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Thought Leadership

A New Twist on Turnover

Employee churn -- even when it involves your best people -- is not necessarily a bad thing.

Monday, January 9, 2017
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For years, the mantra of HR departments and businesses has been that turnover is inherently bad. Retention and low turnover are strategic objectives and there is plenty of information available on how to "solve" the turnover "problem." I do not mean to diminish the significance of losing key talent and the disruption that turnover causes, but I do wish to put a new twist on it and put these thoughts into perspective. There are positives of turnover that can outweigh the negatives in the long run. Even metrics and calculators that assess functional vs. dysfunctional turnover can fail to see things that I think are important -- that, for example, morale can actually grow rather than just suffer when turnover happens.

Dynamic organizations have people come and go, and yet their successful business models and reputations tend to keep their base of talent strong. The following are some of the positives that I think are often overlooked:

Healthy organizations have healthy turnover. By this, I mean that they have turnover above and beyond what is typically considered normal voluntary turnover, such as retirements or employees simply seeking different career opportunities elsewhere. Healthy turnover includes the loss of employees who are talented and were viewed as part of the organization's future. Too much depletion of talent can be damaging, but resilient organizations can tolerate intermittent "tough losses" of personnel. Small to mid-sized organizations, in particular, tend to have limited opportunities for career growth. Rather than resisting turnover, these organizations can even support employee departures in the name of having a developmental culture. The goodwill created by putting employees' careers first may lead some of them to come back after they develop their skills elsewhere (so-called boomerang employees).

Turnover opens doors for others. Organizations with strong retention and employee longevity can become stagnant, which impedes worker development and advancement. Without turnover, good employees have fewer opportunities. Therefore, the opening of doors is something that has a direct impact on employee morale.  

Turnover supports diversity. The mix of new and long-term employees increases the diversity of ideas in the workplace, and employers can see higher returns on productivity and creativity. This can pay dividends in terms of employee satisfaction, profits, and achieving diversity goals. At the same time, changeover can help move the needle on recruitment goals for women, minorities, and other underrepresented groups.

It is indicative of an innovative company. Industry leading companies are innovators, and innovative organizations will not only attract top talent but also lose talent more readily. Dynamic, creative people don't often stay put. Ideally, employers can find room internally in other areas and departments for these individuals, but this isn't always possible. Companies looking to appeal to millennials, in particular, must be especially conscious of the impression that they give. Millennials are seeking professional development and career opportunities and, when presented with a potential employer, they are likely asking the question: "Is this job a good stop along my unfolding and uncertain career journey?" The current career environment is increasingly mobile and non-linear and employers risk alienating younger workers when they promote an environment that appears rigid and only offers slow, linear career progression.

Turnover can lead to introspection. Healthy organizations ask why people leave through exit interviews, they learn more about their work environments and current leadership, and make adjustments based on these insights. Organizations can use turnover to trigger ways to develop current talent, enhance employee satisfaction, consider new benefits, create a more collaborative work environment, and so on. So, paradoxically, turnover can bring new insights into how to retain employees.

Turnover aligns with the idea of succession planning. Succession management or planning is something that industry leaders practice in terms of the acceptance of staff changes and strategic anticipation of future talent gaps and needs. There are many resources that exist on how to do succession planning well. The important thing, from my view, is that healthy turnover and succession planning go hand-in-hand. You can't have one without the other.

As the head of human resources for my firm, I accept the fact that I am going to lose good people -- including in my own department. Today's employees seek development and new challenges, and are not satisfied with doing the same thing for years on end. Organizations can choose to embrace that change will happen and view it as an opportunity to improve professional development opportunities for their existing employees. For us in HR, change must start in our own departments. We need to see turnover as something that happens. We can run from it or embrace it, understand it, and use it to our advantage.

Debra Jerome is chief human resources officer of the executive search firm Witt/Kieffer, based in Oak Brook, Illinois. With nearly 20 years of human resources and management experience, Debra focuses on recruitment and retention, performance management, employee relations, and training. She also oversees responsibility for human resources policy and workforce planning.


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