Key learning outcomes:

  • Acknowledge that a high staff turnover is an indication of problems in a business’s management.
  • Learn that a business thrives not just on the boss’s input but also that of team members.
  • Analyse job descriptions on a regular basis to ensure they reflect changes in the business.
  • Recognise the need to be consistent in your management of team members.


Things do not have to be as extreme as in the Hollywood blockbuster for your employees to consider you a “horrible boss”. For many small business owners, being a people manager is a job that is thrust upon them rather than a job they seek out. A micro business grows, and as a result they have to hire people to help, or in a family business the position of boss may be simply passed down the line. The reality is that in many cases, small business owners have not had any formal training, and they make some common mistakes over and over again. In this article we outline the warning signs that you are becoming, or already are, a horrible boss, and we give you some advice on dealing with these signs.


High staff turnover is one of the most costly problems for any business. Not only does it cost money to recruit and train replacements, there is almost always additional income loss caused through the reduced level of customer service that results from unhappy employees, untrained staff and staff shortages. It is also one of the strongest indications that there are problems with your management style.

There are two types of staff turnover: the unavoidable losses and the avoidable losses. Unavoidable losses are where an employee has to leave for reasons outside of work, for example to start a family or to move interstate. Avoidable losses are where the person leaves to take up another position or where you had to let them go. You might argue that having to let someone go is unavoidable; however, we would argue that you either hired the wrong person or have not managed the person correctly, and therefore it was an avoidable loss.

Measuring your turnover rate

To measure your turnover rate, simply divide the number of employees that have left your business over the last 12 months by the total number of staff to give you a turnover percentage. So for example:

12 employees left in last 12 months ÷ 32 total staff = 0.375

0.375 x 100 = 37.5% turnover rate

Measuring your avoidable loss

It is important to do this exercise twice: once to determine your overall turnover rate and again to determine your rate for avoidable loss. It is inevitable that there will be some employee turnover for reasons beyond your control. The key is to reduce your avoidable losses to as close to zero as you can. A high avoidable loss rate is a clear sign you are not working as well as you can as a boss.

Solution: It is important to find out why you are experiencing a high employee loss rate, and the best way to find out is to ask people why they are leaving. If you suspect you might be the reason, you may not be the best person to ask the question. Perhaps ask someone else in the business, or even someone from outside the business, to complete an exit interview.

The key is to let the person leaving know that the issue is not about blame; it is about improving how you deal with issues in the future. Explain that the more open and honest they can be the better, and that you appreciate any feedback that they can give you. . The information that comes out may be emotional and confronting; however, if you are reading this far in the article, it is because you do want to improve, and as we all know, “knowledge is power”. Look for common themes among those leaving and then look to rectify the key issues.


A common sign of a horrible boss is that they make everything about them. This happens a lot in smaller businesses, as often the business has been built on the strength of the owner’s personality and talent. Business owners are often high performers that are used to receiving high levels of praise, and they find it difficult to switch into a more supportive role as a leader and a boss.

Signs to look out for

You may recognise some of the following signs:

Solution: You need to learn to be a better listener, and to understand that you will achieve greater results if you actively engage your employees. It is proven that employee engagement levels are directly linked to performance, and one of the keys to building engagement is to involve employees in your decision-making and through open communication. We have a number of learning articles in this section of the website that will help you, including “Top 10 Ways to Motivate Employees” and “Employee Engagement”.


Many small business owners feel the need to keep company information close to their chest. They do not like to share financial information and will often work with their employees on a need-to-know basis. This is understandable to a degree as often financial information relating to the business may also be linked to their personal situation. It is important, however, to understand that the more open you are with your employees about your plans, vision and situation, the greater their engagement and performance level will be.

Solution: Look to involve your team without you necessarily having to share every small financial detail. For example, involving your team in business planning can help to commit them to the overall vision, and sharing information on profit and loss will help them to become better business people. We encourage businesses to involve teams in profit-sharing as this helps employees to think about a business beyond just their own job role and to work together for a better overall result. We have a number of learning articles to help you, and suggest starting with “Conducting a Team Planning Day”.


This issue may be secondary to high staff turnover. Because staff are always leaving, you are caught in the situation of trying to plug holes in a panic, rather than taking the time to really think about who would be the best person for the job. Often we find that some positions in a business turn over frequently because the wrong people are recruited over and over again. The horrible boss blames the employees, but in reality it is more often that the job role has been poorly designed or that the people being employed are not skilled or experienced in the right areas.

Solution: Look for job roles or positions that have a high level of turnover. Take some time to assess why people are not staying in the role. Here are some common issues to look out for and ways to solve them:


Another of the key signs of a horrible boss is that they play favourites within the team. There can be a number of reasons for this; it may be that the person reminds you of you or they may have mastered how to get the best out of you. It is important to recognise that playing favourites within your team can be demotivating for the majority. It is important also to when you start to mix your work with your social life. Perhaps you have fallen into a habit of having a drink after work with a few of the team “because the others would not want to”. This can become a larger issue over time. For example, a decision to promote a team member who you are friendly with may in fact be based on performance and skill; however, the rest of the team may perceive this a promotion for a “friend”. It is important to be friendly as the boss, but be wary when you cross over the line and become friends.

Solution: One of the keys to great leadership is consistency. You need to be consistent with your behaviour and decisions to ensure that engagement levels remain high across the board. One of the easiest ways to do this is to be open with your communication in regards to results, performance and rewards. All rewards and promotions should be awarded on merit, rather than on an ad-hoc basis. Watch out for times when you tend to call on the same person for input or help because you know they will respond favourably. Request assistance from a variety of team members, so everyone has an opportunity to shine.

In social settings it is important that everyone is invited to events or that you clearly communicate why only some of the team are participating. For example, often in a sales environment the boss may take the sales team out after a great performance. Always try to include support and administration team members, or be clear on why those attending have been invited. As the boss, it is also essential that you spread you time and attention between everyone at social events.


It is important to remember that being the boss is not always easy. Like any skill, the more you work on being a good boss, the better you will be. The great thing about leadership is that when you take the time to improve and work on your skills, you will almost always see a positive response from those around you. Never be afraid to let those around you know that you are learning as well, that you are seeking to improve, and that you value their input and feedback. Read some of the learning articles under our “Leadership” section to help you become a better boss.

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