The Peter Principle is alive and well in today’s middle management ranks: Most people are not prepared for a new job at the moment they begin it. As they advance in their careers and begin to manage others, their success or failure generates exponential effects – good and bad — for their organizations. Professor L.J. Peter’s insights specifically noted that as employees advance into leadership, soft skills take on more importance to their success than technical skills alone. It is proficiency in skills such as collaboration, conflict management and prioritization that distinguish an effective manager from one who damages the company.

Unfortunately for most businesses, while a small percentage of employees (about 5 percent in my experience) take the individual initiative to grow their soft skills, the majority believe it’s their company’s job to ensure their growth in these areas. Given this mismatch in expectations, employees too often wind up frustrated with their lack of advancement and look for opportunities to move on, perpetuating the problem.

The Business Impact of a Soft Skills Deficit

Payroll makes up a large portion of any business’ costs, so it is unsurprising that some of the greatest contributions to profitability lie in employee retention, engagement and performance improvement. Yet low engagement and high turnover run rampant across industries, which is why 71 percent of employees are currently looking for another job.

What does the soft skills deficit look like when you walk into the average workplace?

  • Depressed Productivity: stressed employees who work longer, produce less and feel undervalued
  • Greater Conflict: teams that spend more energy in unproductive coordination, conflict or conflict avoidance than in effective communication and collaboration
  • Missed Customer Opportunity: employees who are not effective brand ambassadors and are unable to communicate business value when engaging with customers and potential recruits

Here’s an example: Marty, a middle manager, had taken the initiative to revise a key process in his division to achieve greater operational efficiency. After trying to ram it down his team members’ throats, they rebelled and complained to Marty’s boss, who recognized that not only was Marty causing stress on his team, but he had unwittingly used divisional resources to pursue development that was funded elsewhere by corporate. The boss chastised Marty for duplicating an effort already underway; getting his team angry at him; not telling the boss, who could have informed him of the duplicate efforts; and setting customer expectations inappropriately. Marty felt undervalued and upset that his proactive efforts backfired so thoroughly. He began to consider leaving the company, despite an otherwise good job experience.

What was the problem here, and whose job was it to help Marty learn from this experience? Was the company at fault for failing to ensure that Marty’s boss had the leadership skills to coach him back to success? Was it Marty’s fault for not having figured out on his own how to sell his ideas better?

Soft Skills: The Link Between Employee Engagement and Performance

Too often, companies try to reduce employee turnover and address engagement by adjusting compensation and stocking the fridge with free soda, but Marty’s example offers us greater insight. Marty’s interest in looking for a new job wasn’t about compensation but about feeling penalized instead of coached. When his boss missed the opportunity to help Marty channel his good intentions into productive skills development, choosing to shame him instead, Marty immediately saw the upside to updating his resume.

As this example demonstrates, employee loyalty and performance are complicated. If you ask employees why they like working for their company, compensation is rarely at the top of their list. Efforts to “buy” employee loyalty aren’t usually financially feasible anyway, and they don’t necessarily work when they are budgeted, so most organizations use rewards and recognition to make employees feel appreciated.

Unfortunately, many recognition efforts miss the mark, too. While overt signs of appreciation — even as simple as saying “thank you” regularly – can positively impact employee retention, most employee recognition programs reward tenure instead of performance and, in doing so, reward endurance over performance.

Most organizations fail to recognize and address the subtle soft skills challenges that cause middle managers like Marty to struggle and feel unappreciated. Data show that most employers do not offer effective training and coaching for managers. Instead, they spend training and development dollars on senior leaders and hope it will trickle down to everyone else.

This strategy of underfunding training and coaching in middle management is particularly short-sighted because younger workers, who are quickly becoming the beating hearts of our organizations, highly value opportunities to grow and improve themselves on the job. In my experience, middle managers welcome interpersonal skills training and quickly adopt its lessons when managing their teams. This enthusiasm ensures that the company’s training and coaching investments directed at middle managers provide immediate returns in the form of performance and productivity.

Using Soft Skills to Advocate for Soft Skills

Professionals in corporate training departments at organizations big and small are frustrated by executives who say that they want managers to be better at engaging employees and then either underfund and under-support development programs that could help them build engagement skills, provide poor role models themselves for what soft skills leadership and management look like, or both. It’s tough to convince someone who doesn’t have good soft skills that those skills are important to help others develop.

However, the leaders who are most successful at bringing new approaches to soft skills development to their companies all have one thing in common: They practice the art of soft skills leadership themselves. They find executive champions who believe in the power of soft skills and, together, partner to build awareness of how soft skills development can increase engagement and outcomes. The secret to building a culture that values soft skills is to use them in building exactly that culture.