The Blogs of Dave Murphy: It’s harder to be a good people manager in a tight labor market
The U.S. economy continues to expand, the job market is unprecedented, and most companies are making money. It’s a rosy situation as compared to the Great Recession but team leaders have a hidden threat lurking, like in the movie Jaws. The labor market is so hot (the October unemployment rate was 3.7%) that disgruntled employees are leaving their current positions simply because they don’t like their manager, regardless if their company is growing and if their job is “safe.” They are getting “wooed,” flattered, built-up and recruited by other hiring managers who are showing interest, and they are leaving in droves.
We are now at the top of Maslow’s Hierarchy of Needs in the job market and the old adage that “people work for people” couldn’t be more relevant. Now is an excellent time for team leaders to review their management style and perhaps retrain on time-honored management principles like “catching someone doing something right” and “servitude leadership.” I know of several proactive people managers who are re-reading classic management books like One-Minute Manager and The 7 Habits of Highly Effective People in order to avoid becoming complacent in their leadership. There are countless resources on the topic but the broader point is that it’s often harder to be an excellent manager in good economic times than in bad times, and we all need to rise to the challenge.
As an Executive Recruiter I find that workers who are given the opportunity to have open dialogue with their managers about frustrations and career development issues are far more likely to remain with their current organization than take a chance on a new one. Of course, as companies evolve situations will arise where it’s clear that the likelihood for improvement is low, often due to negative business conditions. My experience is that team leaders who proactively initiate conversations with valued employees about their concerns are far more likely to retain their A Players through bumpy times. Complacent, over-confident managers lose out and have to resort to a financial counteroffer to try to keep talented people, and this is rarely successful as a long-term solution.
In an employment market like this people managers are more often being evaluated on their ability to retain and develop high potential employees than in the past. Executives are asking if their team leaders are motivated to be a good manager. In addition to retention, another measurement of leadership aptitude is the motivation to fill open jobs. Many managers are reluctant to do it because of the risk of making a mistake as well at the challenges of being an effective team leader.
Prolonged openings are much more a function of low managerial engagement in the hiring process than a tight labor market. I’ve had several clients with vacancies tell me that if they don’t fill their openings before the end of their fiscal year there is a high likelihood that they will lose their headcount. Organizations want to shift resources to managers who are motivated to build and lead teams effectively.
Although as an Executive Recruiter it’s not in my short-term best interest to encourage employee retention, I feel it’s important to stress that – as with other skills – managing people takes practice and persistence. Many will argue that the hardest part of being an effective leader is making the on-going commitment to continue to get better at it, and we must focus on that in good economic times as well as bad. As always I welcome your questions and comments.