small business adviser | by arlene alvarez

When Turnover Isn't So Bad Business Life Fact: Not All Employees Can or Should be Retained.

In an era of low unemployment rates and tight labor markets, retaining employees has taken on new significance for many organizations. Firms struggling with high rates of employee turnover have focused on the art of "talent management" as executives and managers search for ways to attract, select, integrate, and retain employees.

While organizations must address high employee turnover and its associated costs, the current labor situation shouldn't obscure an important truth: it's neither possible nor desirable to retain all employees. Let's talk about five myths associated with employee turnover.

Myth # 1: All Employee Attrition

Is Preventable Employees leave organizations for numerous reasons - some preventable, some not. Retirement, spouse relocation, pursuit of higher education, or becoming a full-time parent, are all examples of employee turnover that is not preventable. Ineffective managers, employee skills (that don't match job core competencies), and employees who don't embrace the values and culture of the organization are all examples of preventable turnover. Organizational development practices such as coaching, competency development, and recruitment and selection programs that are aligned with the organization's strategic goals help eliminate undesired turnover.

Myth # 2: Preventing All Turnover

Is Desirable Limited turnover is healthy and desirable in any organization for several reasons. If every employee stayed and the organization continued to grow, employees would be at the top of their pay scale and salaries would be extremely high. Next, without some turnover, opportunities are not available for highly-valued employees to be promoted from within, further enhancing their own skills and abilities. Finally, new employees bring fresh experience and ideas that drive creativity, progress, and innovation.

Myth #3: Striving To Retain All Employees

Is Good Business High performers and steady performers are the ones you can least afford to lose. Poor performers directly affect your bottom line by driving away customers, reducing productivity, and creating low morale among co-workers. Some employees, even after receiving the best coaching and mentoring efforts, still do not meet performance expectations. Since all employees are not created equal, the decision to commit valuable resources to retain any employee may not be the most cost-effective course of action.

Myth #4: Organizations Can Not Proactively Manage Turnover

Organizations can manage turnover by creating and implementing talent management practices that offset the negative impact of high turnover. You can forecast staffing needs by tracking your organization's previous and current turnover rate as well as industry trends. Embracing succession planning as a critical component of the strategic plan ensures that the right people with the right core competencies are in place. You can protect your competitive advantage by aligning the organization so that employees receive a consistent message that supports the core values and purpose which are critical for the organization's success.

Myth #5: Great Places To Work Are Great Places to Work For Everyone

Only those who fit extremely well with the core ideology and values of their employer will find the organization a great place to work. If the employee is not aligned with the vision and strategic direction of the company, an inconsistency with the organization's practices, processes, or systems and their own beliefs and values will surface.

The Benefits of Employee Turnover It's not easy to be philosophical about employee turnover when your organization is struggling to fill positions. Turnover is costly. Learning to plan for it through succession planning while incorporating proven measures to reduce avoidable turnover such as coaching, recruiting and selection, and career management programs will significantly help to reduce the negative impact of turnover. With these practices in place, your efforts will be retention focused and turnover will be reduced to a "healthy" amount.

Arlene Alvarez is Vice President, Consulting Services, Right Management Consultants, Heartland Region. Phone is 913.451.1100 or e-Mail: arlene.alvarez@right.com.