When employees quit, it’s easy to blame pay, workload, or the competitive job market. But often, the root cause is that employees feel unsupported, overlooked, or disconnected from their managers.
In fact, Gallup research shows that managers account for at least 70% of the variance in employee engagement. This has a direct tie to turnover, productivity, and profitability. Another study found that employees who feel their manager supports their development are 3.4 times more likely to stay with their company (Gallup, 2023).
For small businesses, where every team member counts, that kind of impact can’t be ignored. But the fix isn’t about giving raises or adding perks. It’s about equipping your managers with the skills to be coaches, not just taskmasters.
Why Coaching Managers Can Transform Small Businesses
Coaching managers go beyond directing work and checking boxes. They help employees grow, solve problems, and build the confidence to take on new challenges. This shift matters because:
- Coaching builds trust and loyalty. Employees feel heard and supported, not just managed.
- It reduces turnover. People don’t leave jobs, they leave managers. A coaching approach keeps teams engaged and invested.
- It improves performance without micromanaging. Instead of telling employees what to do, coaching managers guide them to find solutions and build skills.
- It creates a stronger culture. When managers invest in people, teams naturally become more collaborative and resilient.
What Makes a Great Coaching Manager?
Managers don’t need to become full-time coaches, but learning a few core skills can transform how they lead. Some of the most impactful include:
- Active Listening. Being fully present, not just waiting for their turn to speak. Employees notice when they’re truly heard.
- Asking Great Questions. Open-ended questions (“What’s getting in the way of your progress?”) help employees think critically and feel empowered.
- Building Trust and Clear Boundaries. Coaching relationships thrive when employees know conversations are confidential and safe.
- Recognizing Progress. Noticing and celebrating small wins keeps employees motivated and confident.
- Using a Coaching Framework. Simple models like GROW (Goal, Reality, Options, Way Forward) keep conversations structured and actionable.
The Ripple Effect of Coaching on Retention and Productivity
For a small business, losing even one key employee can be costly, both financially and culturally. SHRM estimates the cost to replace a single employee can be up to 50–60% of their annual salary, once you factor in hiring, training, and lost productivity.
Training managers to be coaches helps prevent this by:
- Keeping employees engaged and challenged. People who see a path to growth are less likely to look elsewhere.
- Creating resilience in teams. Coaching fosters problem-solving and confidence, which reduces stress and burnout.
- Strengthening business results. Engaged, supported employees consistently outperform disengaged teams in productivity and profitability.
How to Start Building Coaching Skills in Your Managers
Developing coaching managers doesn’t require a massive training budget. It starts with helping them make a mindset shift from directing tasks to empowering people. Encourage managers to set aside time for real conversations, ask more questions than they answer, and use simple tools like feedback check-ins or coaching models to guide their team.
When managers adopt a coaching approach, employees don’t just perform better, they stay longer, contribute more, and help build the thriving workplace every small business needs to grow.
Want to help your managers become exceptional coaches?
Our Coaching Skills for Managers series offers 26 practical, bite-sized courses designed to build confidence, trust, and results without taking them away from the job for weeks at a time. Get started here.
