Most business owners are overjoyed to exclaim “my employees never leave!” and it should be celebrated, you are doing something right. Hopefully you have new employees coming in because you are growing.

If you don’t have new employees coming in – this is an amazing accomplishment. However, I want to ask you “what is it really costing you?”  Yes, you read that correctly – costing you. You are a small company and have had the same employees for the last couple of years or more. While you have achieved excellent customer service, smooth systems and everyone can work well together – do you have creativity? How about innovation? How about a different point of view?

Having no employee turnover can cost you in terms of creativity, innovation, ideas, costs and efficiencies. How?

Creativity, innovation and ideas can become sacrificed by lack of an outsider.  Someone who comes in and says “why do we do it this way” or “have you tried…”.  Think about it, if you are always surrounded by the same people for a long period of time – how will you get new information or ideas.  You will need to actively seek ways to stimulate creativity for you and your staff.

Costs come into play when you analyze salaries.  The longer people are with you, the more they will earn.  Which by itself is not an issue and you want to recognize their loyalty.  If your team is full of loyal and high salary employees it may become an issue especially if you have a product or service that is sensitive to cost increases.

Efficiencies can be lost by those who work with each other for a long period of time. People will learn to work around each others weaknesses or quirks. Also, will they ask each other “is there a better way?”. You may also encounter some who will do only what is necessary to get the job done. Above and beyond is no longer practiced.

To avoid all of these you will need to foster an environment of growth and learning. Without it, you will become stale.

The next question is usually – how much turnover is good? There is no magic number and it will depend on your business. If you twist my arm, I would say around 8-12% a year.  For example in a company of 100 employees that would be one employee a month.  That’s may not seem like a lot however if the rate is consistent each year – you will have those new ideas, innovation, etc. based on new employees alone.

While turnover is one way to get the sparks going in your organization, you cannot let it stand alone.  You must be constantly challenging your people to perform better, seek new ideas, and question the status quo.