5 Reasons Why Good Leadership Increases Employee Retention

One of the many reasons why good employees leave companies is bad managers. As per Udemy, about 50% of employees have said to call it quits with a job because of a bad manager. No matter how much an employee loves their job or how much they are getting paid, if an incompetent manager is leading them, they would likely look for opportunities elsewhere – even if they have to take a slight financial hit. This proves just how crucial good leadership is, not only for the company’s betterment but also for increased employee retention. 

Considering the trends, acquiring good talent has become increasingly difficult. If you have acquired it, the challenge is to keep them happy. One of the best ways to ensure employee satisfaction and retention is good leadership skills from the manager. Investing in improved managerial skills can take a department or an organization to new heights of success, mainly through talented and skilled employees. This guide underlines five reasons why good leadership skills increase company employee retention. 

What Is Employee Retention?

Employee retention refers to retaining talented and productive employees and reducing employee turnover by creating a positive and healthy work environment that promotes engagement, personal and professional growth, competitive pay and perks, and encouraging positive work-life balance. Increased employee retention is one of the key objectives of any company, especially in this era of heightened competition between companies for talent. 

Employee retention is crucial for team building, increased productivity, and improved ability of the company to achieve its goals and mission. Losing talented employees is one of the biggest losses for any organization, which is why they strive to ensure high employee retention. The best way of guaranteeing that is by having effective leaders on board who possess the necessary skills to keep the employees inspired and happy. 

5 Reasons Why Good Leadership Increases Employee Retention

Here are the top reasons why good leadership is vital in increasing employee retention. If you want to learn more about leadership, check out the Peaceful Leaders Academy.

Good skills Foster an Excellent Work Culture

A good work culture fosters a healthy learning environment for employees. If employees can thrive in an environment, they are not likely to leave it. Leaders have a massive impact on the work culture of a company. They are the ones who set the agenda, prioritize tasks and work, and manage, delegate and lead the workforce. As they say, with such great power comes great responsibility. If a leader can set a healthy vision, mission, and purpose and inspire the employees under him to achieve those, they can keep the employees happy and satisfied. A good leader should be able to help their employees achieve both professional and personal success. One of the best tips to improve the work culture in your organization is to set clear-cut objectives for your employees and guide employee performance to achieve those objectives. 

The employees should have a work environment where they can learn and grow while helping the organization with its goals and mission. Moreover, they should also come up with inclusive practices and diversity initiatives to make everyone feel included, seen, heard, and acknowledged. 

Good Leadership Engages the Workforce and Increases Employee Productivity

By not treating their workforce as mere puppets to follow orders but actively engaging them in day-to-day tasks, a manager can win the trust of their employees. With strong trust between the employees and the leadership, the company’s productivity would witness a sharp spike. With higher productivity comes more innovation and increased revenue. It all boils down to how well a manager can inspire their employee to do better by engaging with them healthily. 

The best way to do so is always being accessible to the employees and encouraging effective communication. Managers should communicate the employees’ expectations effectively and create an environment that allows them to reach those expectations. 

Good Leadership Instills Motivation in Employees

Motivation is never ever-going. It’s normal for employees to feel uninspired at times, usually because of the mundanity of the work or other reasons. This is where influential and effective leaders can help the employees and the organization the most. A good leader, be it in any field, should be able to inspire subordinates. This can be done by showing the employees that their managers have faith in them. 

Being open to feedback is one of the best steps you can take as a manager, as it allows you to hear how you can better manage your employees and improve their productivity directly from them! The biggest motivator for employees is the feeling of being seen and heard. Reiterating that you are all ears for your employees’ problems, queries, and complaints can give them a positive push in the right direction. 

Managers can also research specific things that can motivate their employees and strive to deliver the goods to keep them motivated. Again, feedback is an excellent tool for this. Ensure that your employees have all the resources they need to thrive in the work environment, and your company’s employee retention will increase. 

Good Leadership Helps in Beating Corporate Burnout

Corporate burnout refers to physical and emotional exhaustion that stems from a sense of dwindling accomplishments and other stimuli. This work-related stress can immensely hamper employee productivity and motivation. Managers who are well-versed in the symptoms and treatment of corporate burnout can help employees navigate the issue. This shows that the managers care about the physical and mental well-being of the employees. Employees tend to stick to leaders who help employees manage their work stress and are open to discussing the causes of burnout. 

Good Leadership Helps in the Training and Development of Employees 

Corporate employees love a work environment where they can train, develop, and grow. Providing them opportunities to hone new skills and improve their current ones would motivate them to stay in the same environment, as it gives them room to thrive. They are more likely to move out of an environment where their growth is stunted. For increased employee retention, leaders should be focused on training and developing employees through different plans and initiatives. This would help the employees and the company, as they would have a talented and up-to-date workforce. 

What Leadership Skills Are Important for Increased Employee Retention?

There’s this saying in the corporate world, ‘people don’t leave jobs; they leave managers.’ One of the prime reasons employees feel compelled to leave managers is their lack of leadership skills. If you want to be a good leader, you have to inculcate some crucial skills. Soft skills are especially important for leaders. It refers to the social and emotional skills that leaders must possess to lead their teams more effectively. They are different from technical or “hard skills.” 

While hard skills are very important for any job, developing soft skills can help an individual, especially a leader, perform their duties better and earn their employees’ trust. Here is a rundown of the leadership skills that are important to create a healthy work environment and increase employee retention at the company. 

• Communication skills 
• Nonverbal communication
• Ability to effectively say ‘no’
• Problem-solving skills 
• Critical thinking 

These are only a few soft skills leaders must possess to keep their employees engaged and retain talent.