Does High Turnover Have to be a Bad Thing?
Denise Hummel Isaacson
Fractional CEO and Interim Executive, Marshall Goldsmith's 100 Coaches (Start-Up to Enterprise), former EY Principal, SaaS Founder, Board Member, Angel Investor
The latest LinkedIn workforce report highlighted an interesting trend. While hiring remains high, albeit slowing, so is turnover. I have discussed how job candidates are becoming pickier than ever when choosing where to work because, with good post-pandemic job growth and record-high savings per household, the American worker has the luxury of time when picking their next career step; at least for now. As we continue to process these trends and the post-pandemic job market, I begin to wonder: does high turnover have to be a bad thing?
Before I continue, let me stress that I do not expect any executive, HR, or talent professional to ever truly embrace the idea that turnover is good. More often than not, we should be discussing ways to reduce turnover, and we have already discussed that extensively in this newsletter series. But in witnessing this unique time, I thought it was a good time to discuss the silver linings of turnover given the economic conditions we are experiencing.
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Turnover is a bi-product of competition
Companies are competing more than ever to attract and retain talent as their turnover keeps pace with hiring. As job growth continues across most sectors, companies are dipping into a healthy supply of talent to feed economic demand. This is helping give employees leverage to demand better wages and work conditions that should ultimately drive up the quality of workplace culture and productivity. This balance should continue to help fuel innovation and growth for both individual professionals and their companies.
On the flip side, a stable turnover rate can also help fight off stagnation within a workforce. If a manageable number of employees are growing out of their positions and a healthy number of eager candidates emerge to replace them, that highlights a cycle of growth and upward trajectory for a company’s talent pool even if it means that it comes with some of the downsides of turnover.
This pace and cycle can theoretically continue to fuel growth assuming economic and hiring growth also remains high. It will be important to monitor if companies are simply coping with turnover as a byproduct of feeding their short-term bottom line or if it is for the reasons discussed above.
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Turnover forces us to evaluate how we do business
Turnover rates are among the most crucial metric a company can track for obvious reasons. Understanding turnover rates and the factors behind those rates and trends is crucial to improving the way business gets done. Without an understanding of turnover and a commitment to constantly adjusting to the story it tells us, businesses will ultimately be flying blind which is far from a sustainable practice.
From hiring to training and leadership development, turnover forces us to take inventory of the true state of our businesses relative to ever-evolving social and economic trends. This is the nexus where business, culture, and community collide. If leveraged right, it will help guide innovative practices that can improve the way we hire and grow employees while also driving productivity.
What does this mean going forward?
We must continue to innovate the way we understand turnover, culture, and employee development as we look ahead. This ecosystem is changing more rapidly than ever and is pushing companies to new heights, or to the brink, based on their ability to adapt with its evolution.
Let me know what you think! What is the right balance between good and bad turnover? What practices can we employ to leverage our understanding of turnover to drive better business practices? How can we continue to push competitive practices that benefit career growth for employees and talent acquisition for companies? Let us know in the comments!
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Fractional Chief Learning Officer. Founder at XLO Global, LLC. I help learning teams drive more business value.
2 年For 20 years, I worked in businesses where turnover regularly ran north of 75%+ in some roles. Most of the time, that level was accepted. Sure, we always wished it would be lower, but the nature of it was a first job. Most first jobs are built to have "high" turnover as they are entry points into the world of working. In most recent role, instead of focusing on turnover, we talked more about TENURE - meaning how do we get people to stay longer? Not forever, because that wouldn't be good for them, or for us. We didn't want people staying for the long-term in am entry level role, often at a minimum wage. High turnover over is a relative thing. Not always bad.
Retired from the Rat Race
3 年“Work Harder” is one of the worse concepts that is encouraged in schools, some cultures and in workplaces. Unfortunately, organizations do not value working smarter and more efficiently. They reward the smarter workers with more work and allow the lower performers be themselves.
Award-Winning Director | VP, Facilities w/ Expertise ? Strategic Leadership | Business Operations Management | Quality Assurance
3 年Job satisfaction seems to be the driving factor when it comes to high turnover!