Bad leadership costing business £39 billion a year

Bad leadership is costing UK businesses £39 billion a year, according to research by Investors in People (IIP) and economic analysis consultancy TBR

The study of 3,500 employees found that a quarter (26%) do not feel motivated by their boss. The issue was most pronounced in larger businesses (defined as 1,000-plus staff), where a third (33%) of workers do not feel motivated by their managers. The situation in small businesses (one to 49 staff members) was not much better, with 29% not feeling motivated by their bosses.

Paul Devoy, head of IIP, said that these findings should be a “wake-up call” to leaders. “Our research shows that many employees are feeling frustrated in their roles because of poor management,” he said. “Strong and inspiring leaders are critical in business in order to get the best from your staff.”

Tom Castley, MD EMEA at Xactly Corp, said that management systems need to evolve to cope with modern working styles. “We are living in the era of the ‘Uber’ workforce yet have a management system that, on the whole, is still thinking like a traditional taxi dispatcher,” he said. “A huge gap exists between businesses’ approach to employee engagement and performance management and what their workforce is looking for.

“A significant proportion of the UK workforce – primarily Generation Y and Z – are now attracted by the ability to map their own performance,” he continued. “For example, in having ample sales expectation and foresight, and as long as they understand what is required, they will achieve and exceed targets. As a result businesses will have a better understanding of where their success is coming from and employees will remain loyal and productive.”

Castley argued that the key to productivity is knowledgeable and insight-driven companies with motivated staff. “Businesses need to take a step back and identify what they need to do to be successful, and decide on the corporate metrics to monitor that, and apply technology that can automate and monetise the execution against those goals,” he said.

“It is imperative that companies rethink how they motivate the workforce and reach their full potential. Only if we do this effectively will productivity rise.”