Bad Bosses are Bad for Business

There has been a lot in the media lately about bad bosses, largely due to the new film ‘Horrible Bosses’. This article isn’t about the things that bad bosses do, it’s about what bad bosses are costing businesses. Incompetent managers, supervisors, and team leaders cost businesses real money due to high staff turnover, low productivity, and lack of innovation.

Consider this example. Ellice had been working an average of five hours of unpaid overtime a week, until she arrived at work 15 minutes late one morning due to bad traffic. Rather than having a professional and calm conversation with her about her tardiness, her manager “ripped into me the second I walked in the door like an irrational toddler, and then stormed off without giving me a chance to say much.” As a result of how the situation was handled, Ellice now arrives on time every day; however, she also takes the full lunch break she is entitled to, and leaves at exactly 5pm no matter what work needs to be done.

Calculate the cost of this manager’s action. If Ellice is paid $30 an hour, five hours a week is worth $150. That’s $7800 a year in wages the business had been getting for free and has lost. But there is also a less tangible cost. An employee who feels valued, appreciated, and respected is far more likely to deliver superior service, implement innovative new ideas, and spend their time productively than one who doesn’t. It’s very difficult to calculate the value of losing that mind-set and approach.

Kylie tells the story of a manager under pressure, who was blamed by his superiors about things that were out of control. Not knowing how to deal with the stress, he gathered all the staff together and “attacked us individually in front of everyone. Not about our work performance, about our personality and traits. It was embarrassing and basically just uncalled for”.

The effects of this abhorrent behaviour by a manager are wide-reaching, and long lasting (and obviously occuring at different levels of management). Staff that have been put down in this way are highly likely to complain about their employer to their family and friends, losing potential customers. They are also probably delivering poor customer service, and may even lose current customers. No one wants to go to a business where the staff are obviously miserable. The value of a customer varies according to the industry, but I don’t know of any business that can afford to lose customers in this way.

In another workplace, Anna was yelled at for 30 minutes for a minor programming error. She says, “The worst part was that the person meant to test it (who obviously hadn't even bothered) didn't get in trouble at all - even though the issue was entirely their fault. They were buddies with the manager. By the end of those 30 minutes I had made my decision to go.”

It’s estimated to cost 150% of an employee’s salary to replace them. This includes the cost of recruitment, inducting new staff, training, and the time it takes for a new hire to reach the level of experience lost. Bosses who treat their staff as easily replaceable will get exactly that: staff that are easily replaceable. Easily replaceable staff put in minimal effort, and are barely competent. Successful, high achieving staff are not easily replaceable, and need to be treated that way.

There are a couple of ways to address the issue of bad bosses. In large organisations that suffer from this problem, recruitment and promotion processes need to be improved to stop these bad bosses becoming bosses in the first place. In small businesses, the boss is usually the owner, and has no one else to answer to. Hopefully, they don’t run out of staff and customers before it’s too late.

Secondly, training is essential for all managers, supervisors, and team leaders. Training isn’t going to cure the one in 25 bosses that is a psychopath, as reported this week. But communication skills, giving and receiving feedback, and the ability to coach and mentor others can be learned. Workshops, online training, and numerous books are all available. If a manager has eight or ten direct reports, management training ripples through the whole team to help them all. That’s quite a return on investment.

Bad bosses are bad for business, and that’s unacceptable. Businesses that have the right people in the right roles, with adequate training, are better places to work, and therefore better financially.