It can be easy for those outside of human resources to see any turnover as bad news. I’ve certainly seen executives question turnover rates without understanding what’s behind the numbers. From an HR standpoint, we know that there’s bad, good and neutral turnover, and to categorize it all as a reflection of organizational management isn’t necessarily a fair assessment. Even still, we, as human resources professionals, often use an overall turnover rate as a way of measuring whether or not we are fostering a positive corporate culture, offering appropriate recognition and leadership opportunities, hiring the right people in the first place and staying competitive with our total compensation.
So if we are going to use turnover as a measure of our own job performance, it’s vital to understand what good turnover looks like and how it differs from bad turnover. When determining whether or not specific instances of turnover are bad or good, there are many factors to measure. These include employee performance, skill and contribution to the company, how difficult it will be to replace them, their motivations for leaving, where they go when they leave you (to your competitor?) and how critical their role is to the success of the business. It can also be helpful to categorize employees (for turnover rate purposes only) by whether or not they are a top performer, average employee or someone who does not meet expectations.
It goes without saying that losing a top performer is never a good thing, though it may be neutral depending on certain factors, such as their motivation for leaving coupled with how easy it is to replace them. However, beyond the top performers it can get a little hairy.
For help with determining whether an instance of turnover helps or hurts, take a look at several scenarios below and see specifics on why it was good turnover.
- A low performer chooses to leave
This is ideal as long as they were given adequate training and development to come up to a satisfactory level but even so, never met expectations AND they give advanced notice so someone else can be hired to fill their role or plans can be made for co-workers to temporarily carry their load. - A low performer is terminated
Though termination isn’t ideal, it is sometimes necessary and even good. This is especially true when they were given adequate training and development to come up to a satisfactory level but even so, never met expectations. - An employee who negatively impacted company culture
It may be tough to replace them, but depending on how they affected those around them, you could begin seeing positive impacts even a few days after they leave making it well worth it. - An employee who notoriously perpetuated workplace drama
As with the above example, the value of getting this person out is usually worth the trouble of finding someone to replace them. - An employee who was “grandfathered” into their position
but who ceased to provide value some time ago leaves the company. If they were more of a figure head than a productive part of your company, then little harm occurs when you lose them. - A low or average performer
And is replaced internally by an above-average performer. This is ideal and can also boost morale as employees see that hard work pays off. - A complainer
This is an employee, who is known for offending others, whether or not complaints are ever formally filed. This person not only brings other employees down but is also a liability, making it well worth it to see them off.
These are just a few examples of what good turnover looks like, but it’s also important to evaluate the factors mentioned above and determine how you’ll weight them. Remember that turnover is a valuable way to measure your HR department’s performance as long as you don’t get caught up in the numbers and forget to look at the impact, whether positive or negative, that each “loss” had on your organization.
How do you help others outside of HR see the value of good turnover? Tell us about your experiences in the comments section below.
Learn more about employee turnover from this informative PayScale whitepaper on the subject: Turnover, the Good the Bad and the Ugly
The factors are well elaborated.
All said and done, there has to be a comparison with some bench marks at least for comparison. How do we benchmark then?
With benchmarks it’s really different with each employee. You need to take a look at their overall behavior at the company and how many times they migh’ve done one of the following (or other) scenarios. I’ve had some employees who are happy, but are complainers in general. If you see a shift in behavioral patterns, coming to work late, leaving early, falling behind on work, or any trend outside their normal behavior I would take a closer look. They might be disengaged from the workplace for several reasons including unhappiness or a life issue. It’s hard to set a standard… Read more »