POSTED: October 10 2018
Employee retention: 5 situations when it’s a bad idea

Employee retention: 5 situations when it’s a bad idea

Recruitment and training cost time and money, which is why retention is a core HR metric in many organisations. There are other benefits to retention, of course, such as keeping tacit knowledge close at hand. But are there any scenarios when retention isn’t the best course of action? The answer is nuanced – Investors in People have outlined their reasons – read on for their five examples that show you why.

When brilliance costs too much

We all know people who are technically incredible but lack interpersonal skills. This has become a trope in certain industries and the incidence is probably overreported; nevertheless, these people do exist and it’s important that organisations can handle them.

Unfortunately, the interpersonal friction and negative effects on morale are often tolerated because of the individual’s outperformance. Where these employees have moulded the job to suit their abilities, organisations may be concerned the person has become ‘unreplaceable.’

And yet the costs of tolerating these individuals can be too high, particularly in organisations where creativity, collaboration and innovation are essential to success. Employers must tackle the issue head on, helping the employee retain their positive traits while addressing their negative behaviours.

If this doesn’t work, it’s a question of whether the situation is acceptable for the long-term good of the organisation. For Netflix CEO Reed Hastings – whose business operates in a dynamic, fast-paced commercial environment where multidisciplinary teams must work closely to improve the customer experience – the cost to teamwork is simply too high.

When they’ve outgrown your company

Take an honest look at how you attract and retain employees. If you’re a large corporation you may outbid the market. If you’re a small company, you can’t outbid the market, so you may pay under-market rates but attract people with incredible flexible working opportunities. Or perhaps you give graduates a chance to rapidly scale their skills in a supportive environment.

Whatever strategy you have, it’s a fact of life that people will eventually outgrow you. This is particularly true if your strategy targets a certain demographic, such as graduates. People outgrow positions for different reasons, such as hitting a career ceiling or failing to find further opportunities for personal growth.

It may be nothing to do with the job: if you pay under-market rates and attract candidates with flexible working, bear in mind that when people buy a house and begin paying a mortgage, they may start to value higher pay over fringe benefits.

Whatever the reason, it’s useful to have an honest conversation with your employee and see if it’s in both your interests for them to move on. Retaining people beyond the point of mutual productivity risks overreward, stymies personal growth and prevents you bringing in fresh talent.

When their cynicism becomes damaging

The best employees support and challenge the organisation, acting as empowered followers while making sure that ideas meet the right level of resistance in order to innovate and improve. Where necessary, they act as devil’s advocates to ensure that organisations do not sleepwalk into poor decisions simply because these decisions have not been critiqued.

But there’s a difference between scepticism and cynicism. Being sceptical protects against complacency, mitigates the risk of groupthink and fosters a healthy attitude to innovation. Cynicism damages team morale, picks holes for the sake of it, accepts nothing except 100% infallibility and sets perfectionism as the norm.

Cynics do not fit well into teams but are often tolerated because they may be long-time employees and ‘that’s just who they are.’ Unfortunately this normalises behavioural issues and encourages separate performance standards for different employees.

Cynicism must be tackled because it can spread quickly. It’s a hard truth to be faced with, but it’s also uncomfortable knowing you’re seen as negative, so employers may get the best results (retaining a valuable employee and improving their attitude) by being proactive and having that difficult conversation.

When they negatively impact the prevailing culture

Strong cultures are great, but it’s important that employees aren’t simply assimilated into your culture: new ideas and viewpoints act as checks and balances on the cultural beliefs prevalent in organisations. Cultural beliefs should always be strong but loosely held, open to positive influence where possible.

New employees have a unique outsider’s view and so can present useful insight on the prevailing culture’s strengths and weaknesses, which are hard to see when you’re ‘in the eye of the storm.’ Sometimes new employees experience interpersonal friction as they learn the cultural boundaries and test them with line managers and colleagues. This is normal and typically settles down.

Yet there are instances where new employees heavily repel the prevailing culture and simply cannot find a way to integrate successfully. Perhaps the nature of your organisation requires employees to be highly autonomous in an extremely flat hierarchy, but your new starter requires hands-on management and external motivation. Sometimes the cultural differences are too great and require remedial action.

This is particularly true when the new employee doesn’t just struggle to integrate but upsets the established balance: for example, if employees at your organisation follow specific cultural norms and the new employee refuses, it can quickly lead to resentment (particularly when these norms are prosocial).

When there are concerns during the probationary period

If there are concerns during the probationary period, when everyone is on their best behaviour, it’s time to look deeper. Retention isn’t necessarily a bad idea when you have concerns at this stage, but the worst thing you can do is pretend everything is alright and think you can just sort out problems at a later date.

Passing probation is a sign of approval and although there’s always room for improvement, it will jar if you pass someone and then start trying to performance manage them. Tackle the concerns early and extend the probationary period if necessary.

If you have genuine reasons for extending the probationary period and clear targets the employee needs to meet, there should be no reason why the relationship can’t prosper in the future throughout the extended probationary period and beyond.


You can find out more about Investors in People here.


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