Bad bosses is the No. 1 reason employees leave their jobs, he said. Without good managers, workers are stressed, anxious, unhappy, disengaged and don't properly do their jobs.

He urged a roomful of HR professionals to hold managers accountable and to chose managers carefully.

"In an ideal world, 70% to 80% of a manager's job should be to hire, develop, engage and retain talented people," he explained. "We need to not only tell them it's important; we need to show them it's important."

Often, Allen said, the issue of bad bosses stems from the fact that managers are often successful workers who are just being promoted into a position they have no right to hold.

"A big mistake we all have is we promote people to be managers because they're really good at whatever job they had before," Allen said. "So what you're doing is taking away a top performer away from a job they're really good and giving them a new job they're not good at, and then they become a crappy manager."

Instead, Allen said, HR departments need to take the time and have the patience to look for good managers who fit the bill of what employees and company execs need.

"Good managers are good communicators; they have good people skills; they inspire," Allen said. "Make sure our managers have the knowledge or skills to do what we're asking them to do."

Allen also shared his secret formula for stopping this critical mistake of promoting unsuited employees into managers: Stop doing it.

"We do this across all industries," he said. "Every time I say this to HR people they have a good excuse – 'We're not doing this' [Or] 'It's the way we've always done it.' But you can find a way to stop this practice. I'm begging you to find a way to make this stop."

To put the mistake into context, Allen told audience members to think about how using the same logic would mean for other big decisions in your company.

"We say our biggest asset is our people. Our second-most valuable asset is our money," Allen said. "Do we ever hire people to manage our money who have no skills to do so? Would you entrust your money to someone who is careless, who knows nothing about finances? It sounds simplistic, but we need to find a way to stop this."

Additionally, it's important to find ways to reward the talent you do have – without just considering promoting them to a manager, he said. Among his ideas were: Reward them with more money; give them more challenging or rewarding work; give them more responsibility or the opportunity to manage projects.

"The path to success is attract good people in your organization, keep them engaged so they're working at a high level and retain them so they're working for you," he said.