Great managers aren’t born—they’re built. But when organizations promote employees into leadership roles without training or support, the costs add up quickly. These costs aren’t always obvious on a balance sheet, but they show up in turnover, morale, and lost opportunities. 

In this blog, we’ll uncover the hidden costs of poor management, explain why they’re so damaging, and share how HR leaders can get ahead of the problem. 

1. High Turnover Costs 

Turnover is one of the most expensive consequences of weak management. According to SHRM, replacing an employee can cost between 50% and 200% of their annual salary. That includes recruiting, onboarding, training, and lost productivity while the position is vacant. 

Bad managers are the #1 reason employees quit—no perks or pay raises can make up for a poor relationship with a direct supervisor. 

2. Lost Productivity 

Poorly managed teams tend to spin their wheels. Without clear direction, priorities, or delegation, productivity stalls. Deadlines are missed, projects underdeliver, and high performers become disengaged. 

Gallup data shows that managers account for 70% of the variance in employee engagement—meaning the majority of productivity gains or losses come down to leadership quality. 

3. Burnout and Absenteeism 

When managers micromanage, avoid hard conversations, or fail to set priorities, employees feel stuck and unsupported. The result? Burnout. 

Burnout isn’t just an HR buzzword—it leads directly to higher absenteeism, lower performance, and even medical claims. That creates hidden financial costs that can overwhelm budgets. 

4. Damage to Employer Brand 

Employees talk. Whether it’s Glassdoor reviews, LinkedIn posts, or word-of-mouth, poor managers hurt your reputation as an employer. That makes it harder to attract top talent, and often forces companies to pay more to hire the same level of skill. 

Recruitment gets more expensive when your brand is known for poor leadership. 

5. HR Overload 

When managers struggle, HR pays the price. Instead of focusing on strategy, HR teams are forced into constant firefighting—mediating conflicts, handling complaints, and managing turnover. This creates a cycle where HR can’t focus on building long-term programs that actually prevent these problems. 

Breaking the Cycle 

The good news? These hidden costs aren’t inevitable. Organizations that invest in building better managers see measurable results: higher engagement, stronger retention, and better business performance. 

Key steps include: 

• Introducing growth-focused manager assessments 

• Training leaders in effective feedback models 

• Supporting new managers with structured development plans 

• Embedding leadership into company culture 

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How MP Can Help

If this resonates, we invite you to watch our webinar recording: Management 101: Why Bad Managers Cost You More Than You Think. In this session, MP’s Senior HR Partner Sharon Hui, SHRM-CP and PHR, shares real-world strategies for spotting struggling managers, assessing effectively, and creating a culture of leadership development. 

At MP, we partner with HR leaders to: 

• Identify leadership gaps early with manager assessments and engagement surveys 

• Develop managers through coaching, toolkits, and training programs 

• Reduce turnover by building leadership pipelines that work 

• Free up HR teams to focus on strategy, not just damage control 

🎥 Watch the webinar recording here →

👉 Or download our free Manager Red Flag Checklist to start spotting early warning signs in your organization. me one of the most powerful tools HR leaders have to strengthen teams, reduce turnover, and boost engagement

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