One of the many metrics management and HR teams like to measure is staff turnover. The percentage of the workforce that has left the organisation during a certain period, and had to be replaced. Received wisdom says that turnover rates in excess of 25% should cause concern. That may be true for large businesses in traditional sectors, but I think it’s becoming increasingly irrelevant for the organisations that are driving our future economies.
Many of the businesses I work with have staff turnover rates in excess of 35%, and some higher. The reason for this is that they are growing exponentially and that growth demands new talent and energy. A good analogy is what happens in the mouth of a child as she grows. First she has no teeth, then she has baby teeth. Later the baby teeth are pushed out by stronger, larger, sharper adult teeth. Later still, she may require an intervention to remove her anachronistic wisdom teeth.
I also take issue with the idea that staff turnover necessarily requires replacement. Above ancillary staff grades, every leaver creates an opportunity to do things differently and better. But that requires imagination from the leadership, and a deep understanding of the concept of talent from Human Resource professionals.
A few months ago I listened to a very experienced and successful entrepreneur talking about the humans dimension of business. You won’t be surprised to hear that he hires for attitude over skills and qualifications. Not for him the pigeonhole approach to recruitment: “We need an IT Manager with at least 3 years experience and qualifications X, Y and Z”.
Instead he would be more likely to define the talent brief thus: “Our IT problem is not about technology, it’s about communication. We need an IT person who will engage our staff to explain the value of digital transformation and to seek their input as future users. In short, we need an IT evangelist.”
Then he showed us a simple grid that he uses to manage his approach to talent. Draw a square and divide it into four quadrants. Label as follows:
- Top left – Guide
- Top right – Delegate
- Bottom left – Direct
- Bottom right – Excite
The vertical axis is labelled Will and represents positive attitude. The horizontal is labelled Skill. This enables you to place the name of any employee into a specific quadrant – based on your perceptions of their contribution.
High Will but low Skill indicates that it’s worth investing time to guide and upskill that person.
High Will and Skill means you have found a gem, and you should delegate more responsibility to develop them.
High Skill but low Will suggest you have a valuable person who could be inspired by better leadership.
But someone with low Will and low Skill goes into the ‘Direct’ box. Usually the the best direction you can give them is to leave the company.
Staff turnover is constructive when it’s deliberate.
Chris Harrison leads The Brand Inside