Retention Fate

The impact of skilled managers

Scene from the TV show The Office showing manager Michael Scott presiding over a meeting with four disinterested employees.Turnover is a critical issue for any company, but it’s even more critical in the tech sector, where workers with specialized knowledge are difficult to replace. But there’s something companies can do to keep top talent around: employ skilled managers, says research by Haas Prof. Steve Tadelis.

Tadelis and co-author Mitchell Hoffman of the University of Toronto conducted research at a large tech company and found that employees who were assigned to managers displaying a high degree of people-management skills were less likely to leave the company than those assigned to less-skilled managers.

Specifically, if an employee moved from a manager ranked in the bottom 10% of a people-management score to a manager ranked at 90% or above, they would be 60% less likely to leave the company, the researchers concluded.

The researchers looked at a variety of jobs, including engineering, finance, and marketing, and found that the results were stronger for employees at higher levels of the company with more demanding jobs.

However, people-management skills were not associated with other measurable outcomes. Better managers did not spur more employee patents, for example, or lead to better subjective job performance or a higher probability of promotion. In other words, better people-management skills may not make workers more productive, but they do improve their job satisfaction.