Positive Effects of Turnover

Employee turnover is generally spoken of as a problem for a business. While losing good employees and paying to hire and train replacements are issues, staff turnover does have some benefits. The challenge for human resources specialists and managers is to avoid losing top employees and minimize hiring poor workers.

One of the more obvious advantages of turnover occurs when a problematic or low-performing employee leaves and is replaced by a better one. In some cases, managers recognize low performers and encourage them to resign or terminate them at some point. Other times, managers may not even realize an employee is under-performing until the employee leaves. A replacement may come in and immediately produce more or create better results.

Some level of turnover is generally good for an organization, because it allows for fresh ideas and perspectives to enter the mix. A company with long-tenured employees in key roles may have consistency, but it may lack awareness of new ways of looking at things. Tech companies, for instance, may benefit from turnover that results in more tech-savvy, entrepreneurial-minded workers who look at the marketplace in a different light. This benefit of turnover can help a company stay proactive in its evolution as opposed to reacting to desperate situations.

Turnover of managers or highly influential workers with negative attitudes is beneficial as well. Companies may have high turnover and not realize until exit interviews that one manager contributes to many of the issues. A surly or unpleasant manager can drive good employees away. Additionally, an assertive and involved employee in a department may cause colleagues and co-workers to seek out other employment if he is negative or hard to work with.

Companies sometimes use layoffs of high-salaried workers as a way to cut costs during tough financial times. Some offer early retirement plans to clear high salaries from the payroll and replace them with newer, less-experienced and less-expensive workers. The ideal turnover results when a highly paid, low-performing employee leaves and is replaced by a more productive and less-costly employee.