Top 3 Pros and Cons of Employee Turnover


When we hear the term “staff turnover,” we immediately think it’s a bad sign that a business is not doing well, or they don’t follow the best hiring processes. As a business advisor to small businesses for over 30 years, I can assure you that staff turnover can also be a good thing for your business.




Pros To Staff Turnover:

  • Fresh Ideas: When you hire new employees, they can bring fresh perspectives, new experiences and energy that could lead to innovative ideas. When they are not attached to the old ideas nor to the “way we do things” attitude, they can bring you insights you didn’t have before.
  • The 20% Rule: You know the saying: “20% of your staff do 80% of the work”. When you reward the 20% for their efforts, this can energize your workforce and strengthen your role as the leader and the balance of staff will either improve their performance or move on.
  • Avoid Complacency: When staff feel what they did yesterday is “good enough,” they have become complacent and this can be the enemy of every organization, fostering an environment of “status quo” and an aversion to risk-taking only leads to poor employee morale and increased employee sick time and poor job satisfaction.

Cons For Staff Turnover

  • Dismissal: It is never a pleasant thing having to dismiss an employee, but once you have determined employees are no longer fulfilling the role you hired them for, and you have given them ample opportunity to improve, it is time to save your business and let them go.
  • Rehiring: Hiring new staff ultimately costs money and time. To ensure you hire the right people from the start with the right skills who fit into the company’s culture, make sure you have a clear hiring process, with written job descriptions and defined roles and responsibilities. You should have an onboarding process and internal measurement and evaluation matrix to ensure they are performing the role you hired them for.
  • Train and Communicate: Invest time in training and communicating your expectations of them in their new role. Sometimes smaller businesses have a tendency to hire a person to perform a specific role, but then start loading them with responsibilities and tasks that are outside of that role. For example, asking the new sales person to design your brochures or write content is not realistic.

Your new hire will not know everything about the job in the first week, so do not set them up to fail – rather, give them clear examples of what you expect from them in a measurable and manageable document. Bearing that, if an employee has been with you for many years and is still not able to meet your expectations, then the right thing to do for both you and the company is to let them go.

Regardless of your hiring process, every business needs to have staff turnover as roles change and your business evolves. Don’t see it as a bad thing, or a good thing, but rather a “chance to grow.”

Do you think employee turnover can help or hinder your business?

3 Steps to Setting Your Business Expectations in 2016

expectationsAs a business owner, you may have already set your business expectations in December. If you haven’t, January is a great time to set your expectations, plan how to achieve them, and begin execution.

Like setting a personal New Year’s resolution, we need to be realistic about setting our business expectations. Set them high, but not so high that they are impractical or unreachable but just high enough so your team has to stretch a little to get there. Stretching is good; as long as it is handled with strong leadership and a well thought-out plan.

Setting expectations is one of the basic fundamentals of management; yet, many business owners and CEOs fail to do this very important step effectively. Setting expectations requires planning and communicating your plan to your team.

Be Realistic

To create realistic expectations, you’ll need to rely on your previous performance. For example, if you usually have 10% growth, then setting an expectation of 40% growth may not be realistic. Set an expectation that exceeds what you know you can achieve, but also encourages you to stretch to achieve it. If you are starting a new business or going into a new market / selling a new product, then you do not have previous performance results to rely on, but you can do some research to understand how these markets and products usually perform and set an obtainable goal that is not discouraging but high enough to help you get established.

Create a Plan

Once you know what you want to achieve, the next step is to create a plan to achieve this. Break your expectation down into smaller, more manageable parts that have actionable items.

For example, if your goal is to grow your business by 25%, you’ll need to ask yourself:

  1. Where will I get these new revenues from – existing customers or new customers?
  2. If it is from existing customers, which ones? How will you get the new business from them e.g. a marketing campaign targeting a new service/product?
  3. If it is new customers, how are you going to find them and market to them?
  4. What staff resources do I need to achieve this?
  5. How can you increase customer knowledge of your new service/product e.g. online advertising, brochures, your website?

Track Your Progress

Whether through Salesforce or other CRM platforms, you’ll need to keep track and monitor your progress towards meeting your expectations. For example, if you are planning on meeting your expectation by obtaining new clients, then you need to see how many new leads are being generated per week/month and how many result in a sale or new client. If there is no progress by the end of the first quarter, then you might want to look at your resources and your methods.

In my 20+ years of providing business advice to hundreds of business owners, I have learned that achieving the “impossible” is usually actually possible with hard work, dedication, and creativity, and setting ourselves up for success involves first creating realistic expectations. Every time I see a business do this, they’ve actually surpassed what once seemed impossible!