A common indicator of success for businesses, and many HR departments, is a low turnover rate. With that standard, understanding high turnover can be accepted is not generally understood.
For many years, our organization prided itself on retaining employees with long tenures. We relied on all the knowledge the employees had and ran our business off their expertise. We worried about how we would operate if they left, taking their knowledge with them. We understood this way of operating was not scalable and had to alter our of approach for onboarding and documentation. This was a shift in our culture and employees feared it, worrying our intention was to replace them. We built trust by clearly communicating our intention, to assist us in healthy growth and improvement as a business, not to replace anyone.
Our organization also improved through other significant changes. Some of the biggest changes were setting a clear vision, the measurement and intentional work in our culture, a continuous improvement mantra in utilizing good to great, and the work and documentation of our processes. What made the biggest difference was how often we communicated all these changes and their impact. We made it clear to all our employees what we plan to achieve and, through our core values, what type of people we need in our organization to accomplish it.
We accepted by being so clear about our vision, core values, and clear expectations, there will be employees that do not want to change along with us. Our worry changed from losing employees and needing to onboard someone new, to allowing low performers to stay and stunt our momentum. We now focus on pushing our leaders to set high expectations and not accept consistently low performance. We do not want high performers feeling stunted by being surrounded by low performance.
In addition to tracking turnover traditionally, we also track the employees we would hire back if we had the chance. We found this number was significantly lower than our overall turnover rate. With this in mind, we can accept a 3-year average turnover rate of 35% and know it is the right thing for our organization. We know this because those previous employees are often not the individuals needed to achieve our goals.
To truly be able to feel confident in this message, you need to not only track your turnover rate but also understand why employees are leaving. If the results are things such as low compensation or a negative culture, then you may have some work to do before you can accept higher turnover.
There is a cost to recruiting and onboarding new employees, but you can accept this as an opportunity cost, if you find your high, clearly defined, expectations are the reason for an employee’s exit. If time and effort are spent communicating the right vision, core values, and expectations, and you have conscious leaders who made employees feel heard, then high turnover is something you can accept might be making your organization better.
If you’d like to explore the topic of conscious leadership, take a look at this article that we previously published on “15 Reasons Ongoing Development and Learning Are Important to Conscious Leadership“.