There is serious pressure for organization leaders to engage employees and hit peak productivity. In 2017, 56% of CEOs reported “recruiting and retention” as primary concerns. A company cannot function without its employees; individuals that have valuable skills and training that can take weeks, months or years to match. So, of course, HR is in overdrive, managing engagement, strategizing long-term retention plans and calculating turnover rates. While those elements of talent management should never be overlooked, leaders may take comfort in the fact that there are some positives to seeing employees go. What benefits could employee turnover possibly have?56% of CEOs reported “recruiting and retention” as primary concerns. But could #EmployeeTurnover have benefits? @ClearCompany has some insight:
Improves Talent Potential
Employee turnover can sometimes be an indicator of moving towards success at an organization. When an organization fosters continual growth, there’s a give and take. Some employees will meet the challenge that comes with high growth and continue to fit the culture while others hit setbacks, feel a disconnect from the strategy or want to grow in a different direction. In all those situations, it is better to exit the employee than force an employee to fit to a culture and vision they normally wouldn’t.
No matter how talented, an employee who doesn’t believe in the business strategy, culture or mission will not be as successful as a more aligned employee will be. And without turnover, you are not making room to hire, retain and engage more A Players.
A more extreme example of this is seen in Jack Welch’s stacked ranking. Welch, the then CEO of General Electric, would annually evaluate employees on a bell curve where the top performers, or A Players, made up 20% of the company, average workers held 70% and the bottom 10% were considered underperformers. Those in the 10% were fired under the belief they were harming the potential of the company through preventing room for high performing employees to join the team. While this may be an extreme case, if your low performers are churning out at a higher rate than your top performers, you are actually creating room for a higher percentage of top talent.
Incentivizes Productivity and Avoids Complacent Work
When an employee leaves, there is a role to be filled. In some cases, your organization will be able to quickly recruit, train and hire. Those more advanced positions can be tough to fill and have a more negative impact. Yet, sometimes in those moments of shuffle, previously unrecognized A Players emerge. First and foremost, the opening could be an opportunity for remaining employees who are compelled to prove their proficiency within the role.
On a similar note, the productivity of employees is tested. Regular or high employee turnover forces leadership to take a critical look at the remaining team. As A Players emerge, so do under-performers. Though a stacked ranking system might not work for your organization, this time of reflection can help managers see and address performance issues in ways that drive productivity without losing skilled workers.
Turnover Can Create Talent Success
As we’ve been discussing, not all turnover is bad. However, if your organization’s turnover is comprised of any significant percentage of your top performers, you are going to want to take immediate action to retain the right employees.
On the other hand, if you are consistently seeing B or C players leave on their own accord, it may be a sign that your performance-driven culture or compensation plan is accomplishing its intended mission: retaining and engaging the best of the best. Parting ways with a low performer or even a middle-of-the-road employee can be for the best, but only if you are replacing them with A Players. Those new hires should challenge the status quo, bring ideas from previous organizations or simply have a fresh take on program or strategy that hasn’t been refreshed in too long. No matter what drives the change, the organization is able to capitalize and, in turn, better compete within their industry and market.This might be hard to believe, but employee turnover can be a good thing for your organization:
When you hire, retain and engage the right people in the right role for the business need at hand, and deploy them against your goals at a higher rate than the competition, you have achieved Talent Success. Clearly hiring top talent is a goal that takes a combination of tactics and strategy to achieve, however turnover can play a helpful role in increasing the amount of true A Players you employ.
As a Marketing and Event Specialist, Meredith coordinates best-practice content and brand-awareness events for ClearCompany. With her career in HR tech, Meredith works closely with HR practitioners and is passionate about providing them with the tools and information they need to succeed.