We've Been Thinking About Turnover In The Wrong Way

The latest Gallup report of employee engagement shows a three-year high, a 1.5 full percentage point up from this time last year. You can read the news here. It's a small move in a more engaging workforce, which is positive for employers.

We can all agree that a more engaged workforce is a more productive workforce. While engagement numbers are moving in the right direction, it still leaves about 70% of the workforce disengaged with their companies. Also, turnover is at record highs and most companies are challenged with these human capital problems. But, what if turnover was not a problem. What if turnover was looked at as a good thing - a strategic lever? What if we have been measuring turnover all these years and having the wrong reaction? What if having folks rotate in and out of your organization actual led to positive business results?

I know what you're thinking "oh boy, here is one of those 'what if' posts", but maybe we've been thinking about turnover in the wrong way all this time. It could be that in our new world where jobs are less repetitive and require more creative juice, that turnover could be a good thing. Having a new set of eyes and hearts on a regular basis, could allow for more divergent thought. Let's dissect the thought process here and in good spirit create a discussion and debate.

We can all agree that low engagement is bad. There is no question that low engagement equals low productivity, creativity, and performance. The major challenge is that all of these issues increase as engagement decreases, causing a huge gap in company productivity and potentially poor customer/client services leading to lost sales and revenue. It also seems to embed itself into other parts of the organization and spreads quickly. Low engagement has a way to penetrate even the strongest culture, compensation philosophies, and great leadership foundations. Some believe that once you lose engagement it's very hard to get back, though not impossible. In most cases, you will never see full engagement again and even with the best people programs, it's hard to maintain engagement or even improve it once it's lost.

Given all these challenges, with the negative impact on clients, the division, and your company, why wouldn't we want to provide alternate opportunities to the folks that have lost their engagement? Wouldn't it be better for the company and individual to seek other employment? In this case, turnover would be considered good, right? The individual seeks another employer, the company has to replace the person, theoretically both parties win.

I know most of you are probably saying to yourself, "okay, but..." at this point. The "ok, but..." is likely about the cost to recruit, hire and train the new staff member. I agree, it's painful, but I will argue that it's not as costly as you think. I've heard costs upwards of 100K, which I think is insane. Let's say the actual cost of a hire is around $5-10K. Add the cost of disengagement and low productivity prior to the person leaving, with the potential loss of sales or poor customer/client service and now we are getting into bigger numbers.

There is also the benefit of a new team member bringing his/her "new perspective", which most companies don't account for when hiring a new person. In many cases, new employees bring with them different experiences which could provide a new and refreshing perspective on your organization. While you do lose lots of legacy knowledge when an employee leaves, the fresh view of a new employee can bring in innovation, new ideas, and a different way to look at some of those sacred cows you've been hoarding. The millennial generation likes new challenges and opportunities on a more frequent basis, so I think we will see more of a "free agent" type of workforce than generations past.

It is hard to measure any of this and difficult for anyone to pinpoint the exact moment or event that causes disengagement. If we could find a way to find out exactly when engagement is losing ground and admit that we are not leadership superheroes that can turn the situation around, we could actually encourage the turnover. I am not talking about GEs philosophy of 20/60/20, where the bottom 20% are pushed out. I am talking about ways to identify when engagement is lost or irreversible and taking action instead of ignoring. I don't mean push people out, but I mean having real 1:1 conversations with those team members who are disengaged. Even with your top talent. If we could "encourage" turnover and use it as a strategic lever, it would be considered a positive for a company instead of a negative.

What do you think? Can turnover ever become a strategic lever for organizations?