When Employee Retention is a Bad Thing


I walked into a friend’s office the other day, and touring around their space, was told about their incredible employee retention rates. “People love to work here, the average person has been here 11 years.”

I have to admit, I was impressed. In today’s world of fickle employees and ever-increasing job market competition (especially among the tech sector, as these folks were), employees that stick around much past two years is increasingly rare. Given how expensive it is to hire new talent, having them stick around as long as possible is great, right?

Maybe. Maybe not.

Assuming these employees that are sticking around are still doing their job, not worthy of firing, keeping them around doesn’t do direct harm. But, it might do indirect harm.

Back to my friend’s company. As I was talking to some of their devs, and looking at some of their products, I couldn’t help but notice: everything was mediocre. No real risks being taken, no real new ideas. Sure, things were stable enough, but decidedly unexciting. Conversations with the employees was punctuated with trappings of long-term culture, while talk about how “that couldn’t be done, we tried that years ago” gave me an unsettling feeling that the whole enterprise was just lumbering on.

Alive, but not living.

This is the problem with long-tenured employees. Like a pond that grows stagnant due to lack of water movement, so does an organization get stagnant due to a lack of talent movement. Ideas fall into the same ruts. Conversations follow the same patterns. Things that have tried and failed before aren’t experimented with again. Desparate to protect the status quo, and hampered by organizational habit, things plod along slowly. The fish in the pond are still living, but they’re swimming slower and slower every year.

When fresh talent comes into the organization, it’s a chance to mix things up. New ideas and viewpoints come in, and challenge status quo. New methods challenge old ones, and innovation starts to seep out of the edges. Sure, it causes some wake here and there, but if you’ve hired good people, you’re probably coming out ahead for it.

This isn’t to say you should fire all your people, that’s clearly foolish. But, if you’re looking at your organization, wondering why you’re not moving as fast as the next one or why your products aren’t as interesting, and the same butts are in the same seats they were in 10 years ago, you might have found the problem.

Streams are far more interesting places than ponds.

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