The surprising cost of under-performing managers

Hiring is hard.  Dealing with under-performing employees is exhausting. Firing is stressful.

So, you’re often tempted to take the easy path. This might mean giving up on finding anyone better and just hiring the best who applied. Or blaming yourself or a lack of resources for an employee who fails to deliver. Or postponing termination in the hopes that the employee will improve, or out of fear you won’t find someone who can do better.

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But keeping a poor performer on staff, the so-called easy path, can do more harm than good. Here’s what a poor manager can cost you:

Staff morale: Morale is a huge factor in business success. Happy employees typically work harder, are more innovative, and achieve better results. Unhappy employees stagnate, self-destruct, and usually leave. Fixing a morale issue is infinitely harder than preventing it in the first place.

Staff attendance: Employees who aren’t engaged and happy tend to take more days off work. It might be because they truly need a mental health day, or they could be off interviewing with your competition. Absenteeism costs you in missed opportunities, sick wages, and possibly temporary staffing costs. As a side effect, absenteeism leads to even more poor employee morale because other employees have to pick up the slack.

Customer experience: Indirectly, bad managers affect customer service by the decisions they make, perhaps by not keeping promises or making frequent changes. They could tie employees’ hands regarding decisions or cause them to treat customers poorly. Customers can smell bad management, so don’t assume your issues are under wraps.

Growth and innovation: Employees want to grow and learn and have career opportunities. At companies with poor management, employees stop striving for those things; if every day is a struggle just to stay at work, they don’t care about expanding their skills. And when employees stop trying, they stop innovating as well.

Business efficiency 

A good manager makes employees rise up and perform to the best of their abilities. Employees will have pride and will care about their work and the work environment. They will probably take better care of tools and equipment, keep their area clean, and have a better eye for safety.

Poor management causes reduced profits and increased costs. It’s imperative you don’t let a bad manager continue unchecked until your business and employees are in ruins.

So what can you do to avoid bad managers? Here are some strategies.

1. Mentor within. Promoting from within is always easier, and when done right can be tremendously effective. But it requires care and feeding. When employees show potential for a long career path at your company, particularly for management, get them started on a development plan that will develop them into a GM. When the time comes to promote, identify the knowledge required and build the expectation of mastery of those skills into time-based performance expectations.

2. Don’t hire someone who has had difficulty saying no to demanding employees or has a team that tends to be able to talk them into anything

3. Know the risks of hiring someone from outside the industry with no idea about your world—it leads to bad feelings and may drive longtime employees into leaving.

4. Don’t abdicate your responsibilities. You need to train and develop your GM to truly set them up to succeed.

5. Don’t quash every idea your manager has. You hired them to bring in fresh ideas; explain why you have concerns, but recognize and implement good ideas.

Hiring and keeping poor managers can drive away good employees and even good customers, directly impacting your bottom line. Take the time to recruit and appoint leaders who understand the industry, who are open-minded, are detail-oriented, and have great communication. Sometimes those skills can be found inside your company; other times you’ll need to extend your reach a lot further. Either way, commit to hiring only the best leaders.

Rikka Brandon is the founder and Chief Executive Recruiter of Building Gurus, a boutique executive search and consulting firm that works exclusively with building product manufacturers and distributors to find, hire, and retain top building products talent.

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