Dysfunctional turnover: what it is and what it means

Dysfunctional turnover is the share of exits that involves key people and high-value profiles, as opposed to functional turnover, which concerns low performers or roles that need redesigning. It calls for immediate attention because it causes a loss of critical skills, overload for the colleagues who stay and hidden costs that are hard to quantify. In owner-led companies, where each key person often holds undocumented processes, the impact of dysfunctional turnover extends well beyond the period needed to fill the role.

Distinctive: key people and high-value profiles
Distinctive: as opposed to functional turnover
Essential: calls for immediate attention
Essential: loss of critical skills
Constant: key people

Glossary

Dysfunctional turnover

The share of exits that involves key people and high-value profiles; it calls for immediate diagnosis because it causes a loss of critical skills and significant hidden costs.