Turnover benefits: the other side of the "costs" coin

High levels of turnover have traditionally been viewed by human resources managers as having a negative effect on the organization. But the authors--Idalene F. Kesner, associate instructor in business policy, and Dan R. Dalton, assistant professor of administrative and behavioral studies, both at the Graduate School of Business, Indiana University--maintain that responsible levels of employee turnover may have both direct and indirect benefits for the organization. Such benefits include displacement of poor performers, an infusion of new knowledge in the organization, and the stimulation of changes in policies and practices. In addition, of course, there are opportunities for cost reduction and consolidation. Using data compiled from the experience of a California public utility, the authors show how to calculate the direct, hard-dollar value of the savings that can be realized in regular pay, overtime pay, pension contributions, earned but unused sick leave, and other areas.