“Weak” leadership costing British firms £4.1bn per year

Interviews carried out by recruitment firm Randstad with more than 10,000 British workers shows that weak leadership is actively pushing people out of their existing organisations, at a significant cost. 

For 25 per cent of workers, weak leadership is one of the most important factors when changing employers.

The CIPD estimates that the cost of replacing an employee is ?4,800. The research shows that, currently, 19 per cent of employees in Britain change employers every year, with 15 per cent moving voluntarily and the other 4 per cent being made redundant.

If weak leadership is a contributing to factor in 25 per cent of voluntary job moves, 3.75 per cent of the country?s employees are moving jobs every year because of weak leadership.

With total UK employment up 609,000 last year, to 30.9m, and 73.14 per cent of the workforce in full-time employment (22,597,000 people), weak leadership is therefore costing the UK?s employers over ?4.1bn every year in staff turnover alone.

“A fundamental problem”

?There is a fundamental problem with leadership in the UK ? and it?s costing the country a huge amount of money,” says Mark Bull, CEO of Randstad UK. 

“Bosses just aren?t delivering. Management culture needs to be in line with employee culture, and at the moment employees don?t see that and this can trigger departures. Too often company values aren’t clear, demonstrated or promoted by management ? and that?s pushing a huge number of employees to switch jobs.

Weak leadership is also a factor for more experienced workers. When asked what factors contributed to their decision to look for a new career opportunity outside of their former organisation, 40 per cent of 45-65 year olds said weak leadership was one of the top three most important factors. 

These experienced employees are more likely to hold professional and managerial positions, which the CIPD estimate cost 46 per cent more to replace ? approximately ?7,000 ? making weak leadership even more costly.

“Younger workers are so determined to make it to the top right now that they believe they need to move on to move up. As a result, leaders invest a lot of time in them. This may well have caused some bosses to neglect the ?older? generation in favour of investing time, training and attention in the young and hungry to keep them on board,” adds Bull. 

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