It’s a well-known fact that the cost of retaining employees is a fraction of the cost of new employee acquisition. According to the United States Department of Labor, employee turnover costs companies upwards of 33 percent of their yearly salaries – sometimes even more, when you consider all the peripheral costs.

For example, jobs that are more complex and require more specialized training can result in even higher costs. As the salary, skills, and responsibility increases, so does the cost of attrition, often climbing to 30 percent or more, even if the position pays a lower base salary.

This is a significant number, and one that should concern most employers, because currently, every year, about one in five will voluntarily leave their job. An additional one-sixth will leave because they are fired, laid off, or let go for another reason. If the employee is what you would consider a “bad hire,” the cost can be even higher.

But even a good hire—the kind that ticks all the boxes on your wish-list and then some—comes with some caveats. Statistically, almost half of all management hires are doomed to fail within the first 18 months. The cost of turnover here has nothing to do with a bad hire, per se, but it can still cost you about 20 percent of the individual’s annual salary.

Though every situation is different, many cases point to a lack of support, whether in the onboarding phase or with training in general. Mitigating the risk of losing a good manager requires a high-quality training program.

Why You Need a New Manager Training Program

For any employee to succeed in their job, adequate training is critical. If the employee is a manager, this is even more crucial as there is quite a lot more ground to cover. Managers need to know aspects of business operations that the average employee does not, and a newly hired manager all the more.

To excel at their job, managers also need to understand how what they do fits into the bigger scheme of things – in other words, how their contribution impacts the success of the entire team.

If a manager lacks this basic understanding, it can have a negative effect on the people that they manage. The impact on morale, productivity, efficiency, communication, and all-around job satisfaction can send ripples through the entire organization.

On the other hand, a well-trained manager will improve employee retention, foster more open communication, inspire productivity, innovation, and collaboration – not to mention a marked reduction in attrition throughout the ranks.

Why Companies Ignore New Manager Training

So, the question remains: if new manager training delivers these significant benefits, and if the lack of it results in a multitude of negative consequences, why do so many companies ignore it?

In many cases, the answer is simply that they do not have the budget for it. However, these organizations do seem to have an allocation for senior manager training, team building, new technology enrichment, continuing education, and so on.

Senior management sets a budget based on their own needs for improvement, often overlooking the investment that could—and should—be made into their middle-management and new manager training program.

The Benefits of New Management Training

Every new manager should have the advantage of quality training. A well-trained manager can speak to the mission and vision of the company and communicate that message to their team. Good communication leads to happier employees all-around, improving retention throughout the organization.

When they are well-trained early on in their tenure, a manager will be comfortable and confident in their duties. They will require less oversight from other managers and will be able to get up to full speed more quickly, ensuring optimum levels of productivity at scale.

The Risk of Not Having a New Manager Training Program

Perhaps the biggest risk of not having a new manager training program is attrition. If an employee feels like they haven’t been given the tools they need to do their job adequately, they will eventually leave.

This is also true for non-management employees, as the number one reason most people leave their jobs is because of their direct manager. Since this is the person they interact with the most, it’s a critical relationship, one that can make or break a team.

Poorly managed employees tend to be disengaged, which makes them more likely to quit. Actively engaged employees are 75 percent less likely to leave their jobs, indicating that more effective management is a viable solution.

How Even a Small Company Can Vastly Improve New Manager Effectiveness

No matter what industry you are in or how big or small your company is, there are many things you can do to improve new manager effectiveness.

1.      Strongly encourage regular one-on-one’s between new management and direct reports. The first 90 days are especially critical as they set the tone for what’s to come.

2.      Proactively allocate time each month to personally reflect on management, in terms of both cultural and operational performance. This can be done privately, like through journaling, or with a mentor, such as an executive coach or trusted advisor.

3.      Set aside personal development time to read and/or watch management content to improve understanding of these concepts. There are a million resources on the web for free. If you’re doing step two, add some new information to your monthly reflections.

Finally, think about bringing in an outside resource to run or design a new manager training program that can be templated for future managers. To get started, schedule a free chat with Learn to Scale today.