The High Cost of Low Turnover


Note – in this column, I have also prepared some audio notes to expand on some of the ideas that would not fit within the limits of text. Click here to listen in.

In most Jamaican companies, there’s an unquestioned assumption that long staff tenure is an indicator of strong company loyalty. Maybe it’s not. I suggest that as the economy grows it may reveal a deeper truth: these benefits occur with a high price tag.

As you sit at your company’s long service awards function, are you right to wonder if you will ever earn such recognition? Is it disloyal to reconsider the idea of sticking around the same company for decades? After all, your parents advised you to find a good job in a decent organization and cling to it for as long as possible. This was their metric of success.

Were they right? Or could company loyalty and its alter-ego, low turnover, actually be signs that something is wrong? Here are three underlying causes which confound the popular assumption.

  1. A Tight Job Market

The general perception has always been that a steady job is a ticket to a car, mortgage, family and stability. Without it, these accomplishments are said to be impossible.

However, the Help Wanted section of the Gleaner’s Classifieds has been anemic for decades. This sad fact has led employees to develop the skills of a barnacle – they have learned how to cling to their current employment for dear life. Their practices? Building alliances among colleagues while playing internal political games so that they can move around the company, finding one safe haven after another.

For most, this represents a standard operating procedure. When the odd individual acts differently, striking out for a better opportunity in the form of a different job or (God forbid) some kind of risky startup, they are seen as crazy. Once gone, they are forgotten – dismissed as aberrations. Managers simply search for new barnacles to replace the few who exit.

However, this may be about to change. As the economy improves, workers may begin to act on the fresh opportunities it affords.

I once stood in line at Trinidad’s Piarco Airport and watched as a customer service agent, announcing that “I can’t take any more of this,” simply picked up her handbag and walked off the job. At that point, Trinidad was at full employment. Her behavior was typical of a new attitude: anyone could leave a position, rely on the social safety net to handle their basic needs, and re-enter the workforce later.

Local companies should expect the same practice to emerge. It will reveal “loyalty” as a reflection of lack of opportunity, not true affinity.

  1. What Lef’ Mediocrity

But there’s a deeper problem. Today, a firm which is able to attract a Millenial hotshot can fool itself into thinking that a job offer is enough. Managers unconsciously believe that, once hired, she’ll behave just like her barnacled colleagues. In other words, she will cling around “waiting for her time to come”.

In reality, it eventually dawns on her that those who lead the organization, and seal her fate, are clueless. They have failed to keep abreast of developments in technology, their industry, and profession. As a result, they make a series of poor decisions which no-one in their immediate bubble is brave enough to challenge.

That is, until the young talent shows up and, like an Old Testament prophet, starts calling a spade, a spade…to no avail. As she’s ignored and excluded, she becomes frustrated and eventually quits. But it’s not her departure that’s the most dangerous act. After all, a replacement can be found.

Instead, look at what she leaves behind: an organization which systematically repels people like her, while simultaneously encouraging the barnacles to remain. It’s a recipe for perpetual mediocrity.

Survey your company to see if the talents who leave are the ones who challenge the status quo the most. If so, are they leaving behind a stale core of mediocre performers? Under these circumstances, rewarding the “What Lef’” for their “loyalty” is a terrible mistake.

  1. No External Value

Finally, if the new, growing economy doesn’t put your company under fresh pressure to retain employees, consider that it’s not because they are loyal. They just might not be valuable.

Most companies have too many insular people. They don’t keep their Linkedin profiles up to date…if they even have one. They have never crafted a resume. Their only email address was given by the company.

They may be the only ones who can run the firm’s obsolete XYZ machine in the entire world, but these skills are of no external value. Once again, this isn’t true loyalty.

Instead of being lulled into false accomplishments, push your people hard to become the best, while allowing them to pursue whatever career path makes sense. Putting performance over loyalty may probably increase turnover, but it’s a strategy which will pay off in better results.

P.S. Here’s that link to the audio once again.