Effects of Labour Turn over on Performance
Despite this, the research community remain mixed on whether high turnover impacts upon performance. There appear to be some contrasting hypothesis at play.
The first suggests that turnover naturally affects performance. Those that leave are often experienced staff, and it naturally takes time to replace that expertise. They also develop the internal networks required to do their jobs well, which again is difficult to replace in the short-term.
A second hypothesis is that companies with high staff turnover don’t suffer because they never get a chance to build up the experience and connections required for staff loss to affect them. It’s literally a case of them not missing what they don’t have. They also build up significant expertise at replacing staff, even if not so hot at keeping them.
A final theory is that turnover can be beneficial to an organization because it weeds out the poor performers whilst also bringing in fresh ideas and perspectives from outside. This theory relies on turnover being relatively low; as once it reaches two high a point the costs exceed the benefits.
A Meta study of over 250 pieces of research has been concluded recently that compared the various hypotheses towards employee turnover.
It found that employee turnover was generally speaking a negative thing, with an increase of turnover by 1 standard deviation contributing towards a 0.15 drop in performance. When turnover became higher, this decrease in productivity became stronger.
Not all instances of high turnover were equally disastrous however, and they found some interesting nuances to the phenomenon.
High turnover hits some metrics more than others
For instance, they found that employee turnover affects some performance measures much more than others.
• Customer Satisfaction and Quality showed large effects
• Weaker effects found for employee attitudes, productivity and financial performance
• Generally the effects were greater when measuring performance soon after the
The first suggests that turnover naturally affects performance. Those that leave are often experienced staff, and it naturally takes time to replace that expertise. They also develop the internal networks required to do their jobs well, which again is difficult to replace in the short-term.
A second hypothesis is that companies with high staff turnover don’t suffer because they never get a chance to build up the experience and connections required for staff loss to affect them. It’s literally a case of them not missing what they don’t have. They also build up significant expertise at replacing staff, even if not so hot at keeping them.
A final theory is that turnover can be beneficial to an organization because it weeds out the poor performers whilst also bringing in fresh ideas and perspectives from outside. This theory relies on turnover being relatively low; as once it reaches two high a point the costs exceed the benefits.
A Meta study of over 250 pieces of research has been concluded recently that compared the various hypotheses towards employee turnover.
It found that employee turnover was generally speaking a negative thing, with an increase of turnover by 1 standard deviation contributing towards a 0.15 drop in performance. When turnover became higher, this decrease in productivity became stronger.
Not all instances of high turnover were equally disastrous however, and they found some interesting nuances to the phenomenon.
High turnover hits some metrics more than others
For instance, they found that employee turnover affects some performance measures much more than others.
• Customer Satisfaction and Quality showed large effects
• Weaker effects found for employee attitudes, productivity and financial performance
• Generally the effects were greater when measuring performance soon after the