Who is the best match for your next opening? Should you look outside or hire from within? The jury is still out.

Forbes recommends hiring outside for better performance. What if, however, you sided with business leaders like Jim Collins and instead of incurring the cost of hiring, working with a search firm and training, held on to current employees? What would it take to retain top talent? The answer can be narrowed to one thing—better managers. The very best managers are coaches, helping employees meet their maximum potential.

When 1 million US workers report to a recent Gallup poll that the number one reason they would quit is a bad boss or immediate supervisor, the problem is obvious to see, but not so easy to correct. When this statistic is followed by the fact that 84 percent of employees will be looking for a new job in 2012 according to a Manpower survey, the need for a solution becomes imperative.

The solution is turning supervisors into coaches, and it can begin with a three-step process.

While there are multiple frameworks and models for coaching instruction, the most important first step is to provide a standard for managers. Expectations must be in place that the manager’s job is not to create to-do lists or even execute individual work; rather, the manager’s job is to help his or her employees excel in their work as a coach. Managers, as they transition into the role, can often remain mentally in their old jobs, despite the title change. Their new job is to expand their purview in order to accomplish the larger mission, which is always essentially people-centric. Managers should know that this is the expectation: their supervisors must also be watching to ensure a successful transition to the new role.

As previously stated, clear expectations are essential so that as managers and employees evaluate themselves (and as they are evaluated), there are clear criteria for movement and also assistance to reach the next level. Employees are promoted because they excel at their individual jobs. However, they may or may not have had time or opportunity to hone management skills before they are promoted to a management role.

For a select few, these skills occur naturally, but for many, they must be taught. A mentor system provides the support to ensure that the crucial change in work habits and priorities is made. Mentors can come from without, but internal team members will understand the culture and business objectives best. Those managers who have access to not only a mentor system but ongoing education are the most likely to excel at their role, creating a satisfying career for themselves and for their employees.

While the opportunities for continuing education are endless, lunch and learns are an easy, effective and often-used option to provide information new and experienced coaches need. Continuing education can provide information but also a sense of cohesiveness in often diverse management teams. Some potential topics for such events could include:

• Creating consistency in the interviewing process through use of behavioral interviews.
• Fostering a non-confrontational interview environment.
• Refining report-building in interviews.
• Finding candidates with relevant experience who will fit well into the company’s culture.

When you look at your team, are 4 out of 5 searching online at home (or in the office), looking for their next job? Or are you doing everything you can to keep the top talent on your team?

Coaches create best practices and encourage maximum productivity, in addition to providing increased job satisfaction for themselves and their team. Better employee engagement, better management and a better talent pipeline is possible when the management paradigm is shifted from managing to coaching. Providing your team with online tools such as goals management, and training and career management have to be a top priority for you as you look to move your business forward.