High Employee Turnover- Could it really be Beneficial for a Small Business? * Incedo Group

High Employee Turnover- Could it really be Beneficial for a Small Business?

When an employee resigns for whatever reasons, it is called employee turnover. It is a measure used by the management to evaluate the health of a company’s workforce. Employee turnovers cannot be avoided, but too much of it may affect the business’s production. Generally, a low turnover rate is a sign of a successful small business and of good management.

Employee turnover could be minimized by improving the recruitment process to ensure only applicants that have the right skills and attitude are employed, paying employees competitive salaries, combined with attractive benefit packages and reasonable work schedules.

A successful small business, in order to have low turnover rates, also have effective and engaging management, as well as mutual respect between the employer and the employees.

But….

Low Employee Turnover is NOT always Sign of a Successful Small Business

Low turnover rates may reflect external economic factors, but it’s not always a good indicator of good management.

For example, in a bad economy, can you safely assume that turnover rate is low because of good management? It’s more accurate to assume that the turnover late is low because current employees are afraid to leave for fear of not finding a new job.

It may also reflect that employees are poorly trained, overpaid, and complacent. They are contented with how things are so they’d rather stay in a job they don’t really excel at, than risk not having a job at all.

Because of the static wage increases over the past years, entrepreneurs should evaluate their current workforce. If a thorough company performance review proves that the low turnover doesn’t translate to high employee performance or a boost in company profits, then perhaps it’s time to think of ways to strategically increase turnover rates.

Why in the world would I do that?

Strategically increasing turnover rates, especially when your current employees are starting to become complacent, can boost previously mediocre employee performance. Rock the boat, then let go of employees who show no initiative to improve themselves.

4 Reasons an Increase in Employee Turnover can Help a Small Business

1. No Space for Complacence

Complacency is like a dangerous plague that could easily spread through the workforce, because it tolerates dislike for taking risks and the “it’s okay, not great” attitude.

2. The Thought of Career Movement— one of the most popular building blocks for a successful small business

Bureaucracy is a danger in just about any company. It promotes status quo, which does not really foster innovation. A systematic renewal in the business that would either promote or terminate employees, especially managers, would ensure a work environment of flowing opportunities and motivations.

3. Widen Perspectives

A successful small business is not limited by “group thinking”, especially not the thinking of tenured employees who have been in the company for a while but have no achievements to show for their tenure. New employees bring new perspectives and fresh ideas to the table. Even if they don’t know much about your organization’s processes, they are a good source of inspiration and out-of-the-box thinking that may even solve existing company problems.

4. A Recipe for a Successful Small Business

High turnover rates do not necessarily mean that there’s a problem with the business or the company. A successful small business is one that provides new opportunities and innovation to the market by ensuring that employees are not simply tied to old ways or ideas.