Although a mass exodus of employees is seldom good for business, not all employee turnover is bad for business, either. When an employee leaves, whether voluntarily or involuntarily, it could benefit your small business. Despite the costs of recruitment and retraining, and the decreased productivity associated with introducing new members to your team, turnover can actually boost productivity and growth.
1. Employee Turnover Brings New Talent
Small businesses tend to grow quickly and must be ready to expand, pivot, reposition or relaunch if the market demands it. This often means that people who were perfect for their roles during a previous iteration of the business are less so a year or two later. In addition, technology changes rapidly, and complacent employees may not keep up with these changes. Replacing a key team member could bring an infusion of new talent that boost your growth and productivity.
2. Employee Turnover Changes Your Outlook
It’s easier than most entrepreneurs realise to become stuck in a rut, ignoring market threats and opportunities due to a set perspective in the business. New employees bring new perspectives: the right person can shake things up and help you rid the business of thinking and processes that are holding you back.
3. Employee Turnover Keeps the Business Competitive
Although internal promotion has certain benefits, it could lead to a situation where top managers are competent rather than excellent. This, of course, dulls your competitive edge, and affects growth and productivity. Hiring someone with fantastic qualifications and experience could be exactly what you need to ensure your business remains competitive.
4. Employee Turnover Offers Fantastic Networking Opportunities
If an employee leaves on good terms, the person becomes an advocate for your company. Encourage people to stay in touch, especially when they accept positions in the same industry or similar industries. You may find yourself collaborating on projects in future or receiving referrals from ex-employees.
5. Employee Turnover Can Motivate Your Staff
Firing an employee for poor performance, misconduct or inappropriate behaviour shows your employees that you refuse to tolerate certain behaviours and that the disciplinary processes in place work. It reminds them that no one is indispensable, creating a little uncertainty in the process. Problem employees who don’t want to change their behaviour may even begin looking for new jobs and leave of their own accord. Those who remain will probably put in more effort to ensure they improve their performance.
6. Employee Turnover Improves Morale
Toxic employees not only perform poorly, but also drain the spirit out of those around them. When people who constantly complain, belittle others or gossip about co-workers, or simply underperform leave, the workplace becomes more pleasant, team spirit improves, and managers spend less time managing employees who cannot work on their own. Removing problem employees makes for a happy, focused, productive workplace.
7. Employee Turnover Saves Money
Employee turnover costs money in the short term due to the costs of recruitment, training and lost productivity. However, it could lead to long-term savings, especially when replacing a member of staff who has been with the company for many years. You can offer an inexperienced but competent employee a lower starting salary, and a new start typically receives fewer benefits than a long-time employee does.
8. New Employees Are Enthusiastic and Less Resistant to Change
New employees typically are excited about their new jobs and want to work hard to advance or simply to make a good impression on their managers. In addition, they tend to be less resistant to change because they don’t have the ‘but we’ve always done it this way’ mindset.
If you want to learn more about HR and making the most of your employee relationships, contact Business Owner Coaching to speak to one of our experienced coaches.