Your Retention Problem is a Leadership Problem

January 2026 Blog

Years of Failed Retention Strategies Taught Me This One Truth

Rampant turnover affects a business in so many ways. Does your organization struggle with all the reasons people leave? When I was a C-level executive at a company, we had a 26% annual turnover rate. When we analyzed the reasons for turnover, I kept hearing excuses like, "Healthcare manufacturing is complex." "Entry-level workers are just hard to retain." "People today don't want these jobs." “People don’t want to work today.” Sound familiar?

Here's the uncomfortable truth I eventually had to face: We were wrong!

The Real Cost of Turnover (And Why We Keep Ignoring It)

Let's be clear—no organization should aim for 100% retention. Some turnover is healthy. But let's also be honest about what chronic turnover actually costs you.

Most of our turnover happened in the first 24 months. We were caught in an exhausting cycle: recruit, select, train, watch them leave, repeat. Every year, the company had to find 150 new employees and train them.  The drain on resources was obvious. The impact on production was crushing—disengaged employees planning their exit don't produce, and new employees lack the skills to fill the gap. But here's what really broke us: the physical, mental, emotional, and spiritual exhaustion of our front-line supervisors. They lived in a constant state of crisis—always understaffed, always scrambling, always behind on production goals. It was unsustainable.

The executive leadership team couldn’t agree on solutions, yet they were adamant that it be solved. We tried innovative recruiting strategies. We repositioned the work as a "career in healthcare." We improved our hiring pipeline. We also created a new way to make interviewing and selection easier. The process of recruiting and selecting was improved. And our retention barely moved.

We made incremental compensation changes. We trained supervisors on feedback and coaching. Years passed. Even though the data pointed to our hourly wage being low, we couldn’t agree as an executive team on how to go about making the adjustments. (The company eventually overhauled the entire compensation structure with significant investment.)

The turnover rate today? Still just as high.

So, what's really going on here?

The Research That Changes Everything

Contemplate the Zenger Folkman study of nearly 100,000 direct reports across hundreds of organizations. They examined 49 behavioral items and 16 leadership competencies to determine what actually drives job satisfaction and commitment.

Their conclusion was unequivocal:

"After examining the myriad factors that influence employee satisfaction and commitment, one has consistently been shown to provide the most impact: the leadership effectiveness of employees' immediate managers. This study validates the notion that the quickest and most reliable way of increasing employee satisfaction and commitment is to provide employees with a more effective leader."

Read that again. The quickest and most reliable way.

Now, you might be thinking: "Sure, satisfaction and commitment matter, but does that actually translate to retention?"

Yes. Absolutely yes.

Gallup—the premier employee engagement research firm with over 20 years of data—defines employee engagement as "the involvement and enthusiasm of employees in their work and workplace." While engagement isn't identical to satisfaction and commitment, they're deeply interconnected. Satisfaction and commitment create the foundation for involvement and enthusiasm to flourish.

And here's the statistic that should keep you up at night: "70% of the variance in team engagement is determined solely by the manager."

Seventy percent. By the manager alone.

I've never met a leader who disputes this research. Not one. Everyone nods in agreement when they see these findings.

And yet most organizations, including the one I used to lead, continue to treat retention as a compensation problem, a recruiting problem, an "industry challenge," or a generational issue.

We keep solving for everything except the actual problem: leadership effectiveness.

Carpe Diem!

If you're serious about retention—truly serious—you cannot keep avoiding this. Here's what effective organizations do:

1. Evaluate leadership effectiveness systematically - starting at the top!

• Great leadership cascades down through an organization. So does terrible leadership. You cannot fix front-line leadership without addressing executive leadership first.

• Create a regular cadence for evaluation. Make it data driven. Make it honest. And start with yourself.

2. Build a leadership development culture that's integrated, not optional!

• Everyone in management must be engaged in becoming a better leader each and every year. This isn't an add-on to their "real work"—it is their real work. Leadership development must be woven into their daily responsibilities, not treated as an annual retreat or optional workshop.

3. Hold every people manager accountable to be at least a good leader!

• This is where most organizations fail. They tolerate mediocre or poor leadership because firing or reassigning a manager feels hard.

• But here's what's harder: watching talented employees leave because their manager is ineffective. Watching your culture deteriorate. Watching your front-line supervisors burn out.

Bad leaders must be compassionately confronted. Give them a genuine opportunity to improve with clear expectations and support. If they cannot or will not improve, reassign them to a non-management role or ask them to leave.

Good leaders must be challenged to identify and develop their unique leadership strengths in tangible, measurable ways.

This isn't cruel. What's cruel is allowing poor leadership to continue destroying employee satisfaction, commitment, and retention.

The ROI You're Looking For

Effective leadership development directly impacts employee satisfaction, commitment, involvement, and enthusiasm. It transforms culture and dramatically reduces turnover.

Your investment in leadership development will give you one of the strongest returns available in your organization.

If you want to see specific ROI studies, contact me—I'll send them to you. But honestly, you already know this is true. You've seen the cost of poor leadership. You've watched good people leave bad managers.

The Challenge

So here's my question for you: How much longer are you going to blame "the industry," compensation structures, or "the way people are today" instead of addressing the leadership effectiveness problem right in front of you?

Your retention problem is a leadership problem. And leadership problems are solvable—if you dare to face them directly.