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Why low turnover at a company isn’t always good

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  • Managers strive for a low turnover rate, but this is why thinking about turnover type is more critical.

Source | www.fastcompany.com | STEPHANIE VOZZA

It often takes three weeks or more to hire a new employee. That’s three weeks of lost productivity, revenue, and innovation. Plus there’s the time other employees have to spend training the new hire. Managers and hiring professionals strive for low turnover to alleviate these potential losses, but low turnover isn’t always a positive for organizations, says David Shanklin, managing director of culture solutions at the culture management company CultureIQ.

“In many organizations with long-tenured employees, the status quo of ‘good enough’ can become the comfortable enemy of ‘getting better,’” he says. “Your employee value proposition risks being downgraded to a steady paycheck that doesn’t require too much effort.”

This can result in employees who are physically there but mentally disengaged. That means turnover type, not turnover rate, is actually a better indicator.

WHEN TURNOVER IS BAD

If your high-performing or high-potential employees are leaving, that should trigger alarm bells for any manager. Turnover is often due to internal culture.

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