Cost of a Bad Boss

Why put a number on a bad manager?

Because a number gets a meeting that a feeling doesn’t. Most senior leaders know which of their managers are struggling. Fewer can say what it is costing, so the problem waits until someone resigns.

Managers matter more than almost anything else here: Gallup found that managers account for at least 70% of the variance in employee engagement across teams.

How does the calculator work it out?

1. Replacement cost per person is 0.5 to 2 times their yearly salary, Gallup’s range. Typical costs include hiring, onboarding and the months before a new person is fully productive.
2. All exits is the number of people who chose to leave × the average salary × that range.
3. Preventable exits applies the share that could have been prevented. The default, 52%, is Gallup’s figure for leavers who say their manager or organisation could have kept them.
4. Keeping one more person is the replacement cost of a single exit at the salary you entered.

The salary that appears first is an example, not a benchmark. For a budget conversation, quote the low end of the range: it’s the hardest to argue with. For a worked example, read what a bad manager costs a company.

Does a high bill mean you should replace the manager?

Usually not as a first step. Many struggling managers were promoted for being good at the work and never shown how to lead. Coaching and clearer expectations often close the gap faster than a new hire.

To see a manager’s habits from the inside, they can take The 42 Test, which is free. To understand why good people leave in the first place, take Talent Magnet, a free self-test on growth, recognition, fairness and your reputation as a manager to work for.