The Epidemic That's Costing American Employers Billions

I got my first job when I was fifteen, working in food service at Great America, an amusement park in Northern California. The following summer I was a food service lead and the summer after that, promoted to supervisor. My department held a 2-hour training session covering food safety, scheduling, timecards, OSHA regulations, and that was pretty much it. I wasn't taught anything about leadership, communication, the well-being of my employees or anything else that might fall into the category of: Managerial Skills.

On Monday of my first week in management, I was assigned to run "Always on Sundae," and that Thursday, I made one of my employees cry. She was sixteen, it was her first job, and I teased her in front of everyone because she was taking forever to heat a batch of hot fudge. She didn't show up for work the next day.

I was seventeen years old.

Without realizing it, decades before I coined the term "Accidental Manager" to describe a person who falls into a supervisory role without the least qualifications to oversee the work of others, I was one.

This has become an epidemic in America, and a very expensive one. Accidental Managers™ are in every workplace, in every industry, at all levels, and they cost employers hundreds of billions of dollars.

That's not hyperbole. Gallup has been researching the state of the American workforce for over a decade and their latest report concludes that employee unhappiness and disengagement costs companies in the U.S. $450-550 billion a year (yes, billion). Unhappy workers are more likely to call in sick, quit without notice, engage in workplace violence and bullying, file workers compensation claims (both false and legitimate, as unhappy people actually suffer more workplace injuries), and that's not even considering the loss of productivity a company would otherwise get from a fully engaged, happy workforce, who will be more creative, more loyal and more innovative than their miserable counterparts.

An even greater cost emerging from employee unhappiness is the presence of disgruntled, revenge-seeking workers on the Darknet - a black-market mall of sorts, where participants who can conceal their identities are only too willing to sell corporate secrets to the highest bidder. Companies are now spending in the billions on security software, data monitoring, tracking and personnel to combat this. If they would take 10% of that budget and invest it into improving corporate culture they'd get far greater returns. The first step is identifying, training and limiting Accidental Managers. Quite simply - don't put employees in charge of other employees without making sure they have the basic skills and training for the task.

When I work with a law firm that is losing hundreds of thousands of dollars in turnover and absenteeism, one of the first questions I'll ask is, "How many managers do you have?" The answer for a large firm is generally, "Around 10 or 12," at which point I have to point out that they have 300 attorneys, every one of whom has an assistant, and supervisory duties over paralegals, junior lawyers, receptionists and so on. Thus, every one of those lawyers is a manager. And none of them has been taught managerial skills. I was a lawyer in a 900-attorney firm and I taught law school, and this kind of curriculum or training does not seem to be offered anywhere. In fact, while I was a visiting professor at Berkeley Law, I took an hour out of my syllabus to teach, "How to speak to your assistant," which most students thought was a waste of time. A year or two later, I started getting their emails, as so many finally understood what I was trying to convey.

How you talk to someone dictates how they work for you, and the Accidental Manager who gets this wrong faces an uphill battle, struggling every day to get their own team to be on their side. Just think of how much that costs their employer!

I have a close friend who is a successful game developer. He got hired by a company to be a product manager and is so good at the tech side of his job, he was put in charge of five of their products, each with a team of about 30 developers, designers, engineers and others. When we had the conversation about what he could do to keep his 150 highly-skilled, in-demand workers from quitting (and especially quitting with no notice, costing the company incredible amounts of time and money), I gave him a quick tutorial about employee satisfaction, and how the great majority of it comes from a sense of accomplishment and autonomy. If he could simply find a way to give each person ownership of a larger portion of the outcome, then essentially stay out of their way as they achieve their goals, he would get far more out of everyone. Flash forward a few months and that proved to be so true that he called me, bordering on furious, asking, "Why didn't they just tell me this in the first place?!"

There are three answers to that question. The first is that upper management doesn't know it themselves. They came up through the ranks under their share of Accidental Managers and have never seen mindful, effective team leadership modeled. The second is that if they are aware of what makes for good managerial practices, they assume everyone already knows this as well, intuitively. That's a grave mistake. Nothing about modern workforce management is instinctive. For most of human existence, our leaders were those who were the biggest, strongest and most aggressive -- the ones who the tribe most feared. In today's culture, fear is not a motivator for employee engagement, and yet, our instinct still tells us it is.

The number one factor that motivates employees is the feeling of making progress in their work (think about it - isn't that what motivates you?), and yet, when Terese Amabile at Harvard Business School asked managers across a wide range of industries at various levels of management to rank the effectiveness of factors that motivate employees, 95% of them ranked "Making Progress" last - dead last!

The skills that managers need to create a positive culture are not intuitive and most people do not possess them naturally. Organizations need to invest in training for this if they want to achieve it.

Which brings us to the third answer to my friend's question: Employee unhappiness is not a line item in the P&L statement. If it were, it would get an emergency response. People in the C-Suites and HR are not paying enough attention to how much their Accidental Managers, their toxic employees, their demoralizing policies, etc. cost them, in very real dollars, every day. If they would address these issues, they'd see immediate, impressive results.

They are also afraid to tell someone higher up on the ladder that they're spending money on something so seemingly frivolous as "Workplace Happiness." But one only has to look at the research in this area being done by Gallup, Harvard and U.C. Riverside to realize that nothing could be more cost-effective or provide greater returns than investing in training managers how to establish and grow workforce happiness. This pays off exponentially and over a longer period than just about any other program.

Here are three simple starting steps to lowering costs, increasing productivity and maximizing profits by making employee happiness a priority:

  1. Lose the Accidental Managers. Stop promoting people into management roles without giving them any training in how to effectively manage other human beings. A management role is any job that requires someone else to report to it. Don't let executives who have no clue how to motivate and engage workers be put in charge of others by virtue of their education, seniority or job title. A one-hour session guiding supervisors how to talk to their direct reports can save hundreds of thousands of dollars in turnover, absenteeism and theft.
  2. Fire all of the toxic people. You know who they are. You think you need them, but if they got hit by a bus tomorrow, your company would survive and they are costing far more than you're willing to admit. Look at the absenteeism and turnover in every department and if one is a standard deviation above the rest, go find out who there is toxic and give them a chance to improve. If they won't (or can't), show them the door.
  3. Give employees clear directions, then get out of their way. The #1 factor in workplace happiness is a person's sense of accomplishment. That's all any of us wants from a job -- the feeling that we can do it and do it well. The #2 factor is autonomy -- being able to do our jobs without interference. #3 is appreciation of our work. Don't take your employees' efforts for granted. When they're giving you what you need, tell them. Often. In fact, lead with it. If you give people those three things: appreciation, clear directions and confidence in their ability to do the job, it's worth more than all the Friday bagels and foosball tables in the world.
These changes cost virtually nothing.

They save millions.

Leaders who ignore this deserve to lose the money they're losing sticking with that same outdated view that employees should just do what they're told and be grateful that they have jobs.

Focus on happiness in the workplace and not only will you have a more pleasant place to spend one-third of your waking hours, but you'll have an incredible ROI to show for it.

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This article originally appeared on LinkedIn.

Valerie Alexander is a keynote speaker and corporate trainer, and a former securities lawyer, investment banker and Internet executive. She now works with companies and organizations seeking to retain their top talent by making happiness in the workplace a priority and ensuring that female professionals are recognized and rewarded for their work. Her many books on Happiness, Success, and Success for Women can be found on Amazon.com, and she can be reached directly through her website, SpeakHappiness.com.