How Expensive Is Poor Leadership
Posted: 9/1/2005 10:53:48 AM
How Expensive is Poor Leadership?
More than you think…………..
Retaining talented employees should be a major focus for companies these days. I have heard over the years, that “anyone is replaceable.” When I was a young engineer fresh out college, I believed it myself. There were over 50 engineers in my graduating class and I was competing for jobs like they were. We had very similar skills and backgrounds and I knew I had to separate myself from them so an employer would hire me and not them. Even a couple years after college, I still believed that I could be replaced at any moment by fresh new talent.
It has been drilled into our heads over the years that we are replaceable and we have to conduct ourselves in a way that borders on humiliation. I took my first leadership role over a year ago after working for a few companies that really did not value the contributions of their people. Overtime and chaos was name of their games. Fortunately, those experiences allowed me to create my own leadership philosophy that centers on the fact that my people are not replaceable.
Employee turnover is very expensive. I recently was invited to speak at the 2005 Talent Management and Succession Planning Conference on creating a work life balance for employees to motivate and retain good talent. My emphasis will be on the importance of creating a pleasant work environment where leaders and employees respect each other. People will generally stay with a company if they are treated fairly, are given legitimate challenges, and feel their contributions are recognized.
The best way to illustrate the cost of poor leadership is give an example of what it takes today to hire a mid-level engineer. First, the engineer’s resume would cost the company around $15,000 provided it is coming from a recruiter. Today, many professionals move around the country, so the company would offer a full relocation package that would include moving of household items, vehicles, and pets. This would cost around $8,000. Then the employer would cover travel expenses including airfare, temporary housing, rental cars, and maybe thirty days of living expenses during the transition. I will be modest here and say that would cost around $5,000. Many employers also cover closing costs on both selling and buying of a home that could run as high as $10,000 total. Finally the engineer may be offered a starting bonus of $2,000. So, before the employer even starts paying the engineer his or her $65,000 a year salary and before the new employee steps in the door they have paid out around $40,000. This is a very large investment and I have seen many people in these positions quit after ten months to a year from poor leadership in a hostile work environment. Now the company has to do this routine all over again.
Good leadership is the key to retaining good employees and bad managers will only drive them away. As a leader myself, I cannot afford high turnover. I invest time and money into enhancing my people to be better employees. It becomes expensive to keep hiring people and training them to be productive and successful employees. I realize employees leave companies for a variety of other reasons. However, I can still do my part to make their work life a pleasant one.
About the Author
Chris Ortiz is a senior lean consultant and the owner of Kaizen Assembly. He has spent the majority of his professional career working for Fortune 500 companies, teaching and guiding them to become more efficient businesses. He has designed and constructed well over 100 assembly lines and other manufacturing processes resulting in millions of dollars in cost savings and waste reduction.
He is the author of 40+: Overtime Under Poor Leadership and his Ten Signs of an Incompetant Leader ihas received international recoginition. Chris has been featured in the Chicago Tribune, Seattle Times, Orlando Sentinel, and dozens of work life balance newsletters and trade magazines. He is an active speaker on workplace related issues and writes articles on leadership, overtime, and employee based programs.
Chris can be reached at [email protected] or visit his company's website at www.kaizenassembly.com
Date: 9/2/2005 9:57:00 AM
I would like to hear from some managers on this one.
Date: 12/31/2005 2:35:00 AM
I like my company and my job, when my direct boss is not around. But, not only does she degrade me and other employees around me, she will not let me speak with the boss above her. I feel trapped. I have been working for her for two months and had only one day off!! I don't want to quit.. but I am so run down and exhausted. I don't think I can take her much longer.
Date: 2/6/2006 11:44:00 AM
I would like to see some posts from HR and Talent Management folks here.
Date: 3/28/2006 1:49:00 AM
Chris, good stuff. I was just fired yesterday because my supervisor says I don't listen to her. As employees what are our rights in deciphering our higher ups infiority complex VS. the fire at will state? Where is the security in that? -Lewis
Date: 3/28/2006 7:24:00 AM
There is very little protection these days for employees. Most states have an "at will" employement policies where you can be released for any reason.
Some companies have more protection for their people like verbal, written, and 2nd written policies that do not allow managers to just fire people.
A good rule of thumb when looking for work is to find out what kind of termination policy is in place. Are employees given warnings and counseling? A lot of the times if a person has a past of great performace that is documented, and the person is let go, they can submit a lawsuit and the company would settle.
However, policies aside managers with self confidence issues are a fact of employment and sometimes you pick a bad apple and don't see it coming.
Date: 4/8/2006 1:37:00 PM
There needs to be laws put into place; whereas the employee's can sue their bosses directly as well as the company. I have been working in the workplace for over 20 years and I have seen managers, play games, hurt employees by outright lying on them.
Where I work now we have a manager who makes over $100,000 per you and she has a GED and no people skills. There as been many complaints against her through the years, but nothing seems to be done.
We have a total of 4 managers and The Regional Director, who is dumb and stupid and have no value as a leader in the office, but nothing is every done to stop them from harming their employee's. It funny, because the employee's in the office seems to go along with what they do to other employee's, there have a saying, "I do not have any thing to do with what going on to a specific employee, so I am not involved". Get in mind this people get the $6,000 cash bonds.
if you are smart and know your stuff, you are threatto them. Other employees has left over the years, but some of the worse employees stay on. I have been there for 5 years, because the money was good, but it has not been worth my peace of mind.
I am applying for other jobs, I just going to move on and leave those negative, hateful people behind.
I going to kept the faith and hold my head up high and move on.
Date: 4/13/2006 9:01:00 PM
After reading all of the concerns from other unhappy workers, it just makes me realize that there needs to be stronger government regulations on the treatment of workers, with stronger penalities,(which large corps/orgs. will certainly rally against)and if corporations could only see that happy workers are productive workers. Then all would be well.
Date: 5/5/2006 10:38:00 AM
Yes, the perfect solution is for everyone to work for the state, make the same wage, and live in government housing. I will feel much more secure when the government has full control of my life
Date: 2/15/2007 8:16:00 PM
The leadership at
A Gardens in P, AZ.
Kitchen Manager, I was told he has THE RIGHT to Verball ASSULT and to
VERBALL HARRASS the employees, the Dietary manager GAVE him that RIGHT. THAT is the WAY HE was TRAINED. I was also threaten, when I told I was called a LIAR. I was then FIRED.
Date: 2/15/2007 8:19:00 PM
Yes Managers need to be HELD accountable for there workers. When others are threaten, cussed at harrassed and verbally assulted there needs to be LAWsuits, against the place of employment and the people that LET it HAPPEn
Date: 5/7/2007 1:38:00 PM
At the rate I meet people like myself who suffer from chronic conditions such as fibromyalgia, chronic fatigue immune deficiency syndrome, chronic variable immune dysfunction, cardiac arrhythmias, thyroid and adrenal problems and chronic pain, whose conditions developed or worsened due to poor leadership and who are now on disability, I'd say the cost of poor leadership eventually will be every American citizen who has a central nervous system and/or human emotions, and the entire collapse of Social Security due to disability claims. I feel like my bullying bosses contributed, if not caused, my conditions due to their constant criticism and emotional abuse, and so do quite a few of my MDs. I am highly educated, and was a very productive, hard working employee, but thanks to poor leadership, all of this is wasted. Besides the cost of training, etc., was the cost of one human life estimated? Or are humans, as a few bosses told me over and over again, "a dime a dozen"?
Date: 5/7/2007 1:51:00 PM
For someone who asked what our rights are, I want to let you know that in my experience, we have none. Working under very bad/lack of leadership in a government job, I believed that the laws of the U.S. government would protect me. Wrong. I discovered that even if you have a great deal of evidence to the contrary to hold your employer accountable, if government organizations such as the EEOC, workers comp., OSHA, the ACLU will not hold employers responsible for breaking the law, then we have no rights as employees. If the government agencies put in place to assist us would do so, I think this would be a start. I doubt that this will ever happen, however, because employers, businesses, etc., are the ones with the money to contribute to political campaigns and elect the government officials who make laws favoring the employers.
Date: 7/31/2007 1:35:00 AM
I have a bullying boss. I will be resigning in 2 days to preserve myself.
Before I do, I will be talking to the
top dog administrator and HR director
who have no idea what goes on. If the
response is not good, I will take this
public and also sue, even though I am
not the suing type. Something has to
change for the first-line employees that do the hard work.
Date: 9/8/2007 8:37:00 PM
Anti-Bullying has nothing to do with the "left wing." It is apolitical. The worker in the U.S. with no union has virtually no rights, at present. If human nature were good, as liberals postulate, we would not need employee unions, but as a conservative I believe that human nature is corrupt. This is why we need to protect good people from evil people in positions of power. The U.S. really needs to get with it and gear up to the point where we are doing something for ordinary workers on a national level, as some European countries are doing. Workers make the world go round and there is absolutely no justification for the bullying and abuse of honest, hard-working, and reliable employees by sociopathic managers who don't care about anything but having power over others. If a manager is not doing what is best for the company as a whole organism, that person, like a virus, needs to be eliminated. So why can't some corporate bosses seem to get it? God bless all you workers out there.
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