After losing a star employee, every leadership team has the same conversation. Maybe it’s the job market. Maybe it’s due to Gen XYZ having an aversion to hard work or loyalty. Maybe we can just chalk it up to bad luck that three solid hires must have gotten poached and there was nothing we could do about it. The focus becomes the hiring process, so we post the role again and tighten the screws on the interview process, toss in a little signing bonus, and surprise surprise we lose that one too after six months.
It’s a familiar pattern, and the problem was never the turnover. Turnover is how we itemize the problem on a spreadsheet, but it’s the symptom, not the cause. And without identifying and fixing the root issue, you’ll just go through that dance time and again each quarter, with a different reason in the subject line to keep it feeling fresh.
What if we reframe this narrative a bit, viewing turnover as a lagging indicator of leadership wellbeing, and not an isolated problem to solve with better recruiting and more incentives up front? What if we view it as a downstream result of decisions, habits, and blind spots that were humming along long before that resignation letter hit your desk or they went ahead and updated their LinkedIn profile? We find it helpful to go back days, weeks or even months leading up to the loss, and focusing less on the two-week notice you got.
This reframe changes what you should be measuring. A leadership team is doomed if they treat turnover as the problem and pose questions like: “how do we hire faster than we can lose them, and stack enough retention motivation to delay the blood loss?” A successful leadership team says “what is it about how we lead that keeps resulting in this negative outcome?” The second question is less comfortable, which is why it’s more valuable. It’s the discomfort that registers an area of avoidance, and it’s the act of pointing the diagnostic tool back at the people asking it.
Asking this kind of uncomfortable question, or rather, holding the mirror up to the chain of command and behaviours and processes therein, paints a financial picture that is anything but subtle. Gallup has estimated that voluntary turnover costs U.S. businesses roughly a trillion dollars a year, and that replacing a single employee can run anywhere from half to double their annual salary depending on seniority. Compare this math to your existing headcount and it’s no longer an abstract HR stat and becomes the line item nobody wants to write down within operations.
So, if turnover is the symptom, the natural question is “of what?” We see in the research time and again that it’s not compensation, perks, or that custom painted mission statement on the wall in the lobby. It’s management.
Gallup has long-running research on workplace engagement, and they’ve found that managers account for roughly 70 percent of the variance in how engaged a team is. Simply stated, if you know nothing about an employee except who their manager is, you can predict a surprising amount of their engagement and their likelihood of staying. Of course, compensation, personality, and company policy make up the rest of the picture, but they are the supporting components. The manager is the lens through which all other things pass through.
Now we see where leadership teams get uncomfortable. When asked about their own employees, they can tell whatever narrative is needed at the moment, accurate or not. And it’s in their interest to protect their position as gatekeeper to the team. That allows disharmony to spread like rot while the manager continuously puts a fresh coat of paint over it. Without good management, that benefits package, catered lunch and office yoga time has little value because the relationship with management is one of the most important things to any employee, second only to the quality of the work.
Who manages your people? How were they selected for the role? Were they trained by someone who was already doing a good job in a similar capacity?
If your manager was promoted to that position for being the single best contributor on the team, that is not an automatic win. Management skills are not the same as superstar performance. Good at sales? Not guaranteed to be good at people who aren’t paying customers. Brilliant engineer? Doesn’t mean other engineers like or even would follow.
Yet that’s how so many companies operate. And when that promotion of top employees from within fails, they look for the silver bullet from the outside to come in and immediately fit the culture and needs of the workforce, which is another layer to this company cake.
A common solution to the employee retention issue is to use exit interviews to get the unvarnished truth. But anyone who has ever sat on the other side of the table has already checked out and moved on mentally. So the answers you get are like a bad rom-com; “it’s not you, it’s me,” “I found something better,” or even “I need to focus on other priorities.” More often than not, this employee felt neglected, that the company let them down, and why help them on the way out? They won’t benefit, and if the company fixes the problem, the lost employee now has no job and didn’t get paid for fixing the reason.
Deeper research complicates the saying that “people quit managers, not companies.” When Facebook dug into its own engagement data, the finding, published through a Harvard Business Review piece, was more specific than that: people with managers they genuinely liked still left, and the pattern showed up when the work itself stopped being enjoyable, when someone's strengths weren't being used, or when they stopped growing. It’s the other side of the retention coin: a good leader and good quality work.
And it’s not specifically the manager, it’s just whoever decided who gets stretch projects versus who gets stuck. The same person who turns a blind eye (or fails to notice) that a strong performer has been coasting on the same responsibilities for two years.
More recent research from Harvard Business School, discussed in an HBR conversation on why employees actually quit, describes this as a mix of push and pull forces, some of which are within a company's control and some of which never will be. They don’t try and make the point that every departure is preventable, rather that most leadership teams have never separated the departures they caused from the departures they merely witnessed.
Turnover data can still be useful, but it often aimed at the wrong target. The question isn’t “how do we get the number down,” but “what is making up the number.” Are all these losses connected to one or two managers? Is it a first 90 day problem (which would suggest a mismatch in hiring or onboarding), or is it the two-year mark, which usually means the person has hit a growth ceiling. Research from the Center for American Progress found that turnover costs scale sharply with seniority and specialization, meaning the departures that look small on a spreadsheet, one mid-level manager, one experienced account lead, are often the expensive ones hiding in plain sight.
You want to treat every exit as a data point in a leadership audit, not some random element or HR stat. Look for a manager who has lost three direct reports in eighteen months and then you should ask why you aren’t talking about that. Look for the department with recurring complaints in the same theme that keeps popping up, either anonymously or through exit interviews (if you’re so lucky to be told).
A proper leadership diagnostic test is very hard to do internally, but the data is usually in plain sight, but without anyone using the right lens to interpret it.
You can’t eliminate turnover completely, and it’s not a good idea to try. People have healthy departures all the time, and sometimes life happens. Your workplace is not the centre of your employee’s lives, nor should it be. But when there is a recurring pattern across the org chart, don’t jump to “hire better”, and maybe consider “maybe it’s us, not them.”
