Sometimes described as ‘churn’ sometimes as ‘turnover,’ no euphemism can disguise the problem. At a time when the competition for talent is acute too many organizations suffer from good employees quitting voluntarily. Poor retention of competent staff is a problem the C-suite may be worried about but it is a worry they often find difficult to connect to effective action.
Research into the managerial dynamics underling employee turnover reveals the extent to which the relationship between senior managers, not with the line employees they rarely have contact with, but with mid-level managers, particularly women, can be crucial. The research by Professor Ray Friedman of Owen Graduate School of Management, Vanderbilt University, Ying Chen of the University of Illinois, and Tony Simons of Cornell University, incorporates a ‘trickle-down’ perspective on the conventional research on the effect of middle management supervision on employee retention.
The research suggests that rather than just focusing on the interaction between middle managers and their staff it is important to also consider how mid-level managers’ satisfaction with senior managers’ supervision relates to the loyalty of line employees. The authors found a trickle-down effect and also found that this was stronger for female than male middle managers.
Immediate supervisors play an important role in constructing positive work environments maintaining good staff morale, encouraging employee engagement and ultimately making employees more likely to stay with the organization. This new research shows how senior managers, who have no direct contact with line employees, can also affect the loyalty of line employees by improving their relationship with middle managers, particularly women, creating a positive vibe that trickles down to line employees.
A key application of this understanding is that the interventions to reduce churn can target not just at the hundreds of line employee/supervisor relationships but also the many fewer senior-manager/middle-manger relationships. Another application comes from the light this study sheds on the ongoing debate over ‘female advantage’ in leadership by examining not just how women are treated, but how their experience may reshape managerial dynamics.
The researchers argue that for female middle managers, who face greater career and support challenges in the workplace, the way senior management treats them can be especially consequential, making it even more likely that their own treatment of subordinates will be affected by their experience of senior-level managers. This means that the trickle-down effect, when women are middle managers, is particularly strong and implies that managerial interventions designed to reduce line employee turnover require special attention to gender issues among middle managers.
The cost of employee turnover is considerable. It can be a challenge for all industries, but has been an especially serious concern in the hospitality industry where it has been estimated that the turnover rate is among the highest and can easily exceed 50% for entry-level employees. The authors offer this vivid example of the cost of poor staff retention: ‘Research has shown that for a front desk associate position, the cost of turnover can reach $6,000, and that by reducing the turnover rate from 50% to 25% for a 30-member front desk team, the hotel not only can save almost $50,000, but can also improve service quality and customer satisfaction.’
The findings of this research open new avenues for addressing turnover issues for senior leaders in organizations of all types. Recruiting competent talent is difficult and expensive, losing it is just wasteful.
Access the full research paper: The gendered trickle-down effect: How mid-level managers’ satisfaction with senior managers’ supervision affects line employee’s turnover intentions, Career Development International, Vol.19 Issue:7, pp.836 - 856