The Impact of Good Leadership on Employee Loyalty

6480 The Impact Of Good Leadership On Employee Loyalty

​Last week, our office received three phone calls from three employees working within the same team at the same company (a company with whom we have never recruited for). Each had decided to look for a new job and each, independent of one another, identified the same reason behind their decision to leave – their manager.

It got me thinking of the saying “people don’t leave companies, they leave managers”.

While the events of last week suggest this saying is true, it is a little “glass half empty” for my liking. Why focus on those who cause people to leave organisations, rather than focussing on those who inspire people to stay?

So instead, for the purpose of this article, I am going to work with: “people aren’t loyal to organisations, they are loyal to managers”.

This, it seems to me, is just human nature. It is much easier to forge a relationship with another human being than an inanimate object. Those leaders who can develop and nurture strong relationships with their staff are those that intrinsically foster a sense of accountability amongst their team. It is that accountability that inspires a connection with, and responsibility to, the success of something greater than yourself.

I appreciate there may be a perceived irony in me, a Recruitment Consultant, encouraging the implementation of strategies to retain and improve productivity of your current staff, rather than recruiting additional ones. But the challenge of good recruitment is no longer just matching people with the right companies, it is also matching people with the right leaders. I therefore figure that, if I can encourage you to nurture better business leaders, I will save myself some time down the track.

So what are the types of leaders that people are looking for? What are the types of leaders that attract staff and inspire their loyalty?

Here are five in-demand leadership characteristics that consistently pop up in conversations with job seekers:

A clear, shared vision

Probably the most commonly documented leadership skill, and rightly so. Your vision: define it, articulate it to the team (with the passion it deserves) and then live it every day. Give staff regular updates to recognise progression and ensure continued engagement with your vision. If we want our staff to be part of our future, they need to be excited about what that future holds, and understand how they fit into it.

Emotional Intelligence

Defined as “the capacity to be aware of, control, and express one’s emotions, and to handle interpersonal relationships judiciously and empathetically”, emotional intelligence is critical to the modern leader. Being aware of oneself and those around them allows the leader to anticipate reactions to situations and respond effectively. Emotional intelligence leads to a collaborative environment – a method of management that many talk about, but very few practice.

Lead by example

By consistently delivering on what they say you will, leaders develop credibility and become someone that people want to follow. Say one thing and do another and that trust erodes. If we are setting high expectations of our staff we need to ensure we are delivering to those expectations ourselves. “Do as I say, not as I do” is not a viable leadership philosophy in 2015.

Invest in your people

Investing in the professional development of your team is an extraordinary mechanism for facilitating engagement with the business. We often see that an ongoing investment in an employee’s professional welfare is reciprocated by the employee’s ongoing investment into the welfare of the business.


As humans, we crave to be valued and appreciated. Recognition at work does not have to come in the form of financial reward. It can be as simple as saying “thank you”. Showing appreciation needs to not only recognise results, but also efforts and behaviours that support your vision and values. Make sure the gratitude is genuine and as real-time as possible.

The above five leadership characteristics seem fairly straight forward and, I assume, agreeable to most readers. I will, however, ask you when was the last time that you engaged in an activity to tangibly assess such competencies amongst your current and potential leaders? When was the last time you analysed the leadership training needs of your management team? And finally, when was the last time you invested time and money into the further development of your team’s leadership skills?

I have just started developing my business’s budgets for the next financial year. In a market that remains unpredictable, our training program, while critical to our business’s success, needs to be closely managed and expenditure justified. The challenge is, how do I justify allocating money to training a skill that is never going to be included on a corporate CV or any tender application? How do I allocate money to training a skill set that has no immediate, tangible, or measurable return on investment for my business?

Then I think about if it was me conducting three exit interviews next week, where each staff member cites “poor management” as the key reason for their resignation. I consider the costs to my business of replacing our departing employees – lost expertise and relationships, the time and cost to train replacements, the impact on team morale, the perception of our brand and, dare I say it, the recruitment fees I will pay to refill the roles. The ROI then seems a little clearer.

Staff loyalty doesn’t just improve retention, it encourages performance. If we want to build loyalty within our businesses, if we want to retain our best staff and have them work to their potential, we need to give them someone to follow. We need to empower and train our leaders to lead.