Is Lower Staff Turnover a Good Thing?

Is Lower Staff Turnover a Good Thing? Quick Summary

 

• Falling turnover might look like a win—but it can hide deeper issues, like loss of top performers.
• Recruitment freezes and blocked progression paths can frustrate your best people, while “corporate prisoners” quietly remain.
• Smart HR leaders are interrogating their turnover data to protect capability, performance, and morale—not just reporting the headline number.

 

Introduction

 

This blog, with input from Chiumento’s Executive Chairman, Ian Gooden, explores what falling turnover could actually mean for your organisation.

On the surface at least, falling staff turnover is a good thing. However, does it create new and different problems?

Over the last few months, I have had a number of conversations with CEOs and senior HR professionals about the impact of current trends in the UK jobs market. The headline stories are consistent: demand for staff seems to be on an inexorable downward trend. This piece, published by BBC News, is a good example.

So, what actually happens when the jobs market tightens? Having spent over four decades in resourcing my conclusions are:-

 

Impact on employers

 

On the surface at least, it’s a good thing. Fewer opportunities make it harder for your existing staff to jump ship.

And fewer leavers mean you do less recruiting. Great news for your recruitment team and a welcome “breather” after the challenges of the post-pandemic era.

However, who is still leaving?

In my experience, even in the depths of big recessions like the aftermaths of Y2K and the Banking Crisis, the market for the very best talent continues largely unabated. Indeed, when things are tough, the focus on top talent can become even more intense.

So now is no time to give a sigh of relief and think the war for talent is over.

It is just entering a new phase.

One where the average person may find it harder to move but the best people are still in big demand.

 

The Hidden Risks of Lower Turnover

 

That great talent may now get more frustrated. If the people above them in their current organisation aren’t moving, where’s the career opportunity?

As our exit interview data constantly shows, failing to see where you go next in your current organisation is the biggest driver of resignations.

Failure to talk to your people about their career is not an option.

No matter what the jobs market. Your best people quickly become vulnerable. If you are not talking to them rest assured someone else will be. Be that another employer or a recruitment agency desperate to make fees in a tougher market.

Recruitment freezes often breed resentment. If the BBC News article is to be believed, more employers are holding fire on replacing leavers. The problem with that is that the burden often falls on the best. Expected to pick up the work of departing colleagues, they can quickly feel exploited.

What plans have you put in place to manage the impact of any recruitment freeze? What recognition will those picking up the burden receive? It can be fatal to believe they’ll just nod and get on with it…

There’s another potential downside of lower turnover.

Over 10 years ago Chiumento published a report on “Corporate Prisoners” – people who stay with organisations without being truly engaged. Individuals who typically do just enough to get by, but who withhold discretionary effort. They’ll stay, but at what cost to productivity and organisational development?

The combination of the best departing and an increased number of Corporate Prisoners can be a toxic mix.

I spoke to a CEO last week who is seeing just this scenario emerging in her organisation. The HR data says turnover has fallen substantially.

However, get behind the headline figure and the story changes.

The fewer leavers are typically the organisation’s top performers. The hardest to replace and the ones whose departure has the biggest impact on performance, customer relationships, quality and innovation. Those who are staying include mainly average performers. Over time the departure of the best is diluting the overall talent pool in the organisation.

 

The Strategic Risk: Erosion of Capability

 

For senior HR professionals, this is the key risk: the gradual weakening of your talent pool, hidden behind the false reassurance of improved retention stats.

Leadership capability, innovation potential, and team performance can all suffer quietly and cumulatively if the wrong people stay and the right people leave.

Now more than ever, it’s essential to go beyond the turnover number and interrogate what kind of talent decisions your organisation is implicitly making.

 

For individuals

 

The market is tougher than two years ago. Notably so in some sectors, disciplines and at senior level.

Job search times have generally increased – fewer people are walking straight out of one job and into the next.

The number of job vacancies in the UK fell by 56,000 (7.2%) between April and June 2025, totaling 727,000. This was the 36th consecutive period of quarterly vacancy declines, and vacancies are now 143,000 (16.5%) lower than a year ago and 68,000 (8.6%) below pre-pandemic levels (Jan–Mar 2020). (ONS, 2025)

Competition has increased as candidates have fewer opportunities to chase.

I have no doubt that at times like these, outplacement support makes a huge difference. Sharpening that CV so it stands out from the crowd. Preparing properly for that interview or assessment day. Small margins can make a huge difference to the outcome.

When the jobs market turns down the temptation can be to stay put. “Better the devil you know” and all that. However, what about the mental and emotional toll of doing a job that you don’t actually like?

I’ve coached individuals in exactly that situation. And it’s not a good place to be. 

They often fear speaking to the organisation about how they feel. It is so much easier to talk about systems, processes and policies than emotions. Having the right conversations with the right people can unlock many new and unexpected opportunities to change the dynamics. And reset the employment relationship in a positive and constructive way.

 

What This Means for HR and Line Managers

 

From an organisational standpoint, this is a call to action: create the space for real conversations. In uncertain markets, employees may retreat into silence, but their dissatisfaction doesn’t disappear. Instead, it festers.

Equipping your managers to talk meaningfully about career progression, development, and emotional wellbeing isn’t a “nice to have” right now, it’s critical risk mitigation. A simple check-in could make the difference between retaining a top performer or losing them quietly to a competitor.

 

Ultimately, my two key messages are this:-

 

As an employer: don’t fall into the trap of believing falling staff turnover is inherently a good thing. Dig beneath the headline numbers and investigate who is actually going. Looking at the performance ratings of those departing can, for example, be a really insightful exercise. If your brightest and best are exiting, you have a real issue.

 

As an individual: don’t get trapped in a job where you are unhappy. In time that will likely be reflected in your behaviours and your performance. Take control of the situation rather than becoming a victim.

 

Final Note for HR Leaders

 

The smartest organisations won’t celebrate low turnover, they’ll analyse it. They’ll ask:

• Are we retaining the right people?
• Are we rewarding the extra burden placed on our top performers?
• Are we creating environments where ambition and energy are channelled productively?

In this market, retention strategy is risk strategy. And complacency is costly.

 

Let’s Talk Career Conversations

 

When your best people can’t see a future inside your organisation, they start imagining one elsewhere.

Chiumento’s Career Coaching helps your employees get clarity on their goals and discover new opportunities within your business before they look outside. From internal mobility to re-engagement, our coaching programmes turn passive frustration into proactive retention.

✅ Give your top talent a reason to stay.
✅ Equip managers to have meaningful career conversations.
✅ Reduce regretted resignations and the cost of replacing key performers.

👉 Find out more about our Career Coaching service

Or get in touch for a confidential conversation about how we can help.