Positive and Negative Turnover… What’s the Difference?

While turnover can be costly and affect employee engagement, it can be both positive and negative. Each company has to find its own sweet spot. If you’re so inclined, you can figure out what your current, annual turnover rate is by using this formula. Regardless of a decided turnover benchmark, here are my top 3 reasons for when turnover is bad and when it’s good.

 

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Turnover is BAD if an employee leaves because:

Poor Pay and Benefits – If an employee is solely leaving for a slight pay increase or small additional benefits, it could be a red flag. Both should be regularly monitored to ensure your company is staying competitive. A quarterly or annual statement showing a monetary value beyond employees’ pay may be helpful.

Ineffective Onboarding – When an employee does not feel welcomed or when they don’t understand their job, bad turnover increases. Companies essentially don’t give a new employee the chance to be successful because they don’t put in the effort to onboard, which is a huge waste of time and money.

Lackluster Leadership – Training is a must for all leaders to ensure they can support the needs of a team. Equally as pivotal is reminding a hiring manager of the importance of picking the right fit for their team and hiring for personality. Employees will leave a bad boss even if they love the company.

Turnover is GOOD if an employee leaves because:

Disconnect with Culture – Employees who refuse to follow the company’s determined culture can be a setback to the organization. If an employee leaves that is not the right fit, it will be a positive experience for that employee and the team.

Lack of Performance – When someone under performs, it drags down the whole team. By providing honest feedback and having tough conversations, this type of turnover will be positive for the entire company, and someone more qualified can fill the spot.

A Drama Starter – If your employee complains about everything or resists every new change, it might not be such a bad thing to see them go.

AND one in between: Highly Tenured EmployeesTeam members who have been with your company for a while provide expertise in the field, are a testament to a great company, and can impact others in times of change. Alternatively, team members who have been with your company for a while can be resistant to change, stuck in their ways and completely disengaged.   While you have to gauge your own employees based on performance, tenure can provide a gray area for turnover.

Losing a solid employee is tough, but it’s harder to keep a poor performer who drags down your team. By determining a healthy turnover rate and really looking into the reasons why someone leaves, a business can fully determine whether the exit was good or bad and what they need to do moving forward to keep the best talent.

Sharing HR ideas and thoughts is my passion. Follow me on Twitter by clicking the link on the right!

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