When Leadership Fails: Why Employees Leave and How Better Leadership Can Retain Them

"An employee doesn't quit their company; they quit their manager." This is a statement I wholeheartedly endorse—not just as a leader who manages a business but also as a recruitment consultant with over 12 years of deep insights into various companies. And, of course, exceptions prove the rule.

The Numbers are Clear

When we examine the majority of resignations, it becomes evident that most people leave their jobs because they need help getting along with their managers, suffer from poor leadership, or are frustrated with unfulfilled promises regarding development paths. A 2023 Gallup study confirmed my personal experience:

• 45% of surveyed employees are actively looking for jobs or at least open to new opportunities.
• Only 14% of respondents experience a workplace characterized by positive leadership and thus feel a strong emotional attachment.
• 79% of employees with a solid attachment to their employer plan to stay for at least another year.
• In comparison, only 53% of those with low attachment intend to remain with their company for another year—down from 78% in 2018, and this number has declined every year since.
• Only 24% fully agreed with the statement that they trust their senior leadership—an all-time low.
• "My manager focuses on my strengths and positive traits"—only 27% of respondents fully agreed with this statement. More on this later.

These figures are alarming from a human perspective, but they also come with high financial costs. High employee turnover results in significant expenses for recruiting and onboarding new employees. Even when dissatisfied employees stay with their companies, the resulting loss of productivity adds up to as much as €167 billion annually in Germany alone. Globally, Gallup estimates the cost at $9 trillion—equivalent to 9% of global GDP.

60 Minutes Are Enough to Assess Leadership Skills

As a recruitment consultant, I can gauge how well a department is managed within the first 60 minutes. I walk into a company and immediately sense the atmosphere. I observe whether people are engaged, talking, and laughing. The result can vary greatly between departments, as the atmosphere a visitor perceives is directly influenced by the leadership in each area.

A leader's effectiveness is tied to their talent for leadership and their willingness to practice, develop, and expand their knowledge. My personal approach to leading my team is centered around three elements:

• What potential does each individual bring to the table?
• How can I motivate and retain each team member?
• Am I setting a good example?

Potential Analysis

To uncover the potential within your employees, leaders should regularly discuss the following points in one-on-one meetings:

• What are the employee's strengths and talents?
• What professional and personal challenges are they currently facing?
• How is their relationship with colleagues and other managers?
• What professional goals does the employee want to achieve in the coming months?

It's important to align this with the manager's expectations: What goals should the employee achieve? What performance is expected? Ideally, both parties work with concrete metrics, allowing for reference in future discussions.

Managers should be able to derive the following:

• What potential does the employee have in their current position?
• What potential do they have for a higher position within the company?
• What potential exists for tasks that no one may be aware of yet?

Employee Motivation

Returning to what we learned from Gallup: Only 27% of employees report that their manager focuses on their strengths and positive traits. Strength-based management is critical in motivating employees and fostering loyalty to their manager. This requires paying close attention, showing appreciation, and offering future perspectives. Employees who experience this have little reason to seek another employer.

Questions that leaders should regularly ask include:

• What tasks does the employee excel at?
• Where do they encounter difficulties?
• On which task did they achieve the best results?
• What was the main reason for their top performance?
• How is the employee's general well-being?

In addition to such discussions, some basics should always be clear:

• The manager should always be open to problems.
• Regular discussions about the employee's development and prospects are crucial so they know their career is a priority.
• Managers should also show interest in their employees' personal lives. For example, if a child was sick last week, asking about their well-being the following Monday is appropriate and shows genuine concern.

One point is significant to me, and I am inquisitive to hear your thoughts on it:

When employees tell me they are seeking new challenges that our recruitment consultancy cannot provide, I actively help them find a new employer. Good leaders must be willing to let their people go when necessary.

Leading by Example

Leaders are role models, whether they want to be or not. This applies to work ethic, communication skills, and how they interact with the team. It also extends to how positively or negatively a leader views the future and works toward achieving success. According to Gallup, only 25% of employees fully trust their managers to navigate future challenges. Before COVID-19, this figure was 41%. A lot has been lost—but fortunately, the right strategies can repair this damage.

I'm eager to hear your experiences: How do you prevent resignations, retain your employees, and maintain a good relationship with them? Have I missed an important aspect?

LinkedIn is a platform for professional exchange, so I welcome any comments and insights on this topic! I'm also happy to connect via video call .