5. Is It Always Best to Retain Employees?
Most HR programs have a strong focus on keeping employees
for the long term. After all, high employee retention is often considered a
sign of a healthy, successful organization. But is it always best to keep
employees.at any cost?
Retaining high-performing, motivated employees is essential,
but retaining every single employee is not always the best choice. A bit of
turnover can be a good thing for the business
1.
Too Much Retention Can Limit Fresh Thinking
When the same employees hold the same jobs for too long,
they sometimes stagnate and become opposed to change. In industries like
finance or tech, where innovation and adaptability are essential, this can be
especially perilous.
Unless somebody arrives to shake things up, companies lose
out to rivals who are constantly injecting their organizations with fresh blood
and fresh skill sets.
2.
Not Every Employee Should Be Retained
Sometimes organizations focus so intensely on retention that
they end up keeping bad performing or disengaged employees. This has the impact
of reducing team morale and productivity. In short, not everyone is meant to
stay forever. Letting go of the wrong employees can make room for more
competent ones.
In the view of Glebbeek and Bax (2004), some turnover is
healthy—it removes bad fits and allows opportunities for better matches.
3. Retention Can Be Expensive
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Keeping employees is not without cost. Companies spend a lot
on retention programs, such as:
- Bonus and salary increase
- Career development opportunities
- Special privileges and flexibility
These are great for keeping top performers, but when offered
to all employees as a whole, the costs might negate the benefits—especially
when they are offered to low-performing employees or those who have no interest
in growing with the company.
"Retention resources are scarce and their application
to individuals with the highest performance and growth potential is more
valuable than blanket retention spending."
— Hausknecht et al. (2009)
4.
Turnover Can Be a Strategic Opportunity
When someone leaves, it is a chance to redefine the job:
- Can the work be re-engineered?
- Could part of the work be done by technology or automation?
- Is there a better way to structure the team?
In fast-changing industries like banking or fintech,
turnover can actually assist business transformation and modernization.
5. Employees Sometimes Need to Leave
It is not always about what is best for the
company—employees also grow and change. Their goals may no longer be parallel
to the firm's trajectory in the long run.
Retaining workers when they want to go can lead to
frustration, low morale, or "quiet quitting." Instead, it's better to
make exits good, give good references, and maintain good alumni relations.
Cappelli (2000) recommends creating alumni networks—former employees can be
future customers, partners, or even return as more experienced hires.
So,
When Is Turnover a Good Thing?
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Turnover can be positive and valuable when it:
- Provides space for fresh talent and energy
- Removes underperformance or cultural misfit
- Encourages innovation and adaptability
- Enables personal growth and career transitions
The secret is strategic retention: keeping the right people
for the right reasons.
Conclusion
While retaining talented employees is always worthwhile,
mindlessly trying to reduce turnover at all costs can hurt an organization more
than help it. A better option is to focus on:
- Retaining and nurturing high performers, and
- Releasing roles or individuals that are no longer in line with your goals.
In today's fast-moving business environment, flexibility and
intelligent workforce planning are as critical as loyalty and retention.
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Is It Always Best to Retain Employees?
Reference List
Cappelli, P. (2000) A market-driven approach to retaining talent. [online] Harvard Business Review. Available at: https://hbr.org/2000/01/a-market-driven-approach-to-retaining-talent [Accessed 13 April. 2025].
Glebbeek, A.C. and Bax, E.H. (2004) 'Is High Employee Turnover Really Harmful? An Empirical Test Using Company Records', Academy of Management Journal, 47(2), pp. 277–286. Available at: https://doi.org/10.5465/20159578 [Accessed 12 April. 2025].
Hausknecht, J.P., Rodda, J.M. and Howard, M.J. (2009) ‘Targeted employee retention: Performance‐based and job‐related differences in reported reasons for staying’, Human Resource Management, 48(2), pp. 269–288. Available at: https://doi.org/10.1002/hrm.20279 [Accessed 13 April. 2025].
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Interesting point. Can too much employee retention actually hold a company back? If we keep the same people in the same roles for too long, do we risk losing innovation and adaptability? How can organizations strike the right balance between loyalty and fresh thinking?
ReplyDeleteAbsolutely, while retention is often seen as a positive HR metric, too much of it, especially when not linked to performance or innovation, can limit a company's growth. When employees stay in the same roles for too long, it can lead to stagnation, reduced adaptability, and resistance to new ideas. Glebbeek and Bax (2004) argued that a moderate level of turnover is actually healthy, as it helps organizations replace poor fits and bring in fresh talent with new skills and perspectives. This is especially relevant in dynamic sectors like finance and tech, where continuous evolution is critical. The key is strategic retention. Keeping high performers who are engaged and evolving, while also being open to change when someone’s contribution no longer aligns with business goals. It is about creating a culture that values growth, not just tenure.
DeleteI completely agree with the idea that turnover, when managed strategically, can be a positive force for change. It’s about creating room for fresh perspectives, fostering innovation, and addressing performance issues. How can organizations ensure they’re retaining the right talent without falling into the trap of over-retention, which can stifle growth?
ReplyDeleteGreat question! The key to balancing retention and turnover lies in ensuring a clear alignment between individual goals and organizational needs. As Glebbeek & Bax (2004) suggest, a certain level of turnover can actually be beneficial, as it opens up opportunities for stronger talent and new ideas. By focusing on retaining high performers and creating an environment where employees can grow, companies can avoid the stagnation that comes from over-retention. Strategic retention requires understanding both the skills needed now and those required for the future.
DeleteYes, because retaining employees helps maintain stability, reduces hiring costs, and boosts productivity by keeping experienced, knowledgeable staff who understand the company’s goals and culture.
ReplyDeleteAbsolutely agree! Retaining experienced employees not only saves costs but also strengthens team performance and consistency. Still, it is important to ensure they stay engaged and aligned with the company’s evolving goals.
DeleteYes, in most cases. Retaining employees helps preserve institutional knowledge, strengthens team cohesion, and reduces the high costs associated with hiring and training new staff. Long-term employees often have a deeper understanding of company culture, processes, and goals, which leads to higher productivity and stronger performance. When organizations invest in employee growth and engagement, retention becomes a key driver of stability and success.
ReplyDeleteAbsolutely! Retaining employees not only fosters continuity and a deeper alignment with company values, but it also creates an environment where employees feel valued and invested in. This mutual commitment often results in higher job satisfaction, stronger collaboration, and a more resilient organizational culture. When organizations prioritize employee development and engagement, it truly becomes a win-win for both the company and its people who work there.
DeleteNot necessarily. While retaining talent is generally beneficial, it’s not always the best option. Holding on to underperforming or disengaged employees can slow down team progress, reduce morale, and block opportunities for fresh talent with new ideas.
ReplyDeleteThis is a really balanced and insightful take. Retention is often seen as the ultimate goal, but quality matters more than just longevity. Keeping employees who are no longer aligned with the team's goals or who are not contributing effectively can do more harm than good. Sometimes, letting go opens the door for fresh energy, innovation, and a healthier team dynamic. It is all about striking the right balance between loyalty and progress. Great perspective!
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