Contractor Tip Of The Month: People Don’t Leave Companies, They Leave Managers

Damian Lang

It is hard to find good employees these days. Once you do find them, it’s just as hard to keep them.   

So what happens when a good employee leaves your company? One thing is for sure. Unless they can be replaced with another good employee, there is a huge price to pay. Studies show the costs associated with training a new employee can be as much as the employee’s annual salary.   

With 250 employees and five main companies, as chief executive officer (CEO), I have only seven people who report to me. These are the presidents and top staff who have team leaders who report to them 

Even with the chain of command we have, I interact with many employees often, as I have always maintained an open-door policy. Anyone at any level throughout the companies can come talk to me at any time.  

One day, an employee dropped by to thank me for her time working here and let me know she was moving on to another company 

I have always been a big believer in exit interviews. What I have found is that employees on their way out tend to tell the truth about issues at our companies. After all, they are leaving the company anyway, so there are no repercussions from telling it like it is.  

So I asked the employee where she was going to work. To my shock and surprise, she said she was going to another company that I know offers lower pay and fewer benefits.  

I prodded further by asking why she was leaving, and she told me there were management issues.  You can imagine that this piqued my interest.  

“What issues are you having? I asked.  

She told me that managers expect more without listening to her or the rest of the staff. Naturally, I dug deeper and asked if there were other reasons for her leaving. 

She said her department routinely hires temporary employees. Then the permanent employees have to keep retraining new temps when the old ones leave, and that causes a lot of stress.  

That was not all. She mentioned that people in her department sometimes take the blame for late paperwork that is outside of their control. She explained that one company is the main culprit, and although she has told management many times about the situation, no one holds those causing the issues accountable.   

“Is there anything else that we could have done that would have encouraged you to stay?” I asked.  

She told me that she is underpaid for the job she does. So I asked if she ever discussed a raise with her manager. She said she did about a year ago, and was told her pay was fair for her position and experience.  

Of course, it’s no fun to hear criticism about your company. But as a leader, it’s much better to know than not know. I asked if there was anything else I should be aware of.  

She advised that these issues have been going on for a long time, and made the job too stressful, so it wasn’t worth it. I thanked her for her service and wished her well. 

The next day, I met with her supervisor to discuss the situation and reasons the employee said she was leaving. He assured me that he was working with her to resolve the issues. And I found out the employee was due for a pay raise right before she put in her notice that she was leaving. 

Knowing her supervisor well, I was confident he would have fixed the issues with the time and breathing room to do so. However, this experience confirmed something I have always believed: People don’t leave companies, they leave managers. 

The manager is one of the best I have ever seen in his position, and there are always two sides to every story. But in general, I realized that with our companies experiencing such tremendous growth, and our managers having so much on their plates, perhaps employee relations isn’t as high on their priority list.  

Here are some things we all must do to help make sure our employees remain happy at our companies:  

  • Ensure everyone has a clear job description. 
  • Communicate with employees regularly to ensure they are happy in their position.  
  • Compensate them fairly. Pay should be at or above the rates for the position and job performance you are getting from them 
  • Listen to the concerns of your employees and address them.  
  • Give employees the freedom to manage their own department. Nobody wants to be micromanaged. Overall, it doesn’t matter how they do their job (within reason, of course), as long as they accomplish what you need.  

I fall short on these priorities just like everyone else. So I plan to meet with my direct reports and ensure I am doing these things for them and they are doing them for their teams. 

Now it’s your turn. Have you talked to your people lately to see if they are happy? Has everyone from the CEO right down to the newest employee who is just learning the job been evaluated to see if they are satisfied with their position? If you do so, your chances of keeping them on board will increase greatly, while reducing your need to search for employees to replace them.  

Damian Lang is CEO at Lang Masonry Contractors, Wolf Creek Construction, Malta Dynamics, and EZG Manufacturing. To view the products and equipment his companies created to make jobsites more efficient, visit his websites at ezgmfg.com or maltadynamics.com. To receive his free e-newsletters or to speak with Damian on his management systems or products, email:dlang@watertownenterprises.com or call 740-749-3512.