Looking at Low Employee Turnover

Low employee turnover should be great, right? After all, it takes time to hire a new employee, and that translates into decreased productivity, revenue, and innovation. (See the interesting article from GlassDoor on this topic.)

But maybe low employee turnover isn’t as positive as it looks at first glance. Stephanie Vozza of Fast Company tells us why in an article that presents the ideas of David Shanklin, managing director of culture solutions at CultureIQ.

The problem with low turnover

According to Mr. Shanklin, “In many organizations with long-tenured employees, the status quo of ‘good enough’ can become the comfortable enemy of ‘getting better.’” What he’s saying is that employees who have hung around a long time may be physically present but not really  engaged in their work, trading off engagement for a steady paycheck.

When high-performing employees or those with good potential leave, managers should be concerned. And they should assess company culture. Mr. Shanklin notes that an organization’s purpose and how employees treat each other are key. He says, “It’s said that people don’t leave companies; they leave managers.” I think that’s true. Managers exemplify organizational culture and when people leave a company, they often say things like “I couldn’t stand working for her” or “He was a jerk, but everyone looked the other way.”

Regarding organizational purpose, employees want to stay if they share an organization’s values and feel as though they’re making a difference. I think that applies even if they might be able to make more money elsewhere. Mr. Shanklin believes that if companies make their values “come alive,” employees will be able to discern whether they are—or are not—aligned.

The benefits of turnover

Just as low turnover isn’t necessarily a good sign, higher than normal turnover isn’t always bad. Managers and HR professionals should take a close look who is leaving.

Let’s say an organization rolls out a major new strategy or a big cultural change—no more telecommuting, for example. The folks hitting the trail may no longer be a good fit. Those hiring on may be more enthusiastic about what they see as a good opportunity to contribute work or they may bring in the kinds of skills the rejuvenated organization needs.

Mr. Shanklin recommends exit interviews as a way to pinpoint what is influencing turnover and what kind of employee is leaving. I agree in principle but can’t help but wonder how freely people really speak in exit interview.

And now a petite bonus: This lovely video from Jay Shetty