Executive Corner…..
By Julie Adamen 

How many companies have folks with the title Vice President? District Manager? Supervisory Manager? Well, almost any management company of any size has one or more people in these positions. But out of all of them – how many manage only managers? Based on my experience, very, very few of these positions are totally supervisory. This is because many of our companies are still stuck in an old industry thought-process: If you aren’t bringing in money (read: managing accounts), you are costing money. Well, yes and no. Yes, it may appear as if a dedicated supervisor who manages only managers and not accounts is costing us money up front. But in reality, a dedicated supervisory manager can and will save your firm tens of thousands of dollars in one very important area - turnover. SO, what DOES turnover cost?

Between 25% and 200% of that person’s annual wages.

Figured at a (very) conservative 35%, an employee making
$42k per year costs you $19.845.00

when they leave your firm. This cost is almost always so well hidden that upper management never really acknowledges it. One will never see a line item on the company balance sheet for this cost. But if there were a line item under “turnover”, you can bet that dedicated middle management would begin to look like a bargain.

But WHY do employees leave their employers? In our industry, the two main reasons are a lack of support and a lack of training. This is due to our industry’s global lack of dedicated middle management, or supervisors who do nothing but supervise managers (and support and train them) – not supervise managers and manage 6 accounts. Why is that so important? Here’s why:

• SUPPORT- 50% of an employee’s job satisfaction is determined by the quality of his/her relationship with their supervisor.[1]

• TRAINING - The emphasis an organization places on developing the skills of its employees will have an impact on turnover. A survey of 1000 companies with 50 or more employees conducted by the U.S. Department of Labor’s Bureau of Labor Statistics found a negative correlation between a company’s turnover and its level of training expenditure. Companies with low turnover rates spent more than twice as much on training those with high turnover rates.

If our supervisors are giving 50% or more of their time to the accounts they manage, how will that effect an employee’s job satisfaction? Considerably. A supervisor dedicated to managing and continually training managers is able to focus all their energy on the company’s most precious and expensive asset: its people. And the result of that dedicated supervision is called The Pygmalion Effect.

The Pygmalion Effect

• Every supervisor has expectations of the people who report to him/her.
• Supervisors communicate these expectations consciously or unconsciously.
• People pick up on, consciously or unconsciously these expectations from their supervisor.
• People perform in ways that are consistent with the expectations they have picked up on from the supervisor, affecting self esteem and thus performance.

More good things about effective supervision:

• Enables the employee to participate in potentially successful projects that bring continuous improvement to the workplace.
• Provides one-to-one positive coaching with the employee.
• Provides developmental opportunities that reflect what the employee is interested in learning because they are paying attention.
• Holds frequent, positive verbal interactions with the employee and communicates consistently a firm belief in the employee's ability to perform the job.
• Keeps feedback positive and developmental where possible.
• Makes sure the employee is receiving consistent messages from other supervisory personnel. How we speak to others about employees powerfully molds their opinions.
• Projects your firm’s sincere commitment to the employee's success and ongoing development.
• Continuity – The client knows someone at the company other than the manager
• Marketing – Clients and potential new staff
• Allows the owner/executive to do what they should be doing
• Affects your bottom line

When our industry finally makes the correlation between quality, dedicated supervisory personnel or “middle management” and employee retention, we will begin to slow our rate of turnover and indeed attract a higher quality of employees to our business. And isn’t that worth reaching for? 

Additional References and Sources:

www.humanresources.about.com

www.isquare.com