One of the most misinterpreted and distorted human resource metrics is the rate of employee turnover. There is a common misconception that if people are leaving an organization the business must be doing something wrong, people are unhappy and they need to make changes…In some cases, yes, this may be true. However, there are many instances when the organization is doing all the right things and this in turn encourages a toxic, lazy or under-performing person to leave the company. This scenario is known as functional or desirable turnover, and it can actually have many positive impacts:
- Stress and workload may be relived from fellow employees that were picking up the slack of the indolent employee.
- Confidence and trust in leadership many increase as employees see that the organization is no longer holding onto poor performers.
- The pool of talent in the organization may improve as new hires bring in fresh skills, perspectives and energy.
- People may be reinvigorated as new incentives are created with the opportunity for promotion.
- Employee morale and performance may boost as the stagnant or poisonous energy of the departing individual is relieved.
If you experience employee turnover, take a moment to look at reasons why the individual left the company and their contribution prior to departing. By dividing the turnover rate between undesirable and desirable you can make a more accurate assessment of the state of your business and what changes, if any, you need to make to your operations.