Low Turnover could be a sign of mediocrity. High Turnover could be a sign of growth.

When you hear that a company has a high turnover rate, that fact is usually reported in a negative tone of voice. The words “high turnover rate” are associated with poor working conditions, bad bosses, unfair pay, and miserable hours.

But what if we looked at a high turnover rate as a positive thing, a sign that a company is a highly competitive place to work?

A high turnover rate can actually be a very good thing for your business to maintain. Read on to discover some of the benefits of high turnover and why your company should keep things fresh.

What Is High Turnover?

The short answer is it depends. Before we dive into the benefits a high turnover rate can bring your business, let’s talk some about what a high turnover rate is. Your turnover rate is the regularity with which employees are leaving your company and you’re hiring new employees. An employee may choose to leave the company on their own, or you may choose to terminate them.

What qualifies as a “high” turnover rate depends on which industry you’re in. Overall, the average employee turnover rate is 3.5% percent, but industries like food service and entertainment have a higher average turnover rate. Take Amazon Warehouses they have 150% turnover rate. If your turnover rate is higher than your industry’s particular average, it will fall into the “high” category.

Improve Your Talent Potential

One of the biggest benefits a high turnover rate can bring is an improvement in your talent potential. Every day, new, talented employees are making their way into the workforce. More people graduate college now than at any other point in history, and this new generation of workers benefits from training in the latest developments in their fields.

Yes, some of your workforce has skills and expertise that can only be learned through years on the job. But when you keep your turnover rate high, you create an opportunity to blend that expertise with the promise of new developments. You increase your chances of finding more talented workers and keeping your company on the rise.

Incentivize Productivity

How many jobs have you had where you weren’t honestly giving your full effort at the job? The truth is that most employees do just enough work to get by, do well on our annual reviews, and keep collecting a paycheck. And unfortunately, that same idea holds true for your workforce too.

Keeping your turnover rate high gives your employees a reason to do their best work, not just the minimum required. It gives you the employer the ability to “draw another card from the deck”, so you can potentially hire another Rockstar to your team. Where this gets tough is finding the balance between clearing desks and stalling growth. We feel that you need to have a framework in place based on expectations to make this fair for both the employee and the employer. 

Find Problems in Your Workflow

If you are running your first business or are new to a role,figuring out the best way to run a business is very much a matter of trial and error, and sometimes, it can be hard to tell what’s really working well for your company. When you work in these systems day to day, how do you make sure that you’re really getting the results you want? Aside from setting SMART goals for yourself and your employees, keeping your turnover rate high can be a great way to sniff out problem areas.

Partnering with a company that offers “Sales Operations in a box” or Sales Operation Consulting, or a framework that you can lean on to understand how the employees performance relates to the Smart Goals/KPIs and how this correlates to the person is key to success. 

In our view, you need to see both the quantitative and qualitative sides of the person. 

It should be noted to keep an eye on which areas have outlying metrics around turnover, tracking this by location and department can uncover a larger underlying issue there. You may need to examine your practices in that department and make some adjustments before you start hiring again.

Broaden Your Perspective

Encouraging diversity in your organization is about more than just good PR and meeting specific quotas. When you have a diverse group of employees, you bring in new and different perspectives that you couldn’t get from a group of people who all have the same life experience. This can help you better brainstorm and problem solve, as well as promote a culture of empathy.

You need to hire people who are all different ages, races, genders, sexual orientations, and career paths. Keeping your turnover rate high can help you keep diversity in your company strong. Even if you have a limited workforce, you’ll be able to bring in new perspectives and keep your company relevant. 

Low Turnover could be the sign of mediocrity and High Turnover could be a sign of growth

Oftentimes, a high turnover rate is presented as a negative sign for a company, but it doesn’t have to be. In fact, it can indicate that your business is a growing, thriving, changing place. It can show that you value diversity, incentivize hard work, and are committed to doing what’s best, rather than what’s always been done.

If you’d like to learn more about how we help CEO and CRO set up a framework that blends both Sales Operations and Sales People, with unique insights that drives data driven decision making, we would love to chat. 

We can help you conduct a Sales Operation Audit,  and deliver real business results. Request a demo today and start engaging with your team members your way.