Jag Venugopal's Blog

May 18, 2009

Is low turnover such a good thing?

Filed under: Management — Jag @ 10:09 pm

When a company has close to zero turnover, is it necessarily a good thing? I’d reckon that a 20% or so turnover is not such a bad idea after all… on average staff will completely turn over every five years. The benefits of low turnover are obvious, but in some quarters, the costs may not be so obvious… some thoughts on the costs of low turnover:

  • The “we’ve always done it this way” syndrome
  • Formation of cliques that resist change
  • Groupthink. A belief in one’s corporate invincibility
  • Lack of new ideas, fresh thinking
  • If no one has left your company or your department in the last five years, is it because (a) you’re running one of the damnedest best departments (not likely) or you’ve attracted people that are not employable anywhere else at the wages you pay them?
  • Wasn’t anyone ever let go for poor performance?
  • If no one ever leaves, how do you promote your brightest performers? What if your organic growth is low?

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