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High Turnover Rate? Maybe That’s a Good Thing

In most people’s minds, high turnover equals problems with the company. Maybe it’s bad management, poor working conditions or low pay, but whatever the reason, people are in and out of the company on a regular basis. But before you start patting yourself on the back for your low turnover rate, stop and ask yourself the following questions.

What Does Low Turnover Really Mean?

Well, it could mean different things, some positive and some negative, based on the environment within your company.

  • Positive Low Turnover—Good managers, competitive pay rates, supportive working conditions—these are all reasons your employees might be happy where they are and unwilling to make a move. And they’re qualities every business should seek to cultivate. If your employees love working for you, quality talent is more likely to stick around.
  • Negative Low Turnover—However, there are some negative reasons employees might be hesitant to leave your company as well. These include:
    • Undesirable Skill Sets—No one is recruiting your employees because they don’t have skills that are desirable in the current job market.
    • Punitive Measures for Job Seekers—Your company may take negative measures when an employee seeks an outside position, leading workers to sit tight for fear of losing their jobs if the new position falls through.
    • Low Visibility—Employees who work in less visible fields or who never get outside the company for workshops, conferences, or training seminars, might not be identified by recruiters.
    • Poor Company Image—If your company has a weak brand image or you work in a field with a poor image (such as retail or fast food), your employees may not be able to find work easily based on their current experience and skill sets.

Are There Times When High Turnover is a Good Thing?

Yes. High turnover can be a positive thing if the reason for it is that your employees are highly sought after for their skills, productivity, work ethic, and experience. Many recruiters routinely target only those workers in the top five companies within their industry, meaning that if your best and brightest are always getting calls from recruiting agents, you are doing something right.

How Do You Know Whether Your Turnover Rate is Satisfactory?

Both exceptionally high and exceptionally low turnover rates may indicate problems with company practices. The bottom line is that it’s not so much about achieving a certain number as it is about evaluating the atmosphere within your company, determining whether your employees demonstrate the skills and experience needed to do the job well, and assessing company practices regarding employee training, management, reward programs, and growth potential.New call-to-action