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Why great managers are the best answer to the labor shortage, according to BCG

Why great managers are the best answer to the labor shortage, according to BCG

We kind of already knew it, but data from a recent survey conducted by Boston Consulting Group (BCG) is unequivocal: The most effective strategy for companies to retain talent advantage is to invest in making great managers. They are key to employee satisfaction and retention.

However, after nearly three years of COVID-jockeying and subsequent staffing shortages, many managers seem as burned out and restless as the employees they supervise.

We surveyed some 4,700 workers in a variety of industries and occupations in the U.S., France, Germany, and the U.K. Approximately a third of the respondents were managers–but they all had one thing in common: they are all “deskless” workers, the 70% to 80% of the global workforce employed in hands-on occupations where the work can’t be done remotely—and place and time are essential.

The most important driver of any individual staying or leaving his or her job is emotional

When we asked respondents what’s most important to them, the top five answers they gave were (in order) better pay, work-life balance or flexibility, better benefits or perks, work they enjoy or care about, and better commutes. In other words, mostly functional benefits.

However, when we analyzed what is actually driving their decision to stay or leave their job (using correlation analysis) we found that the decision is based primarily on emotional factors. The top drivers of staying or leaving, the survey showed, were (in order) feeling fairly treated and respected, feeling valued and appreciated, doing work I care about or enjoy, having a good relationship with my manager or boss, and the day-to-day work environment.

In other words, what employees say they want (more pay, better work-life balance) isn’t necessarily always what they act on (feeling valued, supported, and respected).

These emotional needs must be delivered by day-to-day managers

For most workers, the best day of any week–even better than payday–is when their immediate boss pulls them aside and says, “Great job! I don’t know how you did it, but you did it.” There are many versions of this, of course. Anyone who’s ever been on the receiving end of such a compliment knows what a boost it can provide.

Conversely, a terrible day for most workers is when they feel overlooked, criticized, or put down. Bosses are poisonous when they publicly criticize team members, scream or throw things (including tantrums), or blame or shame others for problems that are theirs to fix.

Managers with great people skills act as organizational glue, binding employees to their jobs and work. The opposite kind of manager is a repellant, chasing people away. The survey data strongly confirmed this, showing that respondents dissatisfied with their managers are: 1.5 times more likely than satisfied workers to feel burned out, twice as likely to leave their job within a year, and three times less likely to recommend their current employer as a desirable place to work.

An individual’s immediate day-to-day manager, therefore, is critical.

The most valuable managers listen, communicate clearly, and care

The survey also showed that it’s more than an occasional pat on the back that distinguishes an effective manager from a corrosive manager.

As part of the survey, we asked respondents to identify the qualities they value most in a manager. Most respondents identified a small cluster of characteristics. Namely, managers who listen to them and respect their input and suggestions, managers who are truthful, transparent, and communicate clearly, managers who provide support when needed, managers who care about them personally and professionally, and managers who recognize and praise a job well done.

That’s a lot to ask of a manager–especially when most managers have additional objectives to worry about, such as meeting production schedules and targets, conducting employee evaluations, and other duties appropriate for their role.

Developing great people managers must be a priority

Great managers typically are made, not born. The mission of every organization should be to invest in the development of great managers who really care about the people who report to them and genuinely try to show it every day.

The managers we surveyed in October said they already had their hands full, with staffing shortages and underperforming team members. Some are also struggling with the art and science of managing–lacking the skills to motivate team members and build a positive team culture–which is new to many of those who found themselves managing teams for the first time when COVID-19 disrupted their workplaces.

If you think about it, that’s understandable. Managers typically are created by promoting workers out of their comfort zones and competencies. They are taken from being individual contributors (doers) to leading people. This involves a massive change in outlook and skill sets.

For some, these skills may come naturally and may have been developed, in scouting, school, athletics, or the military–but not for others. They’re just given a promotion and, more often than not, they’re on their own. That’s because historically, organizations haven’t invested sufficiently in helping them successfully transition from the role of worker to that of supervisor.

Breaking the vicious cycle

This has created a vicious cycle. On the one hand, millions of deskless workers have been or are planning to quit their jobs, largely because they are not getting the emotional reward from their jobs and managers who might convince them to stay.

On the other hand, the very people best positioned to provide these benefits–day-to-day managers–don’t have the time or the ability to deliver what workers crave. The result is what you see today: high turnover, short staffing, and unskilled workforces that are hurting operations.

Organizations can disrupt this vicious cycle by investing more thought, time, and resources in developing great people managers. Here are our recommendations:

  • Free up managers’ time. Managers participating in our October survey indicated that they’re stressed. Try to lighten their burden by offloading some of their day-to-day administrative duties to HR or by automating paperwork. Simple steps could involve moving HR staff from their offices to a table with an “Ask me anything” sign in the workers’ breakrooms to help alleviate the barrage of daily questions managers get from their teams.
  • Help them develop the skills they need to address their workers’ emotional needs. The best way to do it is by identifying your organization’s best people managers and asking them to teach their peers. This must take place across the entire organization, from the managers with direct contact with deskless workers to senior leaders with the most contact with deskless managers. In every case, the mission should be to lead by example. Consider bringing in retired or veteran employees to help with training, coaching, and mentoring.
  • Make emotional connections early on. Onboarding should be more than just filling out paperwork, being assigned to a workstation, and meeting coworkers. It should also convey a strong message: “We’re glad you’re here.” You can accomplish this by having one of the senior managers welcome every new employee, sending a “can’t wait to meet you” video or welcome packs to their homes before they start (including swag for the family), and having frequent one-on-one meetings with new employees for the first few months they’re on the job to see how they’re feeling about things as they get up to speed. First-day buddy assignments and lunch also help build connections.

Great talent always matters, perhaps now more than ever. Great managers matter even more because they can help you attract and keep the kind of talent that gives your business a decisive advantage.

Julia Dhar is a fellow based in the Boston Consulting Group‘s Boston office and a managing director and partner. Deborah Lovich, a Boston-based managing director and senior partner at BCG, leads the firm’s global initiatives on the future of work. Nick South is a managing director and partner at BCG’s London office. Sebastian Ullrich, a BCG managing director and partner, based in Dusseldorf, Germany, is BCG’s European leader on Future of Work.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs ofFortune.

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Greg Aftayev

Greg Aftayev is a Journalist at Flaunt Weekly Covering Tech News.

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