You can’t afford bad bosses: 5 ways expensive jerks are killing your bottom line
Chances are, you have worked for a bad boss at some point in your career. Even if you’re lucky enough to have only had good managers up to this point, you’ve probably met a few and observed some of the classic bad boss behavior--lack of integrity, blaming team members, micromanagement, poor communication, or a lack of courage, to name a few.
In my own career, I’ve had fantastic leaders who challenged me, gave me meaningful growth opportunities, provided critical mentorship, and cared about me personally, modeling some of the key qualities I worked to develop in my own leadership style. I’ve also reported to managers whose leadership was less than inspiring, and from whom I learned important lessons in managing up, compromising, and identifying the signs that it’s time to move on.
Moving on is a key reason why the costs to organizations of keeping less than stellar managers is high. In fact, 6 in 10 employees who have left a job in the past 5 years cited their direct manager as the top reason for their departure, causing organizations to lose out on more than $223 billion over the past 5 years in retention-related costs alone. When considering the full impact of these bad managers, Gallup estimates a staggering $319 to $398 billion per year in total costs to the U.S. economy.
The costs associated with bad leadership aren’t exclusively related to retention though. Here are some hidden ways bad managers are costing your organization.
Employer brand
Bad leadership can make recruiting more challenging, such as when your former employees go public with their grievances against their boss on social media and employer review sites. According to a 2018 report, 22% of employees have ruled out working for an employer because of what they read on review sites like Glassdoor.
Engagement
Employee engagement is one of the top ways your organization is hurting due to poor leadership. When measuring across the organization, many will find that there are large disparities in engagement across departments, which often translates into inconsistencies in productivity and execution. According to a Gallup study, at least 70% of the variance in engagement scores across the departments of an organization are directly attributable to quality of the managers.
Behavior
Some types of poor leadership, such as repeated mistreatment from a supervisor, can actually cause negative behavior from their team members. Worker revenge is the tendency to engage in behaviors such as gossiping, intentional poor performance, of stealing time or resources as a way to get back at a frustrating boss.
Productivity
Bad managers are an unnecessary barrier that can crush innovation, reduce efficiency, and stunts a company’s success, resulting in a 41% gap in absenteeism and a 17% gap in productivity from poorly led, disengaged teams compared to their more engaged counterparts.
Healthcare costs
Work-related stress is a key driver of rising healthcare costs in the U.S, with a staggering 5%–8% of annual healthcare costs tied back to stress from American business management practices. All of this increased stress is dangerous and expensive for employers and companies, as workers who self-identified as experiencing burnout are 23% more likely to have an emergency room visit and more likely to be diagnosed with anxiety or depression. With manager-related concerns cited among the top reasons for employee burnout, this is a harmful trend that companies can’t afford not to address.
The Bottom Line
While many organizations focus on recruiting top leadership talent, it’s likely to be more impactful to focus first on addressing your company’s bad bosses. In fact, removing a leader who is toxic may be more than twice as profitable for organizations as hiring a superstar.
Bad bosses are an expensive problem that’s costing your company in every area from employer brand to healthcare. Addressing poor leadership in your company is crucial to the wellbeing of your organization and your employees.
