Why Good Leaders Make People Stay

If you’re struggling with staff turnover, the issue might not be your hiring process—it might be your leadership.

In a recent episode of the Work Wonders podcast, we explored the crucial link between leadership and retention. And spoiler alert: how you lead your team directly influences whether they stay or go.

Why Retention Matters (Especially in Small Business)

Replacing an employee can cost anywhere from 50% to 200% of their salary—not to mention the lost productivity, knowledge, and time spent recruiting and onboarding. But the cost goes beyond dollars. High turnover can shake morale, unsettle teams, and slow progress.

So Where Does Leadership Come In?

Leaders are the architects of workplace culture. They influence how people feel about coming to work each day. Good leaders build trust, give direction, offer support, and communicate consistently. Poor leaders? They micromanage, leave people in the dark, and push staff away without even realising it.

The Research Backs It Up

Gallup found that managers account for up to 70% of the variance in employee engagement scores. Translation? Your leadership approach has massive influence on whether people feel connected to your business or are secretly scrolling job ads.

The Leadership Styles That Drive (or Destroy) Retention

Not all leadership is created equal. Here’s what works:

• Transformational leadership: Inspires and motivates, creates vision, encourages growth.
• Servant leadership: Prioritises the wellbeing and development of employees.
• Democratic leadership: Involves the team in decisions, makes people feel heard.

What to avoid:

• Autocratic leadership: One-way decision-making. Employees feel voiceless.
• Transactional leadership: Focuses only on performance and rewards. It might get short-term results but lacks long-term loyalty.

Practical Strategies to Boost Retention Through Leadership

• Communicate clearly and often. Employees want to know where they stand, how they’re performing, and where the business is headed.
• Create psychological safety. Make it safe to speak up, share ideas, and admit mistakes.
• Recognise effort regularly. Whether it’s a quick thank-you or formal program, people want to feel seen.
• Be consistent and fair. Nothing erodes trust faster than inconsistency.
• Invest in growth. Support career development and provide pathways forward.
• Model the behaviour you want. Leadership by example is powerful.
• Offer flexibility. Work-life balance isn’t a perk anymore—it’s an expectation.

Final Thoughts

Retention doesn’t come from ping pong tables or fancy benefits. It comes from how people are treated, supported, and led. If your people are leaving, start by looking at the mirror, not the exit interview.

Want help building leadership skills that actually keep people? Book a free call with the team at Aster HR today.