quite simply, investment in managers should improve the bottom line and increase engagement.
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