Last week one installer didn't show up for work, this week another gave notice and your secretary announced that she found another job—come to think of it, you've lost a lot of employees throughout the past 18 months. Looking back, however, you realize that one departing employee had been a chronic problem in terms of attitude and absenteeism and one moved to another state to be closer to his wife's family.
So, is turnover good, bad, inevitable or inconsequential?
It depends, says Nan Andrews Amish, a management consultant in El Granada, Calif. "Turnover can be a very positive thing. New people bring new ideas, new approaches, industry expertise and data from wherever they were last." Of course, she adds, "when an exiting person has significant intellectual property, significant client relationships or knowledge of complex processes, the cost of training a new person and getting them up to speed can exceed the person's salary by a factor of two."
Obviously, there are some staff members whose exodus results in a collective sigh of relief. Most organizations have those folks and it is one reason that some level of turnover should be considered healthy.
Focusing on What Matters
Rather than focusing on keeping as many employees for the longest period of time, focusing to keep the right employees on board is ultimately the most productive.
"A very common mistake that a lot of employers make," says Joel Zeff, a workplace expert and author of Make the Right Choice, "is that they spend so much energy and so much of their resources trying to make a very small group of people happy." Those people, Zeff says, are unlikely to ever be happy, so the effort is misguided.
"If you feel in your heart as an employer or manager that you've created a strong foundation and given opportunity and positive support, and still you're not gaining returns, it's time to cut the strings," Zeff says. Not cutting the strings, he says, is likely to "infect other people—you can think of it as a virus."
Managers, Zeff says, should cut their losses with non-performing employees so they can spend more time and energy working with high-performing employees.
"You should be spending your time with your good employees, the ones with the great attitudes," he says. "You should be making sure they have what they need to continue their passion. They're the ones who are going to make you successful. If it's not the right fit—just like a marriage—you need to move on and they need to move on."
Learning and Refining
Of course, not all turnover is good. Turnover can be disruptive to production, to operations and to culture. It can result in significant recruiting and training expenses and can have negative impacts on productivity. If your business is growing and you're competitive within your market area, then turnover may not necessarily be a bad thing.
"While there are direct costs of recruiting and lost productivity when the turnover occurs, that is only including a small percentage of the true costs. The bigger problem is that all of the people who stay employed may be unhappy, won't treat customers well, won't do their best and won't be motivated to improve," says Michael Kanazawa, chief executive of Dissero Partners, an Oakland, Calif.-based firm that specializes in company transformation.
Just remember: When analyzing turnover, it's important to be objective and analytical. If your business is growing and you're competitive within your market area, then turnover may not necessarily be a bad thing, especially if those employees lost were under-performers. On the other hand, if errors are up, productivity is down and you fail to meet customer needs in a timely fashion because you don't have enough people, then turnover may certainly be a concern.
Communication is Key
Keeping the lines of communication open can help companies stay aware of issues that may be affecting employee satisfaction. Open lines of communication begin during the hiring process and continue throughout an employee's tenure.
A "realistic job preview" is important to ensure that new hires know, specifically, what they're "signing on for." Nobody wins when a position or organization is over-sold or misrepresented. Fit is important and will vary from one organization to another, says Kath Desmond, vice president of human resources at 1800mattress.com.
For managers and the organization, encouraging open communication—even when that communication may sometimes be negative—can provide early warning signs of impending issues of concern. Developing a culture of openness and responsiveness creates an environment where employees feel free to raise valid concerns rather than simply choosing to quit.
