Companies of all sizes go to great lengths to retain workers, but turnover is not necessarily a bad thing. Sure it will cost a business a lot of money if a large portion of their staff is leaving every few months, but it’s equally costly to keep underperformers or the ones who’ve lost the edge.
“Retaining staff is important for team stability and morale however it doesn’t always make sense to exert energy on desperately trying to cling on to someone who has disengaged and already has one foot (along with their motivation) out the door,” says Paul Slezak, co-founder of RecruitLoop.com, the recruitment Website. “Managers should focus on creating an environment where people want to stay, but once the passion is lost, let them go.”
There are a multitude of reasons companies should embrace turnover. While you want to hold on to the stars and work horses, it’s the low to medium performers that you may want to let go of. “Some employees are complacent,” says Susan Heathfield, the guide to human resources for About.com and a business owner. “They are happy getting OK raises, OK reviews and OK everything. Finding someone much better, more excited, more motivated and more engaged is easily done even in today’s job market” where there is a shortage of highly skilled workers, she says.
When a low performer leaves it saves the company the cost and headache of trying to improve their performance or give them adequate chances to turn around before parting ways, says Heathfield. It also gives it the chance to replace that low performer with a potential star, she says.
A good way to gauge if it’s worth holding on to an employee is to adopt the “Rehabilitate or Terminate” model, adds Slezak of Recruitloop.com. If there is an employee who seems to be losing motivation or is showing signs of low morale or worse toxicity, Slezak will ask himself can this employee be rehabilitated and turned around or is he or she a lost cause. “If I couldn’t rehabilitate then it was time to implement a strict performance management plan,” he says.
But less than stellar performance isn’t the only reason to let employees leave. Often when a company changes its mission or business strategy there will be those employees who don’t agree or who can’t seem to change along with the business. They will only bring their co-workers and the business down if they stay. Take Heathfield’s experience as an example. Her own company dramatically changed direction this year, reorganizing and redesigning the business. As expected some employees didn’t share the new vision and after some one-on-one coaching it became clear they no longer fit with the organization and Heathfield saw five employees leave. “When the vision separates like that those employees often start seeing the writing on the wall,” she says.
Sometimes the employee may be a dedicated, loyal, punctual hard worker, but it’s the inability to embrace innovation that’s the driving motivation to see the worker go. “No matter what the industry, most organizations are putting a lot of emphasis on innovation,” says Seymour Adler, partner in Aon Hewitt’s talent practice. At the same time there are many employees who are married to the old way of doing things. While they don’t mean to hurt the company, their way of thinking constrains and restricts innovation, says Adler. “With people who are used to doing things a certain way you may get a static and stable workforce but you may be paying the price with respect to innovation,” he says.
A growing reason people go, and one that may leave companies less than thrilled, is generational difference between millennial workers and their older counterparts. In the past job security and a pension was the main attributes of a great job but these days millennials are used to jumping ship after a couple of years for greener pastures and would balk at the idea of staying with the same firm for more than five years let alone twenty. While companies go to great lengths to try to keep their top performing millennial workers, Adler says companies need to embrace this trend but do everything possible to keep in touch in case they ever want to come back. According to Adler smart organizations will take the longer term view and stay in contact by making them part of the alumni network, connecting with them on social media and making sure they are part of their LinkedIn network. “Some of my clients are wringing their hands around that because they are still operating in a 1980’s mindset,” says Adler.
“Forward thinking organizations know it’s the way it is. The very talented may leave in two or three years but that’s ok because leaving may not be forever.”