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20 July 2024

A good boss is key to staff retention

By Karen Remo Listana



Attracting and retaining talented employees is one of the biggest challenges facing every industry today. And one of the major reasons for low retention rates is the employment of bad managers, according to an expert.


“Managers are the most influential factor affecting employee retention,” said Mohammed Benayoune, Director and Head Coach of Canada-based training group Achievement Centre International. “Most of the time people leave managers, not companies. When somebody resigns most probably the resignation is due to the boss. And there are statistics that back this up.”


Benayoune said a survey by professional services firm Towers Perrin found that the main reasons employees stay at a company include having a good manager, a challenging work environment and career advancement.


The honesty, consistency and motivation provided by a manager were always almost top priorities. The money factor, Benayoune added, did not usually appear on the top list.


Another study by Sirota Survey Intelligence found that employees who felt their manager did not respect them were three times more likely to leave over the following two years than those who felt respected.


“The manager or the supervisor is the key,” added Benayoune, former CEO of Aromatics Oman and Oman Polypropylene. “If you get the right manager he can engage the people working for him and encourage them to give you much more.”


He said mismanagement cost a fortune as productivity was lower. He said large companies incurred an average $40 million (Dh147m) loss per year through losing talented staff and hiring replacements.


“Bringing in a new worker costs nearly twice his annual salary if we take into consideration the recruitment and training process. In other words companies need good leadership – specifically good managers. The same rule applies to every company in any country as shortage of skilled workers is now a global phenomenon. The tight labour market is seen in the West just as much as in the Middle East. This is the same in Canada, Australia and many other countries,” he added.


According to the Conference Board, a global business membership and research organisation, 40 per cent of the US workforce will reach retirement age by 2010. The oil and gas industry is the worst placed sector as the average age of workers is about 47.


Benayoune said companies were losing experienced staff at an unprecedented rate.


“In the oil industry, for example, one major company has reported losing 30 employees every month. Another lost most of its top management reporting to the CEO last year.


“A newly established company lost more than $250m in revenues in 2007 – and the lack of talented leadership is believed to have played a key role in this. Another new company reported more than 33 major shutdowns last year because of this.


“Many oil and gas companies are now hiring secondary school leavers and giving them one year’s training before putting them in the field. These companies used to hire university and technical college graduates and give them at least two years’ training before putting them on the job.”


A study by Deloitte says 79 per cent of companies see a significant gap in their talent pipeline. And 73 per cent of respondents in a poll at a Marsh conference last year said recruitment and retention of qualified people had become an important or critical issue.


“These are frightening statistics,” said Benayoune. “In fact, in other parts of the world they are suffering even more.”


He said another reason for the acute shortage of skilled manpower was the huge number of projects under way around the world. In the Middle East it is estimated that total investment in new projects is $3.5 trillion.


“But where will the manpower needed to run these projects come from? The shortage will lead to more poaching of employees among companies, resulting in an all-out war for talent. This will lead to higher salaries and benefits without solving the problem in the long run,” he said.


Benayoune said though salaries and benefits were important, they only went so far towards resolving the problem. Other firms would follow the market trends and raise their salaries and even offer better benefits.


“In the poaching game no one benefits. Research suggests that the star employees are the first to be poached by competitors and are less likely to stay. But stars rarely sustain their performance in a new organisation.”


The introduction of policies that give priority to a country’s national population can affect job security.


“The problem in this region has much more to do with loyalty,” he said. “The localisation policy is viewed by expatriates as a threat. If you are an employee and you know that you will have to be let go once the company hires a national, do you think you can give your 100 per cent?” He said in order to show good localisation results, locals across the region are sometimes promoted to positions without adequate talent. “This is the challenge. I’m not against localisation, but I am against the way the firms implement it.”




General factors that employees in the Middle East are looking for:


- Long-term career path with multiple options

- Good leadership

- Professional development

- A challenging work environment that leads to personal growth

- Respect and appreciation of their personal contribution

- Sense of mission and purpose

- Financial rewards and job security (for expatriates)

- Fast promotion to higher managerial positions (for nationals)


Financial rewards that employees in the region are looking for:


- Salaries in line with the market

- Benefits such as housing, transport, health cover, school fees and annual tickets for home leave for self and dependents

- Bonuses: Quarterly bonuses linked to company, department and individual performance are found to work better than annual bonuses

- Company loans for house or car purchase

- Escalating rates of end-of-service benefit



Mohammed Benayoune


Mohammed Benayoune is director and head coach of the Achievement Centre International and former CEO of Aromatics Oman and Oman Polypropylene.


He has more than 15 years of teaching and research experience including serving as chairman of the Department of Mechanical Engineering at Sultan Qaboos University, Oman. In 1998, he moved to the Ministry of Oil and Gas in Oman where he led a number of mega projects worth billions of dollars. He was involved in setting up companies to develop these projects from concept to operation.


Benayoune now works with firms and government bodies to develop the skills required to face tomorrow’s challenges. He is also working with global investors on an integrated refinery and petro-chemical complex in North Africa.