Why Employees Quit: Bad Management Habits of Business Owners

December 4, 2023 by Christine

As a small business owner, you understand the value of good employees. After all, they’re hard to find! But keeping those employees around is not just a matter of ensuring they get paid when they’re supposed to. Employees may ultimately provide several reasons they want to work elsewhere, but the answer to why employees quit often boils down to poor management or leadership. If left unaddressed, bad management habits can lead you to lose some of your most talented staff.

Why Employees Quit Due to Bad Management & Leadership

An employee’s relationship with their boss is often the thing that makes or breaks a job. For example, a fairly humdrum position can be made enjoyable through the efforts of a strong manager. On the flip side, a seemingly ideal job can be turned into an exercise in misery when the wrong boss is involved.

Good management is essential in the workplace, as it helps both employees and the entire business thrive. But the opposite is also true. A boss with bad management habits can drive away valuable employees and harm the business. 

Whether we’re talking about supervisors or small business owners, bosses have a tremendous impact on employees’ day-to-day lives. Higher-ups' actions (or lack thereof) affect everything from team members’ attitudes to their health. And if those effects are negative, employees are less likely to stick around. 

According to a study by GoodHire, 82% of U.S. workers said they’d potentially quit because of a bad manager. 

Why?

Today’s workforce has certain expectations for bosses. Employees are more willing to leave a position if those expectations aren’t met, even if they don’t have another one lined up. And they’re much more likely to resign if their boss (and therefore their job) is hurting their overall well-being. 

For example…

• They’re constantly stressed out.
• Their concerns about work-life balance go ignored.
• Their effort is unappreciated.
• They don’t feel supported or cared about.
• They feel unsafe in the workplace. 

Ultimately, many employees believe life is too short to work in a place with bad management. And they’re right. A great boss is critical to a healthy, positive working environment. If that component is missing, who can blame them for leaving?

7 Bad Management Habits of Small Business Owners

As a small business owner, a key element of your job is to do right by your employees. But if you have any bad management habits, you might as well be encouraging employees to start hunting for new work. Here are some behaviors, practices, and gaps to address if you don’t want to see your team dwindle…

1) Not Understanding a Key Metric

A small business owner hires employees to service the needs of customers. They expect their business to grow from that hire and from providing such a service. Just like a new product line or a new asset, new employees can and should add revenue, either by direct selling or by taking tasks away from another employee who does sell directly. This can be measured by a metric called revenue per full-time equivalent, which is calculated as a company’s total revenue divided by the number of its full-time equivalent. It shows how much revenue each regular employee generates. This ratio provides information on a company’s efficiency within the peer group.

What does this metric have to do with employee morale?

It is a tool to gauge employee effectiveness. Effective employees are those who are well-trained and in the right position—having fun!

2) Overworking Team Members

While wanting to get the most out of a great worker seems sensible, overloading employees can backfire quite easily. It leads to diminishing productivity, stress, and a buildup of resentment. Plus, when increases in responsibility are not accompanied by a promotion or raise, people are likely to grow disenchanted.

That’s why overworking team members is one of the top bad management habits to avoid.

Make sure you’re compensating your employees fairly for the level of work they’re doing. Moreover, you should regularly check in to see if they’re able to handle everything they’ve been assigned. Your team should feel comfortable coming to you if they’re feeling overwhelmed, and together, you should come up with solutions if the workload becomes too much.

3) Failing to Develop Good Relationships

Spending time working closely with employees should result in quality relationship building. However, many business owners are so fixated on productivity and making money that they fail to get to know their employees. Because this can come across as though they don’t care about their employees as people, it can have disastrous results when it comes to retaining good workers.

As a boss, you should…

• Teach
• Train
• Mentor
• Lead
• Develop
• Implement
• Bring results

And don’t forget that those who work for your business aren’t just your employees—they’re people.

4) Rewarding the Wrong People

Whether it’s a seemingly small reward (such as verbal acknowledgment of a project successfully completed) or a big one (a promotion), employees want to be recognized and rewarded for doing good work. And they deserve to be! Playing favorites, failing to stop and recognize hard work, and hiring and promoting inferior workers can hamper morale.

This also holds true with vendor and third-party relationships. Do not tolerate a third-party relationship that undermines the morale of your employees. Any partner you work with should be just that—a true partner committed to collaborating with your team.

5) Not Encouraging Employees to Be Better

Business owners who are not interested in giving their employees the freedom or the opportunity to learn new skills or take on new responsibilities are holding their employees back. But more than that, they’re limiting what’s possible for the business. Giving employees freedom and responsibility helps inspire them to improve and grow, increasing the likelihood they will be happy in their work.

If you’re not encouraging your team, they won’t be motivated to be better. Worse, they may become less engaged, eventually leading to their resignation.

6) Neglecting to Communicate Clearly

One of the most common bad management habits is poor communication. A study by LinkedIn Learning revealed that employees are most frustrated by managers with unclear expectations. Team members need to know what they’re doing and why. Otherwise, there will be a lot of confusion, low performance, and eventual loss of good employees.

As a business owner, you should never make assumptions about what your team knows. Instead, you should make the effort to state your expectations clearly and often. Each employee should understand what their role is and how it contributes to the business’s success. This goes for everything—from explaining everyone’s part in the day-to-day running of the business to communicating your marketing strategy.

7) Providing Insufficient or No Feedback

Among bad management habits is also the practice of providing poor feedback to employees—or none at all. The fact is that a yearly performance review isn’t enough, nor is a brief meeting where you give vague advice or nonconstructive criticism. Workers need regular, strong input to stay engaged, build on their skills, and achieve better results. Without it, they won’t receive the support they need or feel like they’re in a place where they can grow.

Companies that implement regular employee feedback have been shown to have 14.9% lower turnover rates.

So, make it a point to meet with each employee at various times throughout the year to discuss their performance. And incorporate the characteristics of good feedback to ensure you’re delivering valuable guidance.

Takeaway

No business owner wants to admit they’re the reason why employees quit. And for many, breaking these bad management habits can be a struggle. Doing so often requires a real change to their overall approach to managing their business. However, the payoff can be a happier, more productive workforce and employees who stick around for the long haul. If you’re guilty of any of the habits mentioned here, make an effort to correct them as soon as possible.

Filed Under: Leadership Tagged With: culture, employee morale, employee relations, small business, small business needs, small business tips