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When and why employee turnover is good

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We write all the time about the importance of improving employee retention. It saves on the substantial cost of recruitment, induction and time to productivity. But no turnover leads to stale thinking and business decline in the long term. So how much is ideal and why?

The value of retention goes beyond cost savings. There is also positive value in the knowledge that is retained and shared by long-standing employees, the engagement and boost to morale that comes from high retention rates, and the benefits of continued stability in the team.

But there is also value in at least some level of staff turnover. First up there are the obvious cases where a mistake has been made in the hiring process and the fit to role or culture just isn’t there.

But what if the fit is there and everyone in a team are performing as hoped?

One study of customer service teams showed those with 100% retention performed worse than teams who retained between 75% and 99% of their staff.[1] This was attributed to the “positive friction” that resulted from acquiring new members, and the avoidance of groupthink.[2]

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