Perks Don't Retain People, Managers Do

When employee retention is low, leadership usually reaches for perks and teambuilding activities. These are not only ineffective because they do not address the main reason people leave, but also counterproductive because they show that leadership either doesn’t understand the main reason people leave or is unwilling to address it. That’s extremely frustrating.

In my experience, once pay is competitive and work hours aren’t extreme, the number one reason good people leave is not the company, but their supervisor. This is why perks and other activities meant to strengthen the bond with the company usually fail. Nine times out of ten, it would pay off more to train supervisors.

What bad supervisors do that makes people quit

Contrary to common belief, the top offender is not micromanagement, but lack of management.

• They let caring go unrewarded. Someone works hard, flags a problem, or suggests an idea, and nothing follows: no acknowledgment, no action, or, sometimes, more work for no additional reward.
• They withhold feedback until it is too late. They assign a task or objective, and wait until the deadline to give their feedback, with the result that if the employee was working in the wrong direction, they only learn about it when it’s too late, and after they have poured sweat and tears into something that won’t be used.
• They avoid difficult conversations until it’s too late. If they see someone whose performance is lacking, they let them think it is enough for months before surprising them at the year-end performance review.
• They waste people’s time. Meetings that decide nothing, training sessions that don’t address bottlenecks, and tedious tasks whose purpose is never explained. Employees read wasted time as disrespect.
• They give up on the disengaged. The moment an employee disengages, even for just a day, the manager does not tell them that they noticed, which signals that their work isn’t important. A better alternative would be for the manager to say that they noticed, and that even if there may be a good reason for this time, such as a family worry, they expect the person to get back on track soon.

Supervisors set the track record

Culture is not a set of values on a wall; it is the track record of what happens when people act. And engagement, specifically, is the track record of what happens when someone cares.

When someone works hard, raises a hand, or points out a problem, what follows? Does it lead to good outcomes, or to a lesson that it wasn’t worth the effort? The supervisor is the person who answers that question every day, over and over.

Good supervisors set the track record that it’s worth caring; whereas mediocre supervisors set the track record that it’s better not to care.

Mediocre supervisors are the reason ambitious people leave

Assuming you took care of the basics, meaning the pay is competitive, the workplace has some dignity, the bureaucracy isn’t oppressive, etc., the most likely reason ambitious people may leave your company is probably mediocre supervisors who aren’t able to set them up for success.

Of course, there may be other reasons for which they may quit, such as your company being in a low-growth industry or your office being in an undesirable area of the country, but these are probably not things you have much control over. Supervisors, instead, are something you can control directly.

So, train them. And in particular, train them so that they do not treat ambitious employees like everyone else. Ensure that they spend time with them and help them grow. This involves setting ambitious objectives, pushing them out of their comfort zone, helping them network, and giving them advice and pointers for career growth.

A common mistake supervisors make is spending most of their coaching time on weak employees, trying to move them from 0.5x to 0.6x, where 1x is average performance. But the same management attention might move a stronger employee from 1.5x to 2x, 3x, or even 5x and beyond.

Retention is a management-capability problem

Most supervisors are decent at project management or process management. That’s usually because they were promoted from line roles precisely for their capacity to run projects or processes. That’s good, but if that was the main criterion for their promotion, they may lack the people management skills that are so critical for employee engagement and retention.

This means that, when they get promoted, you shouldn’t just train them on project and process management, plus all HR duties of their role; you should also train them on noticing effort, giving feedback early and often, removing wasted time, and refusing to write people off.

That requires treating managerial capability as the lever it is, rather than as something you assume people were born with, or automatically acquired upon their promotion.

Want help putting this into practice?

Turning supervisors into managers people don’t want to leave, and diagnosing why your valuable employees are actually leaving, is one of the most common problems leaders bring to me. If you are losing people you wanted to keep and perks are not moving the needle, that is the kind of problem I work on with leaders. Here is how to start.