Should We Accept High Employee Turnover or Battle Against It?

“You’ve got a job here for life.” If you had said this to an employee 30 years ago, chances are they’d have been over the moon. Say the same thing to an employee today, however, and you’d probably get a slightly less enthusiastic answer.

Attitudes to work have changed so much in recent years. People no longer want or expect a job for life. Most would rather roll the dice and take a new opportunity than stay put forever because they increasingly value new experiences and personal growth over security and predictability.

This new culture of job-hopping may suit employees, but it puts businesses in a tricky position. The financial burden of replacing an employee can be huge, costing anything from 50-200% of their yearly salary – and the higher the position, the more it costs. Then there’s the hit to productivity, as the new starter takes time to find their feet, not to mention the damage to team cohesion and morale.

Is retention an unwinnable battle?

Of course, there are ways that businesses can persuade employees to stick around – and it all boils down to meeting their needs. The modern employee wants flexibility and autonomy, continuous professional development, and work that is meaningful and challenging. So, companies that want to reduce turnover must focus on these areas.

But they must also realise that the best engagement strategy in the world may not be enough to keep employees from moving on. As people increasingly seek new challenges, even great jobs can be seen as steppingstones in a grander journey.

The changing nature of work makes it doubly hard to keep people long term. Thanks to the internet and mobile technology, full-time employment isn’t the only option when it comes to making a living. An increasing number of people are looking at alternative modes of work that allow them increased autonomy, freedom, and self-determination.

All of this makes retention an uphill battle for most employers – especially those in areas with above-average turnover, such as IT; or smaller businesses, who many see as a stopgap on their way to a more prestigious employer.

This raises the question: if people no longer want to be tied down, are businesses wasting their time trying to convince them to stay?

Working with turnover, not against it

What if, rather than treating turnover as a problem to eliminate, businesses accepted it as inevitable and tried to work with it instead? This is exactly what one small US tech firm has done.

For years, Paragus did everything they could to keep the staff from leaving. They offered a range of modern perks – everything from draft beer to a dog-friendly office – and created a positive, employee-focussed culture. But despite their efforts, turnover remained high, with 10-15% of their team leaving each year.

Instead of fighting a losing battle, CEO Delcie Bean decided to take a different approach and work with turnover. To limit the impact of people leaving, Paragus changed its business model, assigning four-person teams to a client instead of just one person, meaning work could continue as normal if someone left. On top of this, they began documenting best practice and processes, ensuring that knowledge and expertise stayed within the business when talent left.

On a cultural level, Paragus decided to embrace employees’ decisions to move on, creating a ‘wall of fame’ to celebrate their achievements, and referring to leavers as ‘graduates’ instead of ‘leavers.’ They also became more transparent during the recruitment process, ensuring that new starters knew exactly the type of business they were joining. As a result, acceptance rates for job offers have held steady between 98-99%.

Paragus’ situation will likely resonate with many small-to-medium-sized businesses (SMEs), who cannot compete with larger companies when it comes to salary or career opportunities. If you are an SME in the tech sector and Google or Amazon come knocking, you’ll struggle to hold on to your top talent.

Getting the balance right

Accepting turnover as a given allows businesses to limit its impact on morale and productivity, but does that mean they should stop their efforts at retention? Absolutely not. No matter what their size or stature, every business should do everything they can to keep their people happy, motivated, and engaged in their work.

As always, a degree of balance is called for. Businesses should aim to reduce turnover through an effective engagement strategy, focussing on continuous learning and development, real-time feedback and support, and strong and vibrant workplace culture. These are all good reasons to stay in a job. But they should also be realistic and accept that long tenures are now a rarity.

A generation ago, most people had a job for life. Today, most people have over 10 jobs throughout their career. In the future, we might have 10 ‘jobs’ at the same time. While businesses can do little to change this trend, they can give themselves a competitive advantage by meeting their employees’ individual needs, while ensuring that they are agile enough to adapt when people move on.


Nick Edwards - http://www.praguecopywriter.com/

Nicholas Edwards is a freelance writer and editor based in Prague, the Czech Republic. When he's not helping local businesses master the English language, he loves writing about the future of work for People First. 

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