Beyond Paychecks: How Great Leaders Keep Their Best Employees

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The Research

Employee turnover has become a critical challenge for organizations across all industries. The statistics are sobering: the average employee turnover ranges from 15-20% annually, with some sectors like retail, hospitality, and technology experiencing even higher rates. More alarming is the financial impact—each departing employee costs an organization approximately 1.5 to 2 times their annual salary, when factoring in recruitment, training, and lost productivity.

But what truly drives talented employees to seek opportunities elsewhere? The answer lies largely in leadership. Zenger Folkman’s study of 97,566 global leaders revealed a stark contrast: the least effective leaders saw 53% of their team contemplating resignation, while the most effective leaders retained 90% of their talent.

Perhaps most revealing is that up to 75% of employees who voluntarily leave their jobs cite their manager as the primary reason for quitting.

What separates exceptional leaders who retain top talent from those who constantly struggle with turnover?

After analyzing a dataset of over 500,000 employees who indicated their intention to leave their organization, and examining their ratings of their manager on 60 individual behaviors, we identified the top 8 leadership behaviors that had the greatest impact on employees' decisions to stay with their organization.

Magnetic Leaders— What Research Shows They Do Differently

What are the leadership behaviors that cause colleagues to want to stay and not look for greener pastures? Here's what Zenger Folkman's data analysis revealed.

1. Inspirational Leadership: These leaders transform work from a series of tasks into a meaningful mission. Instead of pushing employees to complete assignments, they illuminate the broader purpose, helping team members see how their work contributes to societal progress and creates meaningful change.
2. Conflict Resolution Masters: Workplace conflict is more than a distraction—it's a potential team destroyer. Magnetic leaders neutralize tension by introducing humor, creating a positive environment, and addressing conflicts before they erode team morale and productivity.
3. ?Holistic Performance Champions: Delivering results isn't just about metrics—it's about understanding the human behind the performance. These leaders balance aggressive goal achievement with genuine empathy, recognizing that acknowledging an employee's personal situation can profoundly impact motivation and commitment.
4. Deliberate Development Architects: Professional growth is the lifeblood of talent retention. These leaders view team development as a strategic priority, actively creating opportunities for learning and challenging assignments, understanding that personal development is as critical as current productivity.
5. Team Culture Cultivators: Beyond traditional team management, these leaders create emotional ecosystems where collaboration feels natural, and belonging is a privilege. They embody the principle that "Together Everyone Achieves More," transforming groups of individuals into cohesive, high-performing units.
6. Purpose and Direction Navigators: In an era of constant change, these leaders provide crystal-clear organizational direction. They prevent team disengagement by maintaining consistent, transparent goals and ensuring every team member understands their role in the bigger picture.
7. Balanced Feedback Craftsmen: Effective feedback is an art of proportion and timing. These leaders build a foundation of frequent, genuine praise, making occasional constructive suggestions not just acceptable, but welcomed as opportunities for growth.
8. Humble Continuous Learners: True leadership is characterized by radical openness to improvement. By regularly seeking feedback from their team, these leaders demonstrate vulnerability, showing that great leadership is about asking better questions and continuously evolving.

?Conlcusion: Make the Choice to Inspire

Leadership is not a title—it's a profound responsibility to create an environment where talent can thrive.

The data is clear: your leadership directly impacts your team's retention, motivation, and success. Every interaction, every decision, every moment of genuine connection can be the difference between losing a valuable team member and cultivating a loyal, high-performing professional.

The choice isn't just about reducing turnover—it's about building a workplace where people don't just want to work, but where they are inspired to contribute their very best. As a leader, you have the power to make that choice.

?- Joe Folkman

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ABOUT THE AUTHOR

Joe Folkman is globally recognized as a top leader in the field of psychometrics and leadership.?He is the co-founder and President of Zenger Folkman, a firm specializing in 360 Assessments, leadership, and organizational development. He has over 30 years of experience consulting with some of the world’s most prestigious and successful organizations, public and private. As the 2021 recipient of ATD’s Distinguished Contribution to Talent Development Award, Joe was recognized for his extensive research and contributions to the learning and development industry. He is a best-selling author/co-author of nine books, including his new bestseller, The Trifecta of Trust. and a sought-after speaker, consultant, and executive coach with the ability to connect with audiences through compelling research and inspiring stories. Joe is the co-host of The 90th Percentile Podcast.