How to reduce turnover by leading without transactional power

According to LinkedIn data from 2022 the tech industry has the second highest rate of employee turnover with almost 13%. This means the average tech company had to replace 13% of its workforce in the 12 months leading up to June 2022. Subjectively, it feels as though the number should be higher. (Number one with 13,4% is “Professional Services” which – I guess – is a more fancy way to describe consultants 🤷‍♂️.)

As someone working in a product team, that leaves you in a tough spot. On the one hand, you are directly affected by the turnover, constantly losing knowledge and having to onboard new team members. On the other hand you are seemingly without any formal means to do anything. You are likely not the line manager of the team members and thus have no transactional responsibilities and power (e.g. give raises, approve training, or create a career plan).

What if I told you that you can still have a tremendous impact?

Today, I will explain what exactly you can do to reduce the chance of people quitting without being their official manager. First though, I want to clear some confusion about the reasons for quitting. 

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Money as the reason for quitting is a convenient excuse, not the truth

In my conversations with people who had resigned, and from participating in exit interviews, I often heard a higher salary cited as the main reason for quitting. Many leaders and HR departments seem to believe this is the case. More often than not, I believe money as the main reason for quitting is a convenient lie. 

Most people struggle giving critical feedback. An honest exit interview involves such feedback. After all, the person quit, so something must have been wrong.

People don’t want to hurt others’ feelings or leave on bad terms. They might need their former leader as a reference for future jobs, for example. For this reason it’s convenient to simply claim money as the main reason for quitting. That way everyone saves face, avoids an uncomfortable conversation, and avoids confronting tough realities. 

Hearing, “My new job is offering 30% more pay.” and saying, “That’s unfortunate, my hands are tied. The budget is set by finance and we can’t offer more.”  Is much more convenient, than giving and accepting critical feedback that might require reevaluating one’s leadership style.

(Side Note: I believe exit interviews are a waste of time for these reasons. It’s rare that something substantial actually comes from them.)

Those that actually leave for monetary reasons are in the minority

Here comes the obvious disclaimer. I am aware that some people actually quit their job because they genuinely need the money. 

Perhaps she bought or renovated a house using a mortgage with flexible interest rates that now increased. Maybe he had a child or needs to pay for a family member’s medical care. Maybe her husband lost his job and now she needs to be the sole provider. These are serious, real situations that may cause someone to look for a new job simply for a higher salary.

This is rare, though. For the vast majority of people that quit, I believe money plays a role, but a minor one. The actual reasons for quitting are different.

Why do people actually leave?

According to my anecdata there are two actual root causes for people quitting: bad leadership and the need for a new challenge. But the number of people quitting due to bad leadership far outweighs the ones quitting due to needing a new challenge.

Let’s address the latter first. There is often not much you can do anyway. 

The need for a new challenge

Every so often, people simply need to do something different. Things become stale and they feel they need a new challenge to learn something new or to evolve as a person. 

For instance, I recently worked with a front-end developer who has now started a career as an artist. Others decide to leave the safe haven of permanent employment in favor of becoming a freelancer because they want to experience being their own boss. 

This is perfectly normal. Sometimes it’s simply time for a change. There is often not much you can do about that. Although I could argue that a good leader would help the employee find the new challenge within the current company… 

Bad leadership

The vast majority of people quit due to poor leadership. Unfortunately, poor leadership is common. It’s hard to find truly good leaders. In my experience, three manifestations of poor leadership stand out as reasons for quitting.

  • Lack of real vision and company culture
  • No or poor decision making
  • No care for the people

Most companies have a vision and values that are supposedly at the core of the company’s culture. Often, these exist in writing only. Decisions are made that seem at odds with the vision. And leaders don’t act according to the values. As a result, employees at best don’t feel attached to the company. At worst, they feel alienated.

In a world of remote work, more effort is needed to purposely foster a culture. Company values, culture, and how stuff gets done doesn’t spread organically as it does in person. Many leaders don’t seem to find the time to purposely shape the culture.

Secondly, many leaders struggle with decision making. They either don’t make decisions at all, postponing them until they “resolve” themselves. Or they constantly change their decisions, causing teams to frequently change their focus. 

Finally, poor leaders don’t truly listen to their team. They don’t really care about their issues. They “listen”, nod, and then do nothing. That’s because these problems are often (inter-)personal and are hard to grasp and solve. Instead they focus on concrete matters like project status updates, budget, or firefighting. 

Despite all this negativity, there is also some good news. The lack of leadership can be a chance. There is a lot you can do, even if you are not in a formal leadership position. 

How to avoid people quitting without formal leadership power

Product people or project leaders work closely with a team that doesn’t formally report to them. They don’t have transactional power. Nevertheless, you can step in and fill the leadership void even though you may not be “in charge” according to the org chart. 

There are ways to foster a strong team culture. This can turn into a bubble around the team protecting it from whatever is wrong with the rest of the organization. It ensures that the team is happy and people stay. Four things come to mind: 

  • Help the team members
  • Communicate and be there for questions
  • Make quick decisions
  • Build the bridge to the formal leaders

Help the team members where you can

As much as is in your power you should help team members with their issues. I always recommend regular retrospectives, regardless if you are running Scrum or not. Team issues are bound to come up there. Take them seriously and try to help solve them as much as you can.

Additionally, talk to the team members in one to one conversations and actively listen for their individual problems. Chances are that the current processes and tools are not optimal. Chances are the team members are frustrated in one way or another. Chances are also that easy fixes exist. Try to find and implement these. 

Communicate and be there for questions

Many employees feel uninformed or are so stuck in the day to day that they don’t know what else is happening. For that reason, I always encourage to share any information you may get about what is happening around the team. After the stand-up is usually a good time to do so. 

Also, try to be there for questions. Sure, project leaders, product owners or managers, and scrum masters have many obligations and so many meetings. Nevertheless, prioritize those with the team. Don’t just show up to the reviews every two weeks. Be there regularly for the team in case of questions. 

You don’t have to have all the answers by the way. It’s perfectly fine to say the words I don’t know

Make quick decisions

This is where you can really stand-out, in case your organization struggles with decision making. Simply take on the responsibility and make decisions yourself. Do this quickly, especially for small ones. 

Don’t wait for perfect data. Most of the time, it is better to be quick than perfect in decision making. Moreover, it’s often better to make the wrong decision than to not make one at all. At least you learned something along the way. The vast majority of decisions are reversible, anyway. I have always loved Jeff Bezos’ and Amazon’s concept of Type 1 and Type 2 decisions. 

Inform the formal leaders of what is going on

If you are working closely with the team you likely have a better sense of the day to day of the team members than their line managers. Thus, you probably have a better understanding of the big and small issues they are facing daily. It’s always a good idea to inform those leaders if you sense something is off. (The good ones will actually seek this out from you.) 

Many leaders are not purposely ignoring the issues. They simply are not aware. They are often overwhelmed themselves. Most will be grateful for any pointers you can give them.

A call to fill the leadership void without formal power

Leadership is, above all, actions. Thus, even though you are without formal, transactional leadership power, you can still be a leader for team members. I encourage every product owner, project manager, scrum master, agile coach, or product manager to fill any leadership void they see. 

This will lead to more satisfied team members, less frustration and less quitting. This way we might be able to avoid unproductive exit interviews where everyone checks off the boxes and believes the convenient excuse that money was the reason for a person quitting.

Coverphoto by Nick Fewings on Unsplash