Can voluntary attrition be good for a company?

A slightly different take. I currently work in a Firm where, in the smaller offices where career progression is sometimes not fast enough for everyone, voluntary turnover is 'managed'. We assist certain high achievers to move into client organisations or smaller competitors where a potential workshare situation may result. It has always worked out as a win-win because the (ex) employee feels that they have been taken care of, the new organisation is receiving a high quality new employee and the original Firm has increased its profit levels through new work coming in. Obviously there must be succession plans in place to cover the [knowledge] gap created by the leaver (but this is part of the 'leaver process'). Further, sometimes these people come back to us at more senior levels with 'outside' world experience mainly because they have such positive memories of their time with us.

One other point about voluntary attrition, particularly in management positions: it frees up key roles. That can be a benefit for other high-performing, high-potential employees, even if it's high performers who leave.

I come from a high-turnover industry, and we have two types of voluntary attrition: people who leave because this industry isn't right for them (good attrition; it frees up resources), and people who leave because they think they can do better with a competitor (bad attrition; we're doing something wrong!). The former doesn't bother me at all. The latter is definitely worrisome.

It all depends who you are losing. If it is the star performers who can get jobs readily elsewhere, then no it is not healthly. If you can somehow only lose the ones that are not performing at a high level, then attrition can be a good and inexpensive way to trim employment levels. So I guess the answer is....it depends.

So if you're losing the ones that are "not performing at a high level" what does that say about the success of your organization's hiring efforts and/or performance management efforts and/or coaching and development efforts? Doesn't it say you either hired the wrong person or you didn't give them the support and/or resources they needed to be successful? Is that good?

Voluntary attrition happens, no matter how great an organization is.

Sometimes you're losing people who were not to hot performers, and sometimes you're losing superstars. Either way, the organization will generally move on without great difficulty.

The only factor that would concern me with voluntary attrition is the frequency and extent of loss. One or two people ever so often will be fine -- maybe better than fine. As Eric pointed out, an influx of new people will help an organization avoid becoming stale. New ideas can bring new life.

So, periodic voluntary attrition is unavoidable and almost desirable -- just so long as the frequency isn't too short, nor the quantity at one time too large.

I like all of your responses...thanks for them. Here's where I get concerned: when I hear organizations using it as an excuse. For example, an organization may have an unusually high turnover rate but they will try to justify it by saying "a certain amount of turnover is healthy." I just think we have to be careful about using "healthy" as a cop-out for what might be real fundamental systemic issues. Every lost employee - whether due to performance, or fit, or recruiting, or development, or life change - has an impact on the business. Despite your great analogy, Eric, productivity, investment, focus, and time are all impacted...even if not readily identifiable or felt. It costs an organization - tangibly and intangibly - when it loses people for whatever reason.

I think having VOLUNTARY turnover of 0% is something we should all aspire to. Realistic? Probably not. But it wouldn't be a bad thing. I'm not saying there shouldn't be involuntary turnover...in fact there absolutely should be. But that way, the organization is calling the shots based on meaningful business criteria, not something that's broken and could be fixed. Just another perspective...

Charlie. I don't disagree with you ... (love double negatives) meaning I agree with you ........ that a company should have a goal to develop a retention program that works. As you point out, if a company has that, then when a valued employee leaves, it's not a cover up. But, my post was based in reality, not wishes. And my experience has been that whatever a company does, it can reduce the voluntary turnover rate, but it cannot eliminate it. That is because of a number of reasons we can all list and understand. So, back to my point, which I think we agree upon: we might as well build the best mousetrap we can and then be as prepared as we can be for (voluntary) turnover when it occurs.

Voluntary turnover is a good thing if an employer is well-managed but not growing fast enough to keep all good employees moving up the career ladder. Such an employer will not be caught short since there are other employees ready to move up. The employer must be well-managed.

Voluntary turnover is a bad thing if an employer is loosing employees soon after they are hired or before they reach their terminal position; everyone can't be the CEO.

Executives need to study their turnover rates as follows, by....
- Executive
- Manager
- Supervisor
- Department
- Shift
- Location
- job
- etc.

The most important criteria to look at is the turnover rate by quality of the employees leaving;
- Top Performer
- Average Performer
- Bottom Performer

A manager with 5% turnover rate may doing much worse than a manager with a 15% turnover rate if the 5% manager is losing all Top Performers and the 15% manager is losing all Bottom performers.

There are good, more detailed answers here already, so I'll just offer this quick perspective.

Voluntary attrition *can* be good for a company, when:
- It's a low performer or someone who was about to be managed out anyway. Their voluntary passage reduces company risk in managing them out (which is why 0% voluntary turn is not a realistic or good goal in the real world, where selection will never be 100% accurate).
- At a time of slow business or poor economy when it reduces the number of employees who would be involuntarily laid off (it's good when the churned employees would have been selected for downsizing, but may be bad if the turnover occurs with employees the business wanted to keep).
- The companies employee and leadership development programs are so good that there aren't enough internal roles for qualified candidates. This sounds unfortunate, and is, and the company should explore ways to utilize their budding talent to grow the business further. But in one sense it does help the company build a great reputation for developing good employees and leaders (think "GE"). This can be a good recruiting tool. And since it's a well-touted fact that an employee's best shot at a substantial leap in pay and responsibility is to make a move outside, I don't we'll ever completely eliminate voluntary turn of good performers.

Quick disclaimer... I'm not saying that all of these things are "good," per se, so I don't want to get caught up in an unproductive debate about that. I'm simply answering the direct question, "Can voluntary attrition be good for a company?" Yes, it can.

It all boils down to.
1. If you are losing high performers it is bad.
2. If you are losing average are low performers it is good.

Everything else is just justification.