Second of two parts
Yesterday, I listed 10 reasons why turnover might actually be a good thing and why you might not necessarily want to keep long tenured employees.
As I pointed out, you need to step back and think about it: Should all employees be kept or just the ones who currently and in the future produce high value?
In particular, should the employees with the most tenure be automatically kept, even though they may be expensive, and in some cases, they may be one of the primary roadblocks to corporate change?
15 more reasons why you might want employee turnover
If those 10 reasons yesterday are not enough, here are 15 additional reason why long-tenured employees could be problematic:
- They defend the culture right when it must change – My work in the corporate world has revealed that long-tenured employees are the most ardent defenders of the corporate culture. Unfortunately in a fast-changing world where revolution is everywhere, the corporate culture must continuously evolve. Those that continually remind others that “this is the way we do things here” may be the anchors to the past that are most detrimental to your change initiatives and the firm’s long-term success.
- Long-tenured employees may be the most expensive – In most organizations, a long tenure means a series of pay raises that may result in them being paid the highest salaries and the maximum amount of vacation. If you’re trying to create salary savings, long-tenure employees are likely targets if their performance is at such a level that a junior employee can do the job at a similar performance level. If their performance is superior, there can still be a positive ROI, despite their higher salary costs. If they are merely “coasting” until they qualify for their pension and retirement, their costs to the organization may be even higher. Their value may be justified if they have long-term customer relationships, provided of course that those contacts remain customers.
- VUCA requires adaptability – In a turbulent VUCA world, adaptability and speed are critical for success. Unfortunately, long-termers who are grounded in the past may not want to or have the capability to adapt to a fast-changing world. Research by the Harvard Business Review determined that “You can’t have an agile company if you give employees lifetime contracts — and the best people don’t want one employer for life anyway.”
- The best don’t want to stay for their entire career – The best employees may desire to continually grow, learn, and be challenged, and as a result, they don’t even consider the idea of staying in a single firm for their entire work life. In some cases, these long-tenured employees may stay at a single firm for the wrong reasons, either because they don’t have the initiative to look for a new job or because recruiters at other firms simply don’t find them desirable. If the company is in trouble, the best are likely to have choices and to leave early, thus unintentionally increasing the percentage of employees who are mediocre.
- There may be diversity and tolerance impacts – Individuals from different generations may be less tolerant of diversity and the differences found in international employees. They may look down on and even refuse to work with employees who come from new generations. Even the perception of the existence of “a good old boy network” can scare away “new generation” applicants and recent hires who now demand a high level of tolerance, transparency, and diversity.
- They may not be forward-looking — They may be so comfortable with the past that they stop being forward-looking. This may cause them to fail to see the upcoming obsolescence in what they currently do, and it may reduce their interest in developing forecasts and future plans that vary from the current or past ones.
- Their learning may slow – Google data has found that learning ability is a universally critical factor in employee success in a fast-changing business world. Even though long-tenure employees may be able to learn, they may assume that they already know it all or they may simply learn in a way that is ineffective in a social media world. In addition, the fact that they are comfortable and complacent may reduce any interest in further development. Their lack of interest in rapid learning may unfortunately cause them to fail to support it in others, which may cause other employees to unnecessarily reduce their learning speed.
- Being in leadership positions increases their negative impacts –Because long-tenure often leads to promotion into manager and leadership positions, you must consider the possibility that their decision-making may reflect an over-reliance on the past. Given that they probably hold formal organizational as well as political power, their ability to block and slow change maybe even stronger than you think. They are also more likely to be comfortable with a command-and-control style of management, even though a freedom and empowerment approach may be needed with a modern workforce.
- Their speed may decline – Speed and the ability to move quickly is essential in a fast-moving world. Long-tenured employees may have lost their sense of urgency and they may have simply lost their ability to move fast.
- They may be satisfied with past successes – Just like in sports, people who have won previous championships may simply become satisfied with a firm’s past successes. A “been-there, done-that” attitude toward winning and industry dominance may lead to mediocrity and being satisfied with past victories. To further complicate matters, they may also be overly optimistic about the future, even though the firm’s capabilities have severely declined.
- Their stagnation may limit the movement of others – If their performance and learning have plateaued, it is highly likely that long-tenured employees will no longer be selected for any new internal movement or promotions. Their lack of movement may serve as a type of roadblock that may limit the opportunities of other still-growing employees below them to move up, which may frustrate those who feel that they have earned the right to move up within the team.
- Their high engagement may not be related to performance – Because they are fully bought in to the culture, values, and the status quo, they are likely to be extremely loyal and engaged. However executives must consider the possibility that their high engagement level will not correspond with higher performance.
- They may mentor and coach others in the wrong direction – Even if they are well-intentioned, they may inadvertently coach and mentor new hires and developing leaders “in the old ways.” This might confuse employees when corporate leadership is saying one thing and these long-tenure employees are sending a different message.
- They are more likely to resist M&As – Mergers and acquisitions are a frequently used and needed tool for increasing corporate growth and market share. But because M&As invariably disrupt the corporate culture and force major changes, long-termers are likely to resist any M&A move. And because of their power base and influence, the resistance is likely to be effective even though an M&A might be the best economic move for a struggling company. And if one does go through, long-term employees are likely to inordinately insist that the traditional ways and processes remain dominant.
- They may be hard to get rid of – Even when executives realize that long-time employees need to go, they often proved to be the hardest to release because they have learned how to use power and influence within the organization. Because of the long tenure, they know how to positively influence performance appraisals, forced rankings, and layoff lists. And if they also happen to be over 40, they know that age protections make it even more difficult to release them. And finally, their salary costs may be so high that other firms may have no interest in recruiting them away.
During my tenure as chief talent officer at Agilent, I immediately noticed that the strong resistance to change came primarily from proud long-tenure HP employees. But unfortunately, almost every corporate leader there thought they were an asset.
Ever since then, I find that it is problematic to write or talk about the possible negative impacts of long tenure, because of the guaranteed high volume of negative responses that even mentioning the possibility will generate from long-tenure employees and those who defend the aging population.
In case you think I have a bias for youth and inexperience, note that I am 67 and I have worked at the same organization for 35 plus years. So for the record, I agree that you should never stereotype and lump all long-tenured employees into a single positive or negative basket. What I do recommend is that firms look at individual jobs and employees to see if there is an inflection point or peak where on average, performance plateaus.
If you do find a plateau or a decline, it makes economic sense (given all the time and money that you have invested in these employees) to develop programs and plans to see if any decline in performance, learning, attitude etc. can be quickly reversed (as Google has found in the case of long-tenure employee satisfaction).
Incidentally if you are interested, my original article, Not All Turnover Is Bad, Celebrate Losing the Losers, highlights many additional reasons why some employee turnover can even be a positive thing for a firm.
Did you miss Part 1? See Why Some Employee Turnover May Actually Be a Good Thing