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Why you should fire someone today

Focusing on employee retention at all costs breeds mediocrity. Healthy companies embrace turnover

Unidentified worker holding a Banker’s Box full of possessions

Too many companies rely on the institutional memory of a few deeply entrenched veterans. (Spiderstock/E+/Getty)

Alkarim Nasser has learned that it’s OK to fire people. It didn’t come naturally; like many employers, Nasser, who founded Toronto-based mobile strategy and analytics firm Bnotions in 2008, was uncomfortable terminating talent he’d worked so painstakingly to attract in the first place. That is, until he realized how much better off his business would be as a result.

“I feel like there’s a hesitation when you have to let someone go. You get paranoid about how it will affect the culture, how it will look,” he told a PROFIT 500 researcher earlier this year. “But I’ve realized when you just make the decision to fire someone you find yourself back on track.”

Nasser has grasped something few of his peers have: A bit of turnover on the payroll isn’t the end of the world. In fact, it’s a good thing.

Employers in Canada—especially smaller, entrepreneurial firms without the capital or cachet to be an obvious destination for the best and brightest—are obsessed with retaining staff. They’ll offer bonuses to people just for sticking around. They’ll bend over backward to accommodate individual work preferences. They’ll cram in every perk and privilege they can afford. Massage table in the meeting room? If it keeps a guy in sales from cruising LinkedIn on his lunch break, why not?

MORE: Why Are Your Staff Leaving? »

This is understandable, to an extent; the skills gap is wide enough that even so-called “employers of choice” struggle to find sufficiently qualified candidates. Once someone great is in the fold, it’s only natural to want to keep them around for as long as possible. Factor in the cost of hiring someone new, the hassle of training them and the disruption to business as usual—all of which can be significant—and it’s certainly easier to maintain the status quo.

Easier, yes. But not better. The occasional departure—or even firing—creates healthier and more energetic companies.

Labour dynamics are changing; most workers today don’t put a lot of stock in employer loyalty. (A recent Randstad Workmonitor study found that 65% of Canadian employees would have no problem leaving their job at any given moment.) Blame the much-maligned Millennials, most of whom plan to change jobs every three years or so, if you like, but they’re not the only group driving this trend. Other factors—including the increasing appeal of freelance life among young professionals, as well as retirement-age boomers looking for short-term “career epilogue” contracts—suggest the era of the “company man” is over.

MORE: How to Retain Millennials »

Moreover, keeping the same bums in the same seats is a recipe for mediocrity. While many employees are able to grow and thrive in a position over time, many simply are not. They grow complacent, they get bored, they become disengaged to the point that a new foosball table or company retreat isn’t going to do anything to draw good work out of them. And, more often then not, they start to bring down the morale of those they work with. It is not a tragedy when these people leave, whether by choice or by force. It frees them to do work to which they’re better suited. When the person was a known slacker, their departure can boost the spirits of the remaining staff. And it creates the opportunity for new people to come into an organization, who bring with them new energy, enthusiasm and ideas.

Also—and not for nothing—regular turnover forces leaders to confront some important questions about the scalability and sustainability of their businesses. Too many companies rely on the institutional memory of a few deeply entrenched veterans. When staff are regularly coming and going, firms have no choice but to codify the processes, practices and policies that otherwise live in someone’s head—a step that is instrumental in facilitating sustainable growth.

All of this is not to suggest it’s a good idea to fire your whole staff every year; a healthy core of engaged employees is something to which all companies should aspire. But when someone resigns or warrants dismissal, there’s no need to panic. Take a cue from Nasser and view it as the opportunity it is.