Magnetic Leadership = Employee Retention

Employees don’t work for companies; they work for people.

The more irresistible you are as a leader, the more pull you have for employees to want to stay and for your customers to remain loyal.

In my book, The Magnetic Leader, I write about the ROM (Return on Magnetism) organizations can achieve when they hire and cultivate magnetic leaders. Here are a three of the eight outcomes, that are pretty much guaranteed.

If you are going to put in the work to become a magnetic leader, then you probably want to know up front what kind of ROI you can expect. After reading this section, you will no doubt agree that the return on magnetism (ROM) is significant and well worth the investment.

Better Hires, Faster

Retired Biogen CIO Raymond Pawlicki was able to quickly differentiate himself from other CIOs through magnetism. Over the years, Pawlicki worked really hard to build a following. He made it a point to spend a good deal of his time out of the office. He made a name for himself and the company he worked for. He did so by volunteering to speak at conferences, visiting college campuses, and meeting with anyone who asked him for a few minutes of his time.

Whenever Pawlicki had a job opening in his department (and it was rare), he had a line of people waiting outside his door hoping he’d hire them. He shared with me that he had rarely paid a recruitment fee to an employment agency during his long career—something most of his peers could not say.

A year after Pawlicki’s retirement, I met several of his former employees, who were still lamenting the fact that they were no longer working for him. I told them to get over it. Pawlicki wasn’t coming back. Instead of complaining, they could honor him by giving their employees a work experience similar to the one Pawlicki had given them.

One guy took out his phone and made notes so he could remember to purchase the leadership books I recommended. He understood that the torch had been passed and that it was his turn to become a magnetic leader.

Magnetic leaders like Pawlicki have no problem attracting talent. I’m betting you know at least a handful of people like him. The cost of hiring people is minimal for these leaders. All it takes is one tweet or a call to a few employees they may have worked with in the past, and resumes start flying into their inboxes.

If you think about it, most third-party recruiters charge between 25 and 30 percent of an employee’s first year’s salary plus bonuses. Recruitment fees add up quite rapidly. Think about how much additional money will hit your bottom line annually when you are able to avoid going this costly route—not to mention the decrease in stress you will feel, knowing that you aren’t going to be involved in a bidding war for talent.

Off-the-Chart Employee Commitment and Staff Productivity

I was fortunate to have the opportunity to work for a magnetic leader. This leader had my full commitment, and the commitment of everyone else in the organization, in spite of the fact that we were paid significantly less than market rate.

You may be thinking, “Why on earth would you give someone your all, knowing that you could make a heck of a lot more money elsewhere?” But knowing what I know today, I’d do the same thing all over again.

This leader made it clear that we were on a mission to change our industry. He listened to our ideas and treated us with respect. We worked long hours and never minded doing so.

I had friends who were making tons of money working for big-name companies, but they were miserable. I looked at them every day and knew that my life was much richer than theirs, even if they had more money in the bank than I did. We were completely committed to this leader and the organization.

Reduction in Costly Employee Turnover

According to the State of the American Manager report by Gallup, approximately half of all workers have left a job to “get away from a manager.”

My bet is that none of these people were leaving a magnetic leader. Those who have run away from a bad boss will stick like glue to any great leader they find after experiencing what it’s like to work for a boss who actually repels talent.

Cost of turnover estimates for a single position range from 30 percent of the yearly salary for hourly employees (Cornell University) to 150 percent, as estimated by the Saratoga Institute.

The McQuaig Institute puts this into terms that most of us can relate to. A fast-food restaurant must sell 7,613 children's combo meals at $2.50 each to recoup the cost of losing just one crewmember. To recoup the cost of losing just one salesclerk, a clothing store must sell almost 3,000 pairs of khakis at $35.

How many of your products or services must you sell to make up for one employee?

These examples represent the cost of turnover, which encompasses replacement costs, training costs, separation costs and lost productivity.

You may be thinking that positions in your company are considerably more sophisticated than those found in fast food restaurants or retail organizations and that it's impossible to come up with a number.

But even an approximate number is better than no number at all!

? Matuson Consulting, 2021. All Rights Reserved.

Like what you're reading? Sign up for my newsletter, The Talent Maximizer?.