Good Turnover, Bad Turnover

Employee turnover, the number of employees that leave your organization each year, is an underused metric that can tell us a lot about an organization. Many organizations don't even track it. Others simply shrug off the data. They rationalize that all turnover is the ex-employee's fault. However, top performing companies tend to track turnover by various categories (voluntary, involuntary, by department or manager, by age group, by ethnic group, etc.). And they make adjustments in their processes to ensure that what turnover they do experience is good turnover.

What do you mean, "good" turnover? Isn't all turnover bad?  Not at all. Some turnover is good. A recent hire's performance starts to slip after about 6 months on the job. Management intervenes and gently tries to get the employee back on the right path, but the employee resists all efforts to rehabilitate and begins to have a negative impact on the team. The employee eventually quits or gets fired. The rest of the team thinks, finally! This is probably good turnover. An organization that holds onto poor performers without attempting to bring their performance up to standard hurts the morale of those who are delivering solid or even excellent performance. Which often leads to bad turnover.

Bad turnover is the turnover that's often dismissed by management. That's when a good worker gives her two week notice because she is frustrated that management is unwilling to address the poor performance of her coworkers. Or the employee who is struggling during his first 90 days, but no one is helping him master the skills or learn the ropes. He could have been a solid contributor if someone had just taken a little time to show him how to be successful. Finally, there's the employee who leaves your organization for a very small pay raise, indicating that his loyalty to your organization was pretty thin. Loyalty that you might have earned with some minor culture adjustments.  

Here are some generalizations about turnover:

- Voluntary Turnover occurs when an employee quits on your company. If this number is high, it's generally a bad thing. People join companies but quit bosses. If your voluntary turnover is high, look at the soft skills of your supervisors and managers. That's not to say that all voluntary turnover is bad - some folks resign when they start being held accountable. But if your voluntary turnover rate is stubbornly high, it's likely linked to your management culture.

-Involuntary Turnover occurs when your company quits on an employee. If this number is high it means people are failing at your company at a high rate. Perhaps your organization needs a better training or on-boarding program? It can also mean that your performance standards (expectations) could be too high. Or, it can mean that your selection processes are ineffective and you're hiring people who aren't a good fit for the roles. 

The important thing is to track your turnover by voluntary/involuntary at least. Then dissect it further if need be. And don't just blame the exes. Take a look at what the causes could be and try to build a culture where most turnover is good turnover.