Resources: Blog Post

July 15, 2015

Bleeding Talent

Bleeding TalentEmployee turnover varies by industry, but on average ranges from six per cent to in excess of 30 per cent each year. Imagine such a large exodus of talent from  your organization on a regular basis.

I have tended to track turnover using two metrics:

  1. “Regretted turnover” which I define as Employees whose performance is at least meeting the expectations of the job, who choose to leave you (i.e. for another organization; for personal reasons; to do something else),
  2. “Non-Regretted turnover” which I define as people who choose to leave you or who you choose to part ways with, whose performance is not meeting the expectations of the job.

Over the years, I’ve worked with CEOs and other leaders to try to retain talent and have been successful in achieving low regretted turnover, and with helping leaders to help under-performing employees to improve performance, rather than losing these employees to the organization, thereby also reducing non-regretted turnover.

And although many leaders understand that the key to their ongoing business success is attraction, retention, engagement, and investment in development of their talent, I find that some still pay lip service to employee engagement, and are too quick to pull the trigger on talent that is struggling in their roles.

The cost implications alone, of high employee turnover and high employee churn (which I define as the combined effect both of employees leaving, and hiring all of those replacement workers, who will need time and support to get up to speed), are enormous. There are however other costs, not so noticeable, unless you’re paying attention, that worry me even more.

These costs include damage to the employer brand (which hurts recruiting efforts and lowers morale), knock-on departures, (as talented employees who see their colleagues leave, choose to also move on themselves,) lost productivity (as managers and Employees take time to train and help get up to speed, replacement hires), and lower employee engagement (as employees questions the organization’s adherence to its stated core values).

It’s an interesting fact that employees who are let go by an organization, for fit or under-performance reasons, always land somewhere else, where they succeed in either a similar or even more senior role in the new organization.

This fact supports my belief that talented individuals do not suddenly lose their skills, knowledge, experience, and character that had them successful earlier on in their careers, when they lose their jobs. Other factors must be at work which are causing them to not be successful and at risk of having their employment terminated.

These factors can include a change in leadership; a change in strategy; a change in the rules of the game; a change in employee responsibilities;  and/or a change in the individual employee’s life outside of work. Note that I use the word “change” consistently.

The one constant in business is change. As individuals, we all re-act to change differently and in different time frames. What is important for an organization then is figuring out how to help employees who are struggling; who no longer seem to fit in; to find a way to stay on in the organization.

Unless the organization is downsizing, or exiting a business or work process, the reality is that the organization will be rehiring for the role freed up by the departing employee.

Replacement costs for a new employee are staggering and include potentially, severance for the departed employee + search fees for the new hire + management/employee time to train the new hire + lowered productivity between the time the employee departs, and his/her replacement hire is fully up to speed.

I think that in many instances, to avoid the tough job of working with an employee who is struggling, to help them in the current role or in some other role to be effective, we’ve taken the easy way out as leaders and as HR professionals to simply exit this talent from the organization.

This bleeding of talent needs to stop. Organizations need to take a good hard look at their talent management practices. They need to strengthen their commitment to PIP (performance improvement plans). They need to better understand and measure the costs and consequences of letting talent go. And they need to take a longer term view of organizational success and well-being.

After all, business is cyclical… like the economy, it goes through better times and worse times.

When the good times come again, it would be nice to know that your organization’s reputation is intact; your employer brand, employee engagement, and productivity are strong; and that yours is the organization that no one wants to leave, and that all of the talent in the marketplace you hope to attract, wants to join your organization.

Have you experienced “regretted turnover?” What would you do differently?
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Image of David WexlerAbout the author

David Wexler heads up a Human Capital Consulting firm of the same name. David leverages his many years of proven expertise in building recognized market leading healthy corporate working environments in public sector, private sector, and crown corporations, across Canada, and in multiple countries world-wide to assist organizations looking to introduce or enhance Human Capital strategies that contribute measurably to overall business success.

He can be reached at david(at)

Filed under: david wexler, hiring, leadership, turnover Tagged: chro, hiring, leadership, turnover
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