Six ways to lose staff and demoralise people

Losing staff is a nightmare for any business. Even if you discount the hours it takes to find a replacement, it’s a painfully expensive process. The average fee for replacing a departing staff member is £30,614, according to research by Oxford Economics. This means that UK firms spend a whopping £4.13bn every year on staff turnover.

And don't assume that your leadership styles and those problems are unrelated. A productive leadership style is fundamental to creating a positive business atmosphere and retaining valuable employees. From the lacklustre to the overbearing, the arrogant to the timid – finding and maintaining the balance as a manager has never been easy.

Workers can be flighty: the average Gen Y-er will have between 15 and 20 jobs throughout their career. Losing an employee after just a year or two means that precious time and resources have been wasted. Ultimately, the employee is lost before the investment pays off.

This footloose and fancy-free approach to work isn’t entirely this generation’s fault. The ‘job for life’ has all but disappeared; everyone has one eye on their current job and another on the next opportunity. A recent study by Investors in People found that 47% of employees considered moving jobs in 2014, with almost a quarter saying they would have moved 12 months ago had the economy been stronger.

So what are the terrible mistakes made by managers that send good staff running for the hills? (And it is usually management’s fault. Of the 24% of employees who said they were unhappy in the Investors in People poll, 47% blamed bad management.) Commit these sins at your peril.

1. Micromanage everything

There is nothing more disheartening for an employee than to be assigned a task and then be made to feel like they are incapable of completing it to your high standards. If you find yourself resisting delegation, involving yourself in other people’s work without being expressly asked, focusing on minutiae, demanding endless reporting on small details, or devaluing the experience and skills of your team, it’s time to change.

Micromanagement is just another term for mismanagement, according to Callum Negas Fancey, chief executive and founder of Let’s Go Crazy Holdings, a brand advocacy business. “I have only ever worked for myself, in part due to poor working culture practices I’ve seen from my peers and hearing various horror stories,” he says.

“Micromanagement and presenteeism show a fundamental lack of trust in people. People shouldn’t be punished for buses being late or children needing to be collected from school in an emergency. Here, work is fitted around life schedules, not the other way round, providing more balance and building trust.”

You will only get the best out of your people by giving them ownership: the ability to solve problems their way.

2. Be stingy

It is important to be careful with cash when starting a business. But failing to pay staff a fair wage, cutting corners on resources or technology, and refusing to fork out for the occasional staff social is just plain stingy.

Rebecca Goodyear, who founded her eponymous beauty PR firm last year, warns: “Treating your staff like slaves and paying a pittance is a surefire way to push your workers over the edge and have them handing in their letter of resignation faster than you can type ‘P45’.”

“When we started the business we avoided spending money on anything,” adds Sam Barnett, founder of ad technology firm Struq. “All our chairs were freebies. We used the wi-fi connection from the company below and our desks were salvaged doors bolted to table legs. This is part of start-up life but it’s key to recognise when you are no longer a start-up and instead being a cheapskate.

“When you have global clients and a multinational business, people aren’t pleased when they are still sitting on the chair you found outside the bookies.”

3. Welcome sexism, racism and homophobia

Banter is one thing, but if you allow a culture of discrimination to spread in the workplace, you could end up losing your best people. The problem is more widespread than you may think. An Opportunity Now survey of 25,000 women revealed half of them have experienced sexism at work in the UK. And it was only in 2003 that a law was passed in this country preventing employers from discriminating against gay people (by not hiring or promoting them).

Managers must be trained to spot signs of discrimination, and have a clear investigation plan. And discrimination goes beyond name-calling. It extends to softer issues such as flexible working – companies must now by law consider all flexible working requests.

Michelle Chance, an employment partner at law firm Kingsley Napley, warns: “Consider each request on its merits in the context of your business and whether it can accommodate the request, rather than focusing on the reason for the request, which may be irrelevant. That way you avoid getting into discrimination territory. If subconscious bias creeps into your decision-making process, it could cost you dearly.”

4. Make everyone a manager

In management, too many chefs really can spoil the broth. John Rogers, founder of previsualisation business Capturing Imagination, found himself working in a team of eight – with four managers – during his previous life as a lighting and sound engineer for a large corporation.

The positions had been created to keep the individuals happy, not because they were necessary to run the business. “They just wanted to claim to be in a managerial position in some way,” says Rogers.

“I wasn’t so much on the bottom rung as actually holding the ladder. Getting a decisive call on an urgent query would always sprawl out into meetings or piles of emails.

“I would sometimes mentally add up the hourly rate of everyone around the table and work out just how much money we were wasting minute by minute. It was harrowing.”

5. Build a rudderless ship

Values, schmalues. No one really cares about ‘company culture’ or brand, anyway. Wrong. “Build a rudderless ship and set sail with an incompetent captain and you’ll soon be dead in the water,” says Rebecca Goodyear, who runs her own PR firm. “In business you need direction.”

According to a recent survey by Net Impact, 58% of respondents said they would take a 15% pay cut in order to work for an organization “with values like my own”. That means more than half of your employees rate company culture over their own pay.

Failure to have a mission and a clear vision of how to achieve company goals will erode your employees’ confidence and ambition, warns Goodyear. “For your staff, being part of the crew of a rudderless ship leads to a meandering pace at work, with a lack of direction and purpose. After all, if the captain doesn’t know where the ship’s going, and has no way to steer it, what hope do they have of getting somewhere?”

6. Encourage isolation

Teams must be able to communicate and collaborate in order to work effectively, and you must give them the tools to do that. In today’s global marketplace, multinationals run slick operations across multiple time zones. They do this by embracing technology. Communication tools such as Skype, HipChat or Campfire can help foster collaboration, although simply embracing apps like Google Docs, which allows multiple editors at once, can foster creativity and help people to brainstorm ideas.

Consider introducing a weekly meeting or video conference where everyone gets a minute to talk about what they’re working on – their colleagues can then follow up with any ideas or suggestions later. If people feel lonely and isolated at work, and are unable to ask for help or guidance, they are more likely to leave – and work for your friendly, collaborative competitor.