Is Employee Turnover Such a Bad Thing?

Column by Amy Hertling-Johnson

Amy Hertling-Johnson
Posted

Perhaps employee turnover is not as bad as we think. Maybe, just maybe, some turnover is good.

I recently attended a seminar on employee morale. The basic premise was that employees who are "happy" are better workers; they are typically more productive and stay in their jobs for a longer period of time. It seems that the basic measure of success or failure had to do with employee turnover. The implication being that if employees are unhappy, they leave. If they are happy, they stay.

As business leaders we are told that turnover is a measurement of failure and an indication that something needs to be fixed. But we know that many times this premise doesn't hold up. Employees leave for a whole host of reasons -- sometimes for reasons that have nothing to do with the employer and/or the employees' "happiness."

Truth be told, turnover can be an indication that something is wrong, and of course, it is expensive. Some say turnover costs between 10 and 20 times the employee's weekly wage.

However, let's balance out the negatives with the potential benefits. It can be difficult losing people, particularly people in key positions. There are though, some good things that can happen when you bring in a new employee. For example:

  • New Ideas. The new person may be able to bring new ideas, fresh thoughts, and a different way of looking at things.
  • Diverse viewpoints. Sometimes, over time, companies can become homogenous -- same age groups, same interests, same habits, etc. A new person can "mix it up" a bit, even unintentionally bringing a new perspective to the group.
  • Increased productivity. This seems counterintuitive, but oftentimes once the new employee learns the job, he or she actually performs better than the employee who left. The prior employee may have become complacent or just continued to repeat poor work habits.
  • Industry Knowledge. Turnover sometimes allows us to hire people from our competitors or related industries. Oftentimes these new employees can be a great resource for industry knowledge and trends.
  • New Customers. Depending on the type of position, sometimes customers want to "follow" the employee to his or her new company.
  • New Skills. A very common phrase from a new employee is "why do you do it this way?" Oftentimes the new employee brings new skills and experiences that help us do it better.
  • Competitive Salary. Usually when we hire new people we have to re-examine and assess the salary level. Sometimes (not always) we find that we can get the job done for less. Over time, salaries can creep up beyond the "market rate."
  • Upgrades. Most businesses have "A" players and "B" players. Turnover gives us the opportunity to try and hire "A" players.

So, yes employee turnover can be disruptive and suggestive of problems. But, it can also create opportunities -- opportunities that can create real value for a company. 

At Forté Human Resources, we only have only "A" players and very little turnover. But it does happen; employees sometimes leave. We always wish them the best and then always strive to make the best out of a difficult situation. Hiring the right person for the job can be difficult. If you need help, call us.