In 1982, researchers Katz and Allen, discovered that team performance increased after 1.5 years of average team tenure but after 5 years it started to decline. This landmark study raised a new question for business leaders; can losing staff be healthy for your company?

Staff turnover is often categorised as ‘bad’, but this isn’t always the case. There is a seismic difference between good and bad staff turnover? Regular staff turnover is a huge financial burden on your company. Not only from losing the direct costs associated with recruiting but also the knock-on impact on team morale, opportunity costs and productivity.

In this post, we’ll define good turnover and explain the benefits that are often overlooked.

What is good turnover?

In general, good or healthy turnover is when attrition is beneficial to the organisation. Whilst it’s widely thought that pays to retain employees for as long as humanly possible; sometimes it is more cost-effective to lose people. A valuable new-hire can bring fresh ideas to a team, improve team dynamics and be more beneficial to your organisation in the long-run.

Keeping loyal but underperforming employees is likely to result in stagnant business performance. It is important to look at your organisation as a whole and remember that there is always new talent emerging in every industry – why not take advantage of it?

Why is good turnover important?

It is important to be able to distinguish between good and bad turnover. Knowing what the optimal staff tenure is per role within your business will enable you to recognise the right amount of turnover that your organisation requires to work most effectively.

The turnover rate in your organisation will either positively or negatively effect your employees. You want your turnover rate to send positive incentives towards your employees. You don’t want the turnover rate to be so high that your employees have low morale, but you want it to be high enough to demonstrate that employee performance is being evaluated and that low performing employees will not be retained (within reason).

How good turnover can benefit your company.

How can staff attrition be good?

It can increase diversity in the workplace

Turnover can be viewed as an opportunity to increase staff diversity. Conducting a skills gap analysis of your current workforce and evaluate what you need to bring to the organisation or team. A new job opening provides you with the opportunity to hire smart and add individuals with diverse backgrounds, experiences and heuristics to your current teams.

It can embed your values

Of course it depends on what your company values are, but most companies value positive behaviours like honesty, transparency and respect.

It is therefore important to show respect to people leaving the company. Companies and employees should try to always part ways on good terms. Maintaining a healthy relationship with them will benefit you in more ways than one; they are more likely to speak positively about you and may even return after getting insightful experience elsewhere.

It can tackle negativity head-on

If an employee’s mentality in the workplace seems to have taken a bad turn, it is your duty to check in with them and offer assistance. However, if the problem can’t be solved and the job or culture isn’t for them, you should suggest alternatives – possibly even jobs outside of your organisation.

This may be best for their own well-being and the spirit of your whole team. One negative employee can lower morale and have a negative influence on the team if they are left to do so for a prolonged period of time.

It can bring in new talent

Recruiting new talent with fresh ideas, drive and emerging skills could be incredibly beneficial to your organization. New energy in the team can help everyone to feel motivated and excited about achieving work goals.

How good turnover can benefit your company.

In closing

Don’t be scared of a high turnover rate. It isn’t always bad. Taking the right approach to turnover can help your employees to be successful and productive, and you can find the silver lining every time an employee leaves. The right turnover rate for your organisation may be your secret to success!