The Hidden Costs of Bad Leadership: Why Poor Management is Hurting Your Business More Than You Think

Most of us have encountered bad managers in our careers, they come in many forms: the bully, the micromanager, the manager who wants to be everyone’s friend, or simply incompetent. Many organisations promote high-performing employees into management roles because they hit targets and show ambition but excelling at an individual job doesn’t automatically translate to effective people management. Yet, many businesses fail to provide meaningful leadership training, often citing budget constraints. This is a short-sighted approach as poor managers cost businesses billions each year in the UK alone. It’s often said that employees don’t leave organisations they leave bad managers and how someone is managed has a profound impact on their work experience. In our still largely hierarchical workplaces, employees depend on managers for support and flexibility when things go wrong, like being late, falling ill, or dealing with emergencies. Bad managers cause high turnover, increased absenteeism, poor productivity, a toxic team culture, and even lost customers.

What Does Poor Leadership Look Like?

MicromanagementManagers who lack confidence or skills often dictate every detail, stifling creativity and slowing progress. Team members can’t work autonomously, leading to frustration and inefficiency.

No Performance ManagementFailing to address issues or avoiding difficult conversations allows poor performance to go unchecked, lowering morale and productivity.

Lack of CommunicationManagers who don’t give clear, constructive feedback or fail to set expectations create confusion and stress in teams.

Inconsistent ManagementWhen managers show favouritism or apply rules unevenly, it undermines trust and fairness. For example, letting one team member repeatedly arrive late without consequences while reprimanding another creates resentment. Small inconsistencies can spiral into grievances, gossip, and lost productivity.

Why It Matters for Small Businesses

In small businesses, poor management stands out immediately. Inconsistency within or between teams can damage culture and morale. Employees quickly notice when expectations differ depending on who their manager is. This leads to disengagement or even active conflict.Small teams rely on trust and a shared understanding of how things are done. Toxic leadership disrupts this quickly. Yet, in many small businesses, leadership development is overlooked or treated as “common sense.”

Warning Signs of Poor Leadership

- High turnover in a specific team or across the company- Frequent sickness absence or unexplained absenteeism- Increased complaints, conflicts, or formal grievances- Declining team performance or missed deadlinesLook for patterns in your HR data (people MI) to spot whether a particular manager or team might be struggling.

What Can You Do?

✅ Invest in Leadership TrainingManagers have a massive impact on your team’s performance and your company’s success. Ineffective managers are estimated to cost the UK economy £84 billion. How much could poor leadership be costing your business?

✅ Gather Feedback RegularlyAttend team meetings, run one-to-one check-ins, or hold “leapfrog” sessions where you speak directly with team members to get their honest perspective.

✅ Use Employee Surveys and Exit InterviewsSurveys provide an anonymous way for employees to share concerns. Exit interviews, ideally conducted by someone impartial, offer valuable insights into what might be driving people to leave.

✅ Clarify Expectations and Provide HR SupportMake sure your managers know what’s expected of them. Identify their experience gaps and offer HR training on key skills like having difficult conversations, conducting performance reviews, and supporting employees effectively.

Poor management costs businesses in many ways — from lost productivity and missed deadlines to higher turnover and a toxic culture. Managers shape your company’s day-to-day experience, influencing how employees feel and how they treat your customers. Help make work better for your business by investing in your managers and helping them become great leaders.