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Posted by on Jun 2, 2010 in Career, TG Roundup

Why do talented employees leave companies?

Largest studies undertaken by the Gallup Organization.

Come to think of it. This is almost 100% true. Read below & find out the answer.

Early this year, Arun, an old friend who is a senior software designer, got an offer from a prestigious international firm to work in its India operations developing specialized software. He was thrilled by the offer.

He had heard a lot about the CEO of this company, a charismatic man often quoted in the business press for his visionary attitude. The salary was great. The company had all the right systems in place employee-friendly human resources (HR) policies, a spanking new office, the very best technology, even a canteen that served superb food.

Twice Arun was sent abroad for training. “My learning curve is the sharpest it’s ever been,” he said soon after he joined. “It’s a real high working with such cutting edge technology.”

Last week, less than eight months after he joined, Arun walked out of the job. He has no other offer in hand but he said he couldn’t take it anymore. Nor, apparently, could several other people in his department who have also quit recently.

The CEO is distressed about the high employee turnover. He’s distressed about the money he’s spent in training them. He’s distressed because he can’t figure out what happened. Why did this talented employee leave despite a top salary? Arun quit for the same reason that drives many good people away. The answer lies in one of the largest studies undertaken by the Gallup Organization.

The study surveyed over a million employees and 80,000 managers and was published in a book called First Break All the Rules.

It came up with this surprising finding: If you’re losing good people, look to their immediate supervisor. More than any other single reason, he is the reason people stay and thrive in an organization. And he’s the reason why they quit, taking their knowledge, experience and contacts with them. Often, straight to the competition.

“People leave managers not companies,” write the authors Marcus Buckingham and Curt Coffman. “So much money has been thrown at the challenge of keeping good people – in the form of better pay, better  perks and better training – when, in the end, turnover is mostly a manager issue.” If you have a turnover problem, look first to your managers. Are they driving people away?

Beyond a point, an employee’s primary need has less to do with money, and more to do with how he’s treated and how valued he feels. Much of this depends directly on the immediate manager. And yet, bad bosses seem to happen to good people everywhere. A Fortune magazine survey some years ago found that nearly 75 per cent of employees have suffered at the hands of difficult superiors. You can leave one job to find – you guessed it, another wolf in a pin-stripe suit in the next one.

Of all the workplace stressors, a bad boss is possibly the worst, directly impacting the emotional health and productivity of employees.

Here are some all-too common tales from the battlefield:

Dev, an engineer, still shudders as he recalls the almost daily firings his boss subjected him to, usually in front of his subordinates. His boss emasculated him with personal, insulting remarks. In the face of such rage, Dev completely lost the courage to speak up. But when he reached home depressed, he poured himself a few drinks, and magically, became as abusive! as the boss himself. Only, it would come out on his wife and children. Not only was his work life in the doldrums, his marriage begun cracking up too.

Another employee Rajat recalls the Chinese torture his boss put him through after a minor disagreement. He cut him off completely. He bypassed him in any decision that needed to be taken. “He stopped sending me any papers or files,” says Rajat. “It was humiliating sitting at an empty table. I knew nothing and no one told me anything.” Unable to bear this corporate Siberia , he finally quit.

HR experts say that of all the abuses, employees find public humiliation the most intolerable. The first time, an employee may not leave, but a thought has been planted. The second time that thought gets strengthened. The third time, he starts looking for another job.

When people cannot retort openly in anger, they do so by passive aggression. By digging their heels in and slowing down. By doing only what they are told to do and no more. By omitting to give the boss crucial information. Dev says: “If you work for a jerk, you basically want to get him into trouble. You don’t have your heart and soul in the job.”

Different managers can stress out employees in different ways – by being too controlling, too suspicious, too pushy, too critical, too nit-picky. But they forget that workers are not fixed assets, they are free agents.

When this goes on too long, an employee will quit -often over seemingly trivial issue. It isn’t the 100th blow that knocks a good man down. It’s the 99 that went before. And while it’s true that people leave jobs for all kinds of reasons – for better opportunities or for circumstantial  reasons, many who leave would have stayed – had it not been for one man constantly telling them, as Arun’s boss did: “You are dispensable. I can find dozens like you.

While it seems like there are plenty of other fish especially in today’s waters, consider for a moment the cost of losing a talented employee.

  • There’s the cost of finding a replacement.
  • The cost of training the replacement.
  • The cost of not having someone to do the job in the meantime.
  • The loss of clients and contacts the person had with the industry.
  • The loss of morale in co-workers.
  • The loss of trade secrets this person may now share with others.

Plus, of course, the loss of the company’s reputation.

Every person who leaves a corporation then becomes its ambassador, for better or for worse.  We all know of large IT companies that people would love to join and large television companies few want to go near. In both cases, former employees have left to tell their tales.

Any company trying to compete must figure out a way to engage the mind of every employee,” Jack Welch of GE once said. Much of a company’s value lies “between the ears of its employees”. If it’s bleeding talent, it’s bleeding value.

Unfortunately, many senior executives busy travelling the world, signing new deals and developing a vision for the company, have little idea of what may be going on at home.

That deep within an organization that otherwise does all the right things, one man could be driving its best people away.

3 Comments

  1. Chandrasekhar garu,
    Good topic. Generally I agree with the BOSS thing. But there are several reasons for quitting current job once you become experienced in a particular field. For those who are at the beginning of career path salary, being able to associated with a bigger company is more important. Salary is self explainable , more money. Being associated with a bigger company is something that attracts young professionals more than experienced folks. Its about “Getting to know how things works in bigger companies”. Once folks switch few companies they realize that things works “ALMOST” the same way in most companies. So the BOSS factor is more important than anything. Simply because you want the guy above you to work with you not against you. The BOSS gets more respect If he/she happens to be more knowledgeable than you. Which results in a good professional relationship. Unfortunately there are many douchebag managers out there.

    In addition, I would add the whole chain of command from BOSS’s BOSS ===> CEO as an important factor for reducing the employee turnover. This chain of command is responsible for creating an environment where folks are challenged intellectually resulting in keeping employees “INTERESTED” in their daily job.

  2. Why do we not change the jobs here like we do in India. Does this mean, the BOSS in India is not good and the BOSS here is good? Also Does this mean that there are no TALENTED employees in other sectors other than IT where we don’t here a lot about attrition. Companies like Infosys and TCS are facing DOUBLE DIGIT jumps(According to stock market data). Does this mean Infy and TCS has bad BOSS(let’s say team lead. ) . If few tens of employees are leaving the company then BOSS may be a reason.But If few thousands are leaving the company and you say that the BOSS is still the reason, then I would say the whole management in the company is bad.
    I would like to give a real world scenario just for FUN.
    In one of the Federal home loan companies, after taking billions of dollars of bailout every quarter, they are giving bonuses, not in the name of bonus but in the name of employee retention award, saying that all the employees are so TALENTED that they don’t want to loose. What we have to observe here is according to that company TALENT means creating a big mess in the name of Mortgage

  3. I have a reason to post this article and I believe it is 100% true.
    Before pursuing masters I was working in one of the MNC [around 800 crores only India turnover] for about 3years. In this span, 13 of my colleague left the job; few left for better placement and most didn’t have job in their hand. For this one of the reason is BOSS. At a point of time I was about to resign but, idea of further education changed my decision.