Many of us have seen poor leadership in action – those bosses that drive away your colleagues and new hires in droves, possibly even forcing you to quit as well. You’re left wondering why the management hasn’t changed, even in the face of such poor employee retention. When leadership in a company is poor, millions of dollars are lost each year due to the way it affects customer satisfaction, staff retention and productivity. When only 30% of your employees are actively trying to do a good job, there’s a problem. We’ve gathered some statistics to show you just how much poor leadership really costs.
- Between 9-32% of staff, turnover could be avoided with better leadership
- Poor leadership can cost the typical company up to 7% of their total annual revenue
- Improved leadership can eliminate the 5-10% drag in productivity that many organisations are operating with
- 25% of staff quit because they don’t feel empowered by their leader
- In a company of 250 that has 25% of its staff leave each year, with an average turnover cost of $5500 per staff member, this equals an annual turnover cost of $343,750!
- These figures are the dollars lost in staff turnover due to poor leadership: Entry level – 30-50% of salary. Mid-level – 150% of salary. High level – 400% of salary
When poor leadership is ignored, every aspect of a company suffers. You’re not getting the best from your employees, many of whom are actively trying to ‘get back’ at their leaders through reduced performance. Customers sense (or can plainly see) staff unhappiness, leading to poor customer retention; it’s not just employee retention that suffers.
The culture of an organization and business is so important, and ineffective leadership causes damage that cannot be repaired until the root problem is addressed. So how do we start improving the leadership within an organization, and decreasing its high costs?
Contact The Team At LeadershipHQ For A FREE Leadership Analysis At Sonia@Soniamcdonald.Com.Au
Start investing in your leaders, and in turn, your employees, by providing opportunities for improvement in their leadership skills. Whether you decide to do this internally with your HR department or outsource to an external company, you’ll soon see the benefits – and so will your bottom line.
Culture changes don’t happen overnight, but it’s worth reassessing your goals, vision and mission to make sure they align with the new culture you’re wanting to introduce and grow – one where employees are led by the best, where they feel valued and appreciated, and want to put in their best efforts for the company. Investing in your leaders means your staff will start becoming more invested in their work, and in the company as a whole.
Companies can’t afford to pay the high prices of bad leadership, so it’s time to be proactive and start facing the problem head-on – can you and your staff continue to pay the price, both monetary and emotionally? Don’t drive away your best employees (and customers) with bad leadership.
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