As cost centers, human resources have opportunities to shine whenever they act as profit centers. And employee turnover presents opportunities for companies to make money.

Yes, that’s right. Employee turnover can help you make money retention.

Let’s examine why by starting with a brief discussion of old school and new-school thinking.

In the management of human resources, it’s long been considered a best practice to focus on mutual benefits. That’s especially true in preventing employee turnover.

A state of mind with a zero-sum approach that impedes employee engagement – is so 1950s.

But it isn’t always easy to focus on mutual benefits in this competitive marketplace.

Meantime, employee turnover can be very costly. No one likes to lose a good employee nor is it fun to lose an employee who’s had access to proprietary information.

So it can be costly to lose an employee’s talent and knowledge, as well as incur new costs in recruiting and hiring a replacement.

For many such situations, non-compete agreements and legal precautions are necessary.

But turnover doesn’t always have to be a negative red flag and result in a critical loss.

Two reasons why:

— Turnover can serve as a positive warning for cultural issues, as long as you identify and solve the issues.

— Turnover can also be a positive sign that you’re developing your employees.

Design a balance sheet

If you have a turnover problem, it’s productive to learn why. You also need to learn which of them represent risks and those who aren’t.

There’s a big difference in terms of risk in employees who resign to work for your clients or vendors (e.g. group A) vis-à-vis your competitors (e.g. group B).

Employees in group A, represent opportunities for your growth. Such former employees might eventually serve as your brand ambassadors or provide you with competitive insights.

From employees in group B, people who go to work for your competitors, it’s a possible threat but not always. Distinguish between competition and customer.

Ask yourself: “Is this company a competitor in all lines of business?” If not, go easy.

Silver lining

You’ve heard the expression, “Every cloud has a silver lining.” A silver lining is a metaphor for optimism.  (It refers to a phrase written in 1634 by John Milton in Comus: A Mask Presented at Ludlow Castle.”)

Just as a cloud can be an impediment, employers can take steps to make certain that employee turnover has a silver lining.

Instead of fretting over employee turnover and possibly amputating relationships, why not be optimistic and capitalize on the turnover?

With the right approach — to engage and partner with your staff – employee turnover is a stimulus for profit by enhancing competitive intelligence and business development.

You can spot countless examples in the interactions on LinkedIn and elsewhere.

Profit opportunities

Turnover is an opportunity to increase the value of your human capital. That’s possible when departing employees share their knowledge with co-workers before leaving the firm.

Many departed employees continue to maintain their relationships with their former co-workers.

Further, they share their newly learned ideas and information from their new employers with former co-workers.

Relationships are enhanced as employees continue to share ideas or even as they compete with one another.

Companies profit as their former employees and current workers promote themselves online, in industry associations and pro bono work.

Many companies have alumni networks which work well with their outreach strategies – for rehiring employees, company branding, strategic alliances and word-of-mouth advertising.

What are some other ways?

From the Coach’s Corner, related information:

Management: How to Help Employees to Grow Professionally — Managers owe it to the organization to help their employees grow professionally. It’s hard, time-consuming work. But the return on investment is terrific.

Human Resources — Strategies and Metrics for Business Profits — Professionals in human resources could use more respect in the C-suite. To silence critics and to garner praise for helping their companies to profits, obviously, it’s in the best interest of HR professionals to use the right strategies and metrics.

Trends — Employee Engagement and Business Success — Many companies will be more successful if they update their approaches in human resources. That’s the obvious conclusion from eye-opening information that was revealed in a survey of 40,000 employees at 300 companies. When companies implement outstanding human resources programs, they’re more profitable than their competitors that don’t.

HR Tips — So Your Recruiting Enhances Diversity, Not Sexism — Can we agree that a diverse workplace leads to innovation, problem-solving and enhanced enterprise communication? And, as you know, inequality is unlawful. Why then are there so many companies that unknowingly, perhaps, promote sexism? That’s right. An academic study shows that many job postings are gender biased.

Human Resources – Power Your Brand with Employee Empowerment — Are you investing in marketing, but not getting the anticipated return on your investment? If you’re disappointed by your ROI, remember marketing may or may not be the problem. Why? Consider there are two basic reasons for poor profits – again, that’s profits not revenue.

“It might be said that it is the ideal of the employer to have production without employees and the ideal of the employee is to have income without work.”

-E.F. Schumacher


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.