The Cost of Untrained Managers

Managers have been called “corporate America’s most neglected employees” because only 28% of organizations prioritize management development.

In a survey of 500 managers, only 33% had received nine or more hours of managerial training, and a startling 44% had received less than two hours. In fact, most managers do not receive training until they have been in a leadership role for almost 10 years! By then, it’s late to correct past mistakes and bad management habits.

Due to their lack of training, as many as 60% of new managers fail to launch well and subsequently underperform within their first two years on the job.

The cost of underperformance

An untrained manager can negatively affect business performance, employee job satisfaction, and overall organizational success.

According to Gallup data, productivity is a significant consideration in analyzing the cost of ineffective management: “Poorly managed work groups are on average 50% less productive and 44% less profitable than well-managed groups.”

In addition, managers account for at least 70% of the variance in employee engagement scores across business units, and teams with poor managers see 73% less revenue per employee.

The cost of employee disengagement

Disengaged employees are less likely to work hard, feel motivated, or meet expectations for their role, and they cause 60% more errors and defects in work performance.

Actively disengaged employees also cause disruption and dissatisfaction within the company. Even actively engaged employees can experience decreased morale if the overall team’s level of engagement falters.

A disengaged employee costs an organization approximately $3,400 for every $10,000 in annual salary. Disengaged employees cost the American economy up to $350 billion per year due to lost productivity.

The cost of high turnover

73% of actively disengaged employees are on the lookout for new jobs or opportunities. But the cost of turnover is extremely high. It’s estimated that losing an employee can cost a company 1.5-2 times the employee’s salary in replacement costs and lost productivity. For hourly workers, it costs an average of $1,500 per employee. For technical positions, the cost jumps to 100-150 percent of salary.

Low engagement leads to declining productivity, profitability, and retention. If these aren’t enough reasons to stop the practice of having poor managers, consider this: poor managers also lead to increased employee stress, major health issues, and even death.

Isn’t it time to take management development seriously?

Contact me for information on a cost- and time-effective approach to management development.

Question: How does a lack of management training impact your organization?


#management #motivation #humanresources #productivity

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