Is high turnover good or bad?
Some organisations idealise low turnover rates, believing it is a sign they are hiring good people, paying people well, fostering engagement and creating a positive work environment. But despite this, low turnover isn’t always preferable! It can indicate your employees are poorly selected and trained, overpaid, and complacent. In some cases, high turnover may actually be a good thing.
In any organisation, engaged people are usually loyal to their teams and manager, and make meaningful contributions their the quality of your service and deliverables. So, can high turnover be a good thing?
As Eve Ash reporting for Smart Company explains, “paradoxically, there’s something to be said for companies where there’s high staff turnover. Maybe some companies are such great places to work that employees feel ready to move on, and indeed do so.”
Some leaders believe that high turnover is an indicator that things in the organisation are going badly, and replacing and training new hires is expensive.
But what if you used high turnover to understand areas in your organisation that need attention, the changes that need to be made and how to streamline your processes. You can also use it as an opportunity to inject new talent and skills into your existing teams.
Here are some strategies to make the most of high turnover.
Use exit interviews to your advantage
“If exit interviews are handled correctly, a departing employee feels free to highlight the positives and negatives of working at your organisation and in turn, based on their feedback, you can improve the workplace’s internal dynamics and practices. Exit interviews thus become a chance for both parties to be refreshingly honest, instead of lying through their teeth to be free of each other.”
Beware: do your exit interviews reveal any patterns? Make sure there are no toxic types buried in your existing teams that are causing your attrition rate.
Harness the value of fresh talent
Not every hire will be perfect. Sometimes people are lacking in certain skills or cultural fit. Perhaps they stop enjoying their roles and become complacent. Their departure represents an opportunity for you to bring new talent in and take advantage of fresh skills and perspectives.
Review and implement effective performance management
High turnover may indicate you are not making the most of your performance management processes. Use this as motivation to review your current process, and implement an effective performance management strategy.
“Your performance management strategy should include:
- performance goal-setting — encouraging individuals to set their own goals;
- establishing agreed timelines and expected outcomes;
- day-to-day feedback amongst team members and managers;
- structured induction;
- targeted skills training;
- ongoing professional development;
- coaching; and
- periodic career conversations.
“It is not enough to simply attract good talent — they must remain engaged, challenged and given opportunities to develop. A two-way culture of giving and receiving feedback must be encouraged so staff feel confident to be able to give their managers feedback and be heard.”
Use turnover as motivation to stay competitive
Feel secure in the knowledge that employee poaching occurs regularly and letting people go is a natural recurrence too. When people stop performing or start to display a lack of motivation and engagement, a candid, but caring, talk may assist them in finding another career pathway that suits their interests, skills and abilities.
“Your ‘loss’ therefore can be another’s ‘gain’.”
“When it comes to employee turnover, don’t be like a great many companies that throw proverbial babies out with the bathwater. Develop a vision that takes into account the market’s realities and individual needs of both the company and its people.”
