Examining Employee Turnover

by Sharlyn Lauby on June 10, 2010

The new talk on the street is that the number of people quitting their jobs exceeds the number of layoffs.  I wonder if this is the first signs of the double and triple digit turnover that’s been predicted as the economy starts to improve.  Any talk about employees quitting always prompts a conversation about the different kinds of turnover.

Bad turnover is the kind you don’t want to happen (naturally.)  It’s when good people leave the organization.  Usually for your competitors.  People that took you forever to find.  They did a great job.

Good turnover is when people you want to leave – finally do.  Maybe they hung around because they’re set in their ways.  Maybe it’s because you didn’t have the spine to fire them.  Whatever the reason, they’re finally moving on.

But there’s a third kind of turnover that’s sort of a cross between the two.  I call it “set them free” turnover.  It’s when you hire someone who is off the charts fabulous knowing they might only stay around for a short time.

A couple of examples come to mind:

If you’re a start-up organization, you might hire a rock star to get the company going.  Usually that rock star is expensive from a compensation/benefits standpoint.  But you need their experience.  Once the company is up and running, the rock star moves on to their next opportunity.

Another example is an organization in trouble, they need someone with turnaround experience.  The ability to work long hours and make tough decisions.  They are there for the challenge (and possibly the bonus associated with turning the company around) but once that’s done…they’re outta here.

These are both situations where the turnover has mixed reaction.  The people involved are top performers and have done an excellent job for the company.  But you know the company no longer offers what attracted them in the first place.  Don’t be afraid of letting employees leave because you can’t keep them happy.  Just put the reasoning in proper perspective.

While turnover is a metric that all organizations should pay attention to, it’s important to understand what kind of turnover is taking place.  Is your turnover the kind you want – or need – to be successful?

Previous post:

Next post: