What you can’t see and why it IS hurting your business.
There’s a CEO I worked with — runs a large insurance operation in Singapore, about 12,000 employees — and when I asked him what kept him up at night, he didn’t say competitors. He didn’t say regulation or market conditions. He said: I have 15 direct reports, but I have 12,000 employees. And I have no visibility beyond two levels down.
That’s the loyalty trap. And if you’re leading a significant organisation, there’s a good chance you’re already in it.
Here’s what it looks like from the inside: your direct reports are performing. Milestones are being hit. The metrics look clean. People seem aligned. And yet something feels off — like you’re only getting part of the picture. Because you are.
The problem isn’t that your managers are lying to you. It’s that they’ve learned, very efficiently, exactly what you want to hear. What you put your attention on thrives. If you light up when someone drops a strong metric, that’s what they’ll walk in with next time. If you love a project update, that’s what gets prepared. People figure out quickly what gets noticed, rewarded, and promoted — and then they replicate it, because they’d be foolish not to. The result is managers who are managing up instead of managing down. They’re looking at you, not at their teams.
And that’s where the damage happens.
What It’s Actually Costing You
Let’s talk numbers, because this is where the conversation gets uncomfortable.
When an employee becomes disengaged — not when they quit, when they disengage — the cost starts immediately. You’re paying 100% of their salary and getting 80% of their effort. Then 70%. Then they hand in their notice and productivity drops close to zero while projects get handed over. Then there’s the vacancy gap — and anyone who thinks a replacement gets hired before a person walks out the door hasn’t spent enough time in the real world. Other team members absorb the load, they become resentful, and their productivity drops too. You, as a leader, are now doing interviews instead of leading. And when the new person eventually starts? Nobody’s at full capacity for months.
A 2012 meta-review by the Center for American Progress — drawing on more than 30 case studies across 11 academic papers — found that replacing a senior employee can cost up to 213% of their annual salary. Even for mid-level positions, the average sits around 20% of annual pay. For a professional earning $120,000 a year, that’s potentially $240,000 or more — to replace one person. One. And that’s before you’ve factored in the loss of institutional knowledge, the disruption to client relationships, or the drag on team morale that follows every high-profile departure.
This isn’t a people problem. It’s a profitability problem. According to Gallup’s State of the Global Workplace report, disengaged employees cost the global economy US$438 billion in lost productivity annually. That’s not a rounding error. That’s a business crisis being misclassified as an HR issue.
In Singapore, where the Ministry of Manpower’s Labour Market Report puts overall unemployment at 2.0% — and where job vacancies consistently outnumber unemployed persons — losing people isn’t just expensive, it’s existential. You don’t have five more waiting in the lobby. You have this person, and it is very much in your interest to understand what’s happening with them before they’ve mentally already left.
According to Gallup’s research, seventy percent of what drives employee engagement comes down to the direct manager. Not the brand, not the perks package, not the office. The manager. You’ve heard the cliché — people don’t quit companies, they quit bosses. It’s a cliché because it keeps being true.
The Real Problem: We Promote for Production
Here’s the thing most organisations won’t admit: the system itself is creating this problem.
The Chartered Management Institute’s Better Managers report (October 2023), which surveyed more than 4,500 workers and managers, found that four in five people who move into people leadership roles receive no formal training to prepare them for that transition. None. They got there by being excellent at their job — at the doing — and then someone handed them a team. Now they’re being asked to do less of what they love, less of what they’re good at, less of what got them promoted, and more of something entirely unfamiliar: developing other people.
And then we wonder why they revert to what they know. Of course they do. When we’re uncomfortable, we retreat to competence. It’s completely human.
Separate research from Unmind’s Closing the Leadership Skills Gap report found that a third of employees had previously left a job because of a bad manager. Not because of the company strategy, not because of the product, not because of the commute. Because of the person directly above them. And in most cases, that person wasn’t malicious — they were simply underprepared and operating in a system that never asked them to be anything other than productive.
Compound this with performance structures that measure everything except people development. I’ve sat with organisations where a manager’s entire KPI framework is built around output. Not one line about whether their team is growing, whether their people feel supported, or whether anyone below them is being prepared for the next level. We built the system that rewards managing up. We shouldn’t be surprised that’s what we get.
What Senior Leaders Need to Start Doing
If you’re running a business at scale, the question isn’t whether the loyalty trap exists in your organisation. It almost certainly does. The question is what you’re going to do about it.
Start here. In your next one-on-one with each of your direct reports, don’t ask about the project status. Don’t ask about the numbers. Ask this instead: Who are you developing on your team right now, and what do you need from me to get better at that?
If the answer to the first part is nobody — or a blank stare — you’ve just found your priority. Not theirs. Yours.
This isn’t about adding another KPI to an already crowded review cycle. It’s about where you put your sunlight. What you ask about consistently becomes what people prepare for. If you start asking about people development with the same regularity and seriousness that you ask about revenue, it will start showing up as a management priority. Not because you mandated it. Because you made it visible.
Loyalty Has a New Definition
One more thing worth sitting with — especially if you’re leading across generations, which most of us are now.
The idea that loyalty means tenure is largely finished. I spoke to a hospitality professional in Hong Kong some years back who had mapped out his entire career deliberately — a large chain for scale, a luxury brand for craft, a resort property for experience — collecting each posting like stamps in a passport. He wasn’t disloyal. He was strategic. And he gave everything to every employer along the way, right up until he moved on.
That’s the redefinition happening in workplaces right now. Loyalty is not how long I stay. It’s how I behave while I’m here. For senior leaders, that’s actually good news — if you create an environment where people are developing, being seen, and contributing to something that makes sense to them, you will get their best. Maybe not forever. But fully, while they’re with you.
The alternative — maintaining a system that measures everything except the thing that makes the system work — costs far more than most boards are willing to put on the table.
Your job as a senior leader is not to manage your managers. It’s to build leaders who manage theirs. And the only way you’ll know if that’s happening is to shine a light on it. Ask the question. Make people development a metric that matters. Start with the conversation you’ve probably been putting off.
Because somewhere in your organisation right now, two levels below where you can see, there’s a manager who nobody has told what good leadership actually looks like.
And they’re either raising or ruining the talent you’re going to need next year.
