Not All Employee Turnover is “Bad Turnover”

As the needs of your business change, so too should the composition of your team.

Photo by Tima Miroshnichenko from Pexels

We’ve all heard the adage, “people don’t leave jobs or companies; they leave bosses.” And, up until the past year or two, I’ve generally subscribed to this argument. According to Gallup, the manager alone accounts for 70% of the variance in employee engagement globally.

As such, who you work for will likely have a far more significant impact on your experience working for that company — and whether you choose to stay or go — than any other factor will.

But, as businesses of all sizes across the US grapple with the Great Resignation, the Great Discontent, or the Great ‘whatever we’re calling it today,’ this adage might be putting more pressure on today’s team leaders than is deserved.

So, especially now, it’s worth reminding leaders that not all turnover is “bad turnover.”

The CEO of a startup I recently spoke with shared with me that she hopes everyone employed by the company today will remain with the company until “the end,” which, in startup speak, means either an IPO or some other exit.

As an HR Consultant to startups like hers, I had to break the news that if everyone employed by the company today is still employed by the time they make a potential exit, something has gone very wrong.

The reality is that every business needs a healthy degree of turnover. Exactly what level of churn is “healthy” for your business is highly dependent on the industry you work in. For example, restaurants generally experience far more turnover than professional services firms.

If you’ve ever been involved in hiring, you know that evaluating and selecting talent is not an exact science. All hiring managers make a few “bad hires” along the way, myself included.

Some might not be as skilled as they seemed during the interview process, while others might simply outgrow the company or its culture over time.

Teams are meant to be dynamic, not static. And this is especially true at startups where it’s incumbent upon the team to iterate and evolve as they work to find product-market fit.