Employee Turnover: Can It Ever Be a Good Thing?

First, a few caveats before you get too upset or excited about that title:

1. There is never an excuse for ignoring the broader employee voice, especially when it is speaking about organizational challenges.

2. There is never an excuse for mistreating employees. How employees feel at work matters to both your bottom line and to each individual life your organization employs.

3. Turnover should always be a cause for examination, especially since turnover rates are rising and replacing employees is costly.

So, what is this article really about? It's about the need to understand more deeply what drives turnover (or lack of turnover) in your organization. I see two primary scenarios to examine: 1) Turnover is actually too low, or 2) turnover has gone up, but that may not be a bad thing.

The Problem of Presenteeism

Let's start with scenario one. As an HR pro, you may have heard company leaders say something like this: “We clearly don't have a culture problem because we have really low turnover.” Yes, this may mean your culture isn't totally toxic, but it doesn't guarantee you aren't leaving a ton of opportunity on the table. Enter the concept of presenteeism: when an employee shows up to work every day and gives just enough effort to get by.

In many organizations with long-tenured employees, the status quo of “good enough” can become the comfortable enemy of “getting better.” In that situation, your employee value proposition risks being downgraded to “a steady paycheck that doesn't require too much effort.”

The good news is there's an easy test to determine whether your workforce is afflicted with presenteeism: Gather feedback on employee engagement levels and plot that data against employees' intent to stay. If you have low or moderate engagement but high intent to stay, you've got pockets of presenteeism. You can then break down the data by departments or other cuts to see where interventions may be needed to help bring people back to life.

The important thing is not to just write those employees off. Engage with them on what work they enjoy most, where their strengths are, and how they want to develop — even if it means taking another role in a different part of the organization. Ultimately both the business and the individual will be better off.

Who's Jumping Ship?

Let's look at scenario two: Turnover has been going up. Perhaps you're even embarking on new initiatives to invest in your culture and are confused to see people leaving while you're working so hard to make things better.

The first question to ask is: Who is leaving? With any turnover, it's important to know whether it's your high-performing or high-potential employees who are jumping ship, because that should obviously trigger more serious alarm bells. If it's your lowest performers who are leaving, that is obviously less of a concern.

The more complicated nuance here has to do with culture fit. If your organization has embarked on any sort of new strategy or cultural shift, it's possible some people aren't a fit any longer. Some employees may not buy the need for change or have the desire to come along, so they'll leave instead.

This can be healthy turnover because it creates the opportunity for you to bring in new people who better align with new expectations and who perhaps even have new skill sets. Do keep in mind, though, that if you're just looking for new technical skill sets, employee development is often a far better path than hiring new employees. (See Amazon's recent commitment to train thousands of existing workers for higher-skilled roles.)

The extent to which culture fit causes turnover is tough to detect, but exit surveys or interviews are the best method for doing so. It's always possible employees are leaving not because they have different workplace preferences, but because they aren't being fully supported through the change process. If support issues go unchecked, you risk losing high performers. They'll leave outright, or their engagement will drop out of frustration and you'll find yourself in scenario one.

In approaching employee turnover, remember to respect the data but make human decisions. Whether high or low, turnover can be deceiving as a standalone metric. What's important are the individuals behind that number. Could they perhaps be more engaged at work and living more fulfilled lives? Are they overstressed by new expectations? Would supporting them in finding new roles elsewhere actually be best for the employee and the business?

A single number can't answer these questions, but a comprehensive listening strategy and a culture that supports positive leader-employee relationships can. Without that deeper picture, incomplete data risks being worse than no data at all.

David Shanklin

David Shanklin is managing director, culture solutions, for CultureIQ.