Staff turnover doesn’t matter half as much as who is leaving.

You are worrying too much about staff turnover.

People teams use staff turnover numbers as a leading indicator of employee experience and operational effectiveness. Measuring “churn” allows a business to see how effective hiring, training, management, leadership, and retention are. Better businesses keep people longer, so measuring turnover provides a sense of how well a company serves its staff.

It's undoubtedly a number which should be measured, and some of the data derived from its measurement is useful in a broader context. Still, I'm not confident that the churn or turnover number is valuable in assessing business performance. Employee turnover percentage doesn’t provide enough context and does nothing to predict success. The central problem with reliance on the total turnover figure is the lack of insight into who it is that the business is losing.

The Pareto principle tells us that eighty percent of results come from twenty percent of effort. Teams and companies all work this way; just a few outstanding individuals carry the heavy lifting involved in excellence. Your own company is no different. Your high performers carry significantly more weight and deliver outsized results.

A single high performer leaving the business might have an impact on overall performance that another ten leavers - none of whom make the high performers list - might not. And yet, traditional turnover stats won’t recognise this problem.

It is easy to measure turnover; measuring its impact requires much deeper insight and processes designed to evaluate honestly where talent sits in your business. The bad news is that this work takes time. The good news is that it delivers value to the organisation far beyond just turnover impact.

Identifying the actual high performers in any team is a vital exercise I regularly work on with clients. If you’ve done this kind of work yourself and identified these individuals in your business, you will know just how difficult certain people can be to replace. It's not simply the skills profile but the combination of aptitude, attitude, intelligence, integrity and intensity that these people bring to the company. 

Let's say you employ 60 staff. If you were to rank them from 1 to 60 and score those ranks on impact, you'd likely find a Gaussian distribution of talent. No more than 10 of your people are exceptional, and a similar number bring very low value to the business. 

Any of the bottom ten people leaving will not affect the business. Much, but not all, of the middle tier could leave without significant impact beyond the time it would take to design and execute hiring for a suitable replacement. However, the top 6-10 people are far more than their job descriptions. This group carries your culture and delivers outsized returns on their salaries. Losing these people is a significant event in the life of the business. It's not simply the skills profile but the combination of aptitude, attitude, intelligence, integrity and intensity that these people bring to the company.

I will write more elsewhere about finding these people within your organisation, but for now, I want the takeaway to be that raw turnover numbers don’t show you the business's health. In the example above, you could likely lose 50% of your staff and not have significant ramifications. Most of your average people aren’t leaving anyway, and the people at the bottom should be moved on.  Find a way to keep and develop your superstars, and you need not worry too much about organisation-wide turnover. Make sure those vital few are not leaving, at least not until you are ready for them to do so.

Because the truth is your superstars will leave you eventually. They will leave because they are superstars. They move on from every business, even the exceptional businesses. Superstars are super because of how much they are drawn to challenge and growth and the opportunity to be outside of their comfort zone (it's easy to step outside of one's comfort zone if every previous attempt at doing so has succeeded). They will join the business, make an impact and move on.

What separates exceptional businesses from the rest is their ability to do three key things:

• Predict when these people will likely leave so that interventions or contingency plans can be implemented.

• By acting on the above, keep these people longer than the industry average role duration. Getting an extra 6 months from one of these Superstars is a competitive force accelerator for the business.

• Capture what makes the exceptional people exceptional in this environment. Then turn that insight into lessons to help others grow.

Spend your time finding the impact players in your business. Ensure they are challenged but happy and rewarded (even unfairly) for their contributions. Talk to them about their success and share these lessons with the next tier of your staff. Your business will do much better, irrespective of your turnover number.