The Dilemma Of Employee Turnover

Is Employee Turnover Really Something to Avoid?

For the last couple of years, employee turnover has become one of the organizations’ major concerns, and this topic has become a common subject of HR talks. The pandemic, remote work possibilities, and, as a result, changing expectations have taken the blame (not the leadership, by the way). For instance, a colleague informed me about a sales team in the insurance industry that has a turnover rate of 60%, which left me baffled. Wasn’t turnover expensive due to the loss of knowledge, recruitment and training costs, as well as rising compensation? Interestingly, despite such high turnovers, companies still seem to be making record earnings.

We all know that having 0% employee turnover is detrimental as the organization and its people stagnate, making change an impossible dream. Furthermore, there are employees whom we may want to let go of at some point, such as low performers, energy vampires, and unethical individuals. Will losing them harm the business? Sure enough, the answer here is no; actually, we want them to go, preferably to the competition. Furthermore, sometimes, when urgent change is inevitably needed, it is easier and faster to “change” the people instead of changing them.

So I’m proposing that perhaps the question should be not the turnover number but whether employee turnover is truly something to be avoided.

After 30 years in business, I have concluded that high turnovers are not a major issue for companies, but losing talent is. While turnover is not desirable, it is often inevitable. The number of job applications has increased significantly in recent years, indicating a surplus of the available workforce. It’s not a myth that having happy employees leads to happy customers, but achieving this level can be difficult and costly. Consider we divide our workforce into two groups: talents with experts and leaders as one category, and everyone else; we can focus on the former group. Experts are vital to running the organization smoothly, while true leaders are essential for a successful future. By identifying the talent group and focusing on their happiness and sustainability, they can guide, mentor, teach, motivate, and for sure find replacements for those who leave.

In this approach, companies can invest more in the well-being, development, and retention of the talent group, which is by far smaller and costs less. The turnover rate of this “talent” group is far more critical and should be measured separately. The others will come and go as better offers will always be on the table, encouraging them to make a happy move.

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