Understanding High and Low Employee Turnover Rates

Mar 3, 2019 7:21:10 AM / by Involvesoft Marketing


It is generally understood in business management that lower employee turnover rates yield more profit. There are situations, however, when a business may have an intentional high employee turnover rate.  

Low turnover rates fall in the category of good business practices. It is a reassurance that the employees hired value the company they are working for. And if KPIs are being met, the company knows they have a valuable employee and do not need to spend money on replacing and training a replacement.

High turnover rates could mean one of two things. Either the turnovers in your company are voluntary or involuntary. A voluntary turnover is when an employee chooses to leave a company. An involuntary turnover is when an employee is let go. When turnover rates are high, employees are constantly being trained and let go. This is usually a situation business wants to avoid as it is extremely costly to recruit and train employees.

Intentional High Turnover Rates

Cycling through employees, how could that be any good?

There are 3 main reasons for intentional high turnover rates. These include:

• Staying competitive

• Avoiding complacency

• Improving talent

Staying Competitive

innovation-through-low-employee-turnover-ratesStaying competitive is crucial in a world of constant change and innovation. According to Rupert Murdoch, “The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow."

In some cases, companies that remain competitive need to constantly change and adapt to new environments. Change can be tough, especially for those who have been established in their workplace to do the same daily tasks for a long time. Without an open mind, it’s hard to adapt to new environments. In some situations it is easier for businesses to start with new employees than to try and alter the fixed mindset of existing employees.


Avoiding Complacency

Avoiding complacency comes into play when trying to increase profits. Often when employees become too complacent, they stop experimenting with new things. They stop innovating. The moment you stop challenging yourself is the moment you begin to lose your momentum. Many companies that engage in intentionally high turnover rates do this because they want a forever-altering environment.

Improving Talent

The rate at which technology is evolving is why some businesses are constantly looking for the next best thing. Having the “best of the best” talent coming up with cutting-edge products and services may be what keeps a company afloat.   


Why Low Employee Turnover Rates Give You The Most Value

So while competition, complacency, and talent may drive businesses to intentionally have a high turnover rate, this practice is more of a temporary measure. Generally it makes more sense to maintain a lower turnover rate.


employee_engagementIn fact, complacency and talent are two aspects that can even be addressed in-house, without the need to hire new people. Complacency can be addressed with employee engagement programs. Better talent can be nurtured with company sponsored training of current employees, a tactic that can also help improve employee retention.  

Maintaining low employee turnover rates can be a challenge for HR and management, however there are a lot of tips on how this can be achieved. Focusing on employee engagement is a common tip offered by business consultants. Companies that maintain low turnover rates succeed in keeping loyal experienced staff and can improve their overall reputation as a positive working environment - the latter of which is a key perk in the current environment of job seekers using websites like glassdoor.com to judge a company before even accepting an interview.


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Topics: Employee Engagement, Reducing Employee Turnover, Employee Retention