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The True Cost Of Poor Leadership


by Will Bridges, HR Consultant at Unum

Big boss yelling at his employee

While poor management has a financial cost, it also has a wider detrimental cost to a business, as well as individuals. Bad leadership can be the result of insufficient training, an inadequate understanding of the business, and weak management skills.

So, what exactly is bad leadership costing your business and what can be done to safeguard against it?

Missed deadlines.

Leaders should aim to supervise employees and seek to help them manage projects, deadlines, and their workload. While it’s important that a manager doesn’t take over, it is imperative they keep up to speed with progress and whether a deadline is achievable. Missing deadlines can be costly for a business, whether due to having to alter timeframes and pushback on projects, or failing to deliver to a client or customer on time. Time management and project management skills are essential to be a good leader, as it often involves juggling several projects at once and requires an awareness of time constraints. Fortunately, if an individual is lacking in this area, offering training could resolve the issue and improve these skills.

Financial results and goals.

Often the effects of poor leadership are most visible in poor financial results and failing to meet goals. This can be a consequence of leadership failing to inspire employees to deliver the best results and meeting their potential. In order to achieve the best results, employees at every level need to be committed to the company and to the attainment of goals, both financial and otherwise, which is something managers should help with. A lack of vision can be damaging to a business, and a good manager will ensure they have a clear vision of the company’s goals and the direction in which they are heading, which they will share with their employees.


Poor leadership is often compounded by poor communication. A good leader will communicate with employees regularly to convey a range of information and develop synergy. Encouraging employees to share ideas and engage in open discussion benefits the company and ensures that everyone is aligned in pursuing goals. This type of management helps employees to develop a good understanding of the company’s values and goals. Similarly, good leaders are also good listeners – willing to hear employees’ concerns, thoughts and feedback. Failing to communicate with employees can cause them to feel out of the loop and underappreciated, and result in vital information not being conveyed.


The relationship between employees and management shouldn’t be underestimated, with its effects reaching far beyond just the individuals. Just as a good manager has the potential to boost morale, a bad manager has the potential to lower it. Poor leadership can result in tension between employees and can affect productivity, performance and wellbeing. Additionally, employees feeling they are being let down or criticised by managers can result in disillusionment and demoralisation. Equally, being unable to address employees who may be underperforming, for example, can be another consequence of poor management and can have a negative impact on the wider team as good employs pick up the slack. Good leaders will know how to give their employees a boost and what they should do to ensure their team is happy and productive.

Employee retention.

It’ll come as no surprise that poor leadership can result in higher employee turnover. A lack of motivation stemming from feeling badly managed and demoralised can lead employees to look for a new job. Employees feeling as though they aren’t supported or valued can cause a business to lose their top and most experienced employees, which in turn can lead to a costly recruitment process to find new hires.


While it might seem that micromanagement wouldn’t be that damaging – after all it ensures everything gets done – it can actually have a profound impact on employees. Being micromanaged can lead employees to resent the lack of responsibility, autonomy and to a degree, trust. Micro-management can result in underperforming and a lack of motivation. In order to be a good manager individuals must be willing to relinquish control from time to time; allowing employees to ‘get on with things’ isn’t a sign of weakness or poor management, it’s a sign you’re confident in their work and will be willing to step in should you be needed.

The effects of poor leadership can be far reaching and can have more than just a financial cost. When hiring for managerial positions it’s important to look closely at candidates’ skillsets; it is also important to provide thorough training for those entering managerial roles. With effective training it is possible for individuals to reach their potential and become great leaders who not only perform to their best but also get the best out of their employees. It’s important to remember that as much damage as bad leadership can cause, good leadership has the potential to do great things and can have a profound effect on a business.


Will Bridges

Will Bridges is an HR Consultant at Unum, one of the UK’s leading financial protection insurers. Unum specialises in providing Income Protection through the workplace, and are committed to helping the UK’s workforce get a back-up plan. Visit them online at: http://unum.co.uk.