Employees Leave — Deal With (and Benefit From!) It

Yeah, we’ve all seen the phrase “People Leave Managers, Not Companies”, right? It might have been in an article, or a book, but the baseline story is always — so logically — some variation of
If you are a good manager, then people like working for you, and will stay around, but if you are a bad manager, then people do not like working for you, and will, therefore, leave

It’s all so straightforward and logical, right? Well, it turns out that it is also a load of bullshit.

Raghuram et al. (•)studied this exact issue, and discovered that, employees leave both good and bad bosses at almost the same rates. The reasoning, as it turns out is also just as logical — and as with most things in the real world, not as “simple” a story as we would like it to be. Basically, good managers level-up their employees to the point where they are now ripe for the picking by others.

Good leadership doesn’t reduce employee turnover precisely because of good leadership. Supportive managers empower employees to take on challenging assignments with greater responsibilities, which sets employees up to be strong external job candidates. So employees quit for better opportunities elsewhere — better pay, more responsibility, and so on

Mind you, this isn’t all bad news — there is an additional “network effect” that comes into play, where the folks that leave can become good for your business down the road.

Former employees with good bosses are what we call “happy quitters.” … their feelings toward their former employer … were overwhelmingly positive … Good leadership … is an important tool for building goodwill with employees, which they are likely to retain as alumni, in turn becoming sources of valuable information, recommendations, and business opportunities later on.

All that said, there is one very, very important caveat — it is all about the off-boarding process. The better you treat them towards the end, the better off you are down the road.

… good leadership generates alumni goodwill only for those employees who experience good faith retention efforts when they quit. So managers should go to bat for their employees and counteroffer if they can … such retention efforts are critical for preserving the goodwill created by good leaders with employees, which can then be translated into a continuing relationship with them as alumni.

In short do all you can to retain them, and when you can’t do any more, be positive and act in a heartfelt manner. Always remember, you don’t get a second chance to make a last impression!

To summarize

1. Leadership does not beget retention : In essence, your employees might walk away saying “Alice is awesome!”, but they are still going to walk away.
2. Good leaders build strong alumni relationships : How do your ex-employees talk of you? Positively? If not, you will eventually get black-balled in the local talent-pool.
3. Off-boarding is very important : How did you treat them when they left? Not the dopey HR stuff, but did you — truly — signal their value, and come across as wanting to continue a relationship?

(•) “Boundaryless LMX: Examining LMX’s Impact on External Career Outcomes and Alumni Goodwill” — by Raghuram et al.

(This article also appears on my blog)