Focus your metrics on impact, not employee turnover
The jobs market is increasingly fluid so why are we in HR fixated on measuring turnover? Let's create a new KPI – one focused on ensuring we have the mechanisms in place to enable people to thrive in their roles and deliver the right output, regardless of how long they are there
I don’t know about you; however, I’m getting a little bored of employee turnover being the be all and end all of HR. Somehow, somewhere, someone decided it should be the holy grail of HR. That turnover is bad for business. That turnover should be tracked. And that we, as people professionals, should spend a disproportionate amount of our time ensuring we measure, review and measure again, labour turnover rates.
And it’s spreading out beyond our walls now. Awards seem to be judged by it. Recruiters use it as a selling point to candidates. It’s held up like some sort of Olympic medal – a badge of honour. We’re in the 10% LTO club, where are you?
Don’t get me wrong, high turnover is bad for business. But only when it’s having a detrimental impact upon your business. If it’s affecting finances, employee motivation, customer satisfaction and business stability; then yes, of course, we must work with our managers and leaders to do something about it.
But if it’s not having a detrimental impact, then what’s the problem?
It’s taken me many iterations of HR to get to that point. If turnover is not having a detrimental impact on the business, then why make it the focus point. Because, actually, it’s probably having a positive impact on the organisation in terms of growth, development, innovation and idea generation. So instead of focusing on something that isn’t really an issue, we should put our energies into accepting our businesses are made up in this way and spend time on one of the many other challenges we’re facing...
In the tech space, high labour turnover is the norm. Yet those businesses are still wildly successful. They know that the demographic of employees they attract are unlikely to stay for the long term. And so, they do all that they can to ensure that while those people are with them, they are firing on all cylinders. Delivering high performance which has a significant impact on the future of the organisation.
And this is where I think the rest of us need to catch up. We need to shift from focusing on turnover vs tenure. Instead, I would argue, it’s more important to look at their contribution to the role, to the culture, to the business’s success during their time with the organisation than purely how long they’ve been there.
Because, as the economy picks up, and more and more ‘hot’ industries come to the fore; the jobs market is going to become exceedingly fluid. We’re seeing it already with younger generations – willing to move for more interesting projects, more opportunities for growth, the ability to be heard. This will become the norm– if there are more options and it’s easy to move, then why wouldn’t you?
If we want to stay with the times and reflect the modern working environment, then we need to start focusing on impact over tenure. It may sound like I want to completely discount tenure. I don’t. I think it’s a great indicator that a business looks after their people and demonstrates strong employee loyalty. However, if we want to truly disrupt HR, tenure can’t be the sole criteria we measure turnover against.
Instead, we should measure the outputs of those who are leaving and calculate the impact they’ve had on the business during their time with us. And use this insight to create a new KPI – one which is solely focused on ensuring that we have the mechanisms in place to enable people to thrive in their roles, and deliver the right output, regardless of how long they are there. I’m sure I’m not alone in saying, I’d much rather have someone firing on all cylinders for six to 12 months and having a positive impact upon our culture and success, than someone who has been churning the hamster wheel for many more years and has lost the passion and drive to move our business forward.
It’s more important to look at contribution to the role, to the culture, to the business’s success during their time with the organisation than purely how long someone's been there