What’s Holding Back Manager Effectiveness, and How to Fix It

Organizations are facing an unusual set of challenges brought on by the combination of a tight labor market and the widespread expectation of a recession. Companies need to cut costs, enable teams to deliver results more effectively, and keep employees engaged and satisfied, or they risk the very real possibility of losing them. The latest job figures show that the number of employees quitting continues to vastly outnumber those being laid off, with 1.7 job openings for every unemployed person.

To make this happen, organizations are counting on managers. A recent Gartner survey found that manager effectiveness was the top priority of HR leaders going into 2023.

For the new RedThread Research study “Managing Better in 2023,” we conducted a deep dive into the factors that make managers more or less successful in guiding their teams. What we found is likely to serve as a wake-up call for companies: When it comes to the practices that managers themselves engage in to ensure that their work is effective, little has changed in recent years. But when it comes to certain practices that organizations are responsible for — practices to support managers — there has been a marked decline over the past year.

We surveyed more than 700 employees representing a wide range of industries and asked them about how effective their managers are and how things have been evolving within their organizations. We asked respondents to detail various practices that are important for managers to engage in. Using regression analysis, we then identified seven practices that are most important in driving manager effectiveness. (See “Seven Factors Drive Manager Effectiveness.”)

Four of these practices are under the control of managers themselves: treating employees with respect, managing difficult conversations, removing barriers to getting work done, and fostering connections within the team. We asked about the first three of these factors in a previous survey conducted a year ago, and the more recent figures are virtually the same, indicating that managers are staying consistent overall.

The other three practices affecting manager effectiveness tell a different story, and these are the purview of senior leaders and HR: providing clarity on what employees across the company need to do in order to succeed in the future, sharing data-based insights into a team’s engagement, and offering opportunities to connect with coaches from outside the organization.

When we asked about the first two of these practices a year earlier, 48% of employees said the organization was providing clarity, but that figure has now dropped to 38%. Similarly, while 40% of employees said they were receiving data-based insights last year, that number is now down to 33%. Our research has found that these factors are critical reasons why employees say their managers are less effective now.

Taking Action to Increase Manager Effectiveness

For years, we’ve studied these seven practices and interviewed people at all levels in companies that excel at integrating all of them into the management culture. For our latest study, we also interviewed a dozen leaders and held a roundtable discussion with another 15.

Through this work, we’ve found that three key actions can help organizations — particularly senior leaders and HR teams — address gaps in support and develop more effective managers.

Provide a Map and GPS

Managers may need to guide their teams through rocky terrain and uncertainty. It’s up to the organization to make sure they know where they’re going. In some businesses, managers may achieve a sales goal only to learn that the organization also wanted them to upskill more of their staff members. It’s up to top leaders to make clear at all times what they want their teams to achieve.

Setting clear goals is like creating a map. But managers also need a GPS — automatically updated, timely, and specific data to show them where they are. Technology can provide data — whether it’s how many sales are in the pipeline, which employees are learning which skills, or how engaged their teams feel — to help managers gauge how far they have yet to go.

Build Community

Managers can be a crucial source of guidance to their employees, but they don’t have the bandwidth to answer every question or teach them every skill. Our study found that the more employees feel connected to the community inside their organization, the more they turn to one another for support in meeting their goals and improving their work. This has the additional effect of helping employees feel more connected to the organization itself. Encouraging the formation of such connections can be done through initiatives like group events and peer coaching, for example.

But building community is not exclusively an internal process. The organization should support bringing in external coaches and speakers who can help team members become better at what they do as well. Companies can also support employees who want to attend industrywide events, which helps with their development and allows them to build stronger networks.

Let Technology Help

Many organizations don’t realize that new technologies are available to help automate parts of what managers are expected to do. Our study found that the more businesses put these tools to use, the more effective managers are.

For example, some companies leverage onboarding technology that automatically sends reminders to managers about their responsibilities for onboarding new hires, nudging them to email or text a new employee to ensure that they’re getting everything they need to feel welcome and supported. Other automation tools can help improve feedback cycles by scheduling times for the manager to provide feedback to each employee, which helps the manager plan well in advance.

Embracing and offering these technologies can allow companies to not only remove immediate pressure on managers but also demonstrate a commitment to helping them do their jobs effectively.

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The benefits of taking these actions are widespread. Our study found that in organizations with highly effective managers, employees are 2.8 times more likely to provide positive net promoter scores, 2.5 times more likely to describe their company as highly innovative, and 1.6 times more likely to be highly engaged.

As businesses face an uncertain economy, they can be sure that empowering managers to be more effective will help them succeed in the journey.