I recently met with a CEO who was proud of the fact that his organization had little employee turnover. He then proceeded to tell me how happy he was about the impending retirement of one of his executives, who had pretty much checked out several years ago.
For some, having little employee turnover may seem like a good thing. However, when we drill down deeper we usually find there is more to the story than meets the eye. In the above scenario, the CEO knew this employee was operating far below acceptable performance levels. Yet, he chose do nothing but wait it out. One can only wonder how many of his managers are doing the same with their employees. Hence, the artificially low employee turnover numbers. Imagine the impact this must be having on productivity throughout the organization.
I hope you will recall this story of the CEO the next time you encounter levels of employee turnover that are well below the norm. At least consider the possibility that a closer look at the organization may be required.
Here are three reasons why extremely low employee turnover may indeed be hurting your company.
1. Dead weight is weighing you down. Nothing holds a successful company back more than dead weight. Imagine for a moment that your team is asked to compete in a relay race with one member who can barely walk a mile, never mind run the distance required to even be considered a contender. Do you think your team stands a chance of winning the race? All it takes is one or two people to hold everyone else back.
Many companies do a horrific job of taking poor performers out of the business. The end result is the loss of high performers who tire of picking up the slack.
2. Nowhere to go but out. What if someone were to tell you that you had gone as far as you were going to go because the people above you were never going to leave? Would you stick around, knowing you had peaked at the ripe old age of thirty? That's what happens in organizations where no one ever leaves. The problem that often occurs in scenarios like this one is that the people you want to leave wind up staying, and the ones you want to stay leave.
Successful employees want to know that their efforts will be rewarded. Think about this the next time you allow employees to permanently take up space in your building long after they've outstayed their welcome. Then make room for people to advance in your organization.
3. Homogenization Imagine if you looked around one day and every employee in your firm approached situations the exact same way, because there were no new people to challenge the old way of thinking. Some of you might find this idea appealing, as some level of consistency can be good. But after a while, little would occur in terms of innovation and new products and services. Your firm would look exactly like every other company. That is, before these companies went out of business.
Take a closer look at the people who are in your company today. They may have been the right people to help you get where you are, but are they the right people to get you to the next level? Is it in their best interest to continue to do the same job in and out for the next twenty years? Most probably not.
Employee turnover is a natural part of the employment lifecycle. Companies who understand this and manage employee turnover live a longer and healthier life than those who don't.
© 2012 Matuson Consulting. All rights reserved.