A study finds that high-performing employees were more affected by layoffs than low performers

By Lisa Ward

June 10, 2023 11:00 am ET


When employees leave a company—voluntarily or not—they often inspire their peers to leave, too.

That is the conclusion of a recent paper that studied attrition at a major retailer. Among other things, the researchers found that attrition among employees rose after a layoff, as well as when a peer quit voluntarily. But they also discovered an important distinction within those results: High-performing and low-performing employees often responded quite differently to layoffs, firings and voluntary departures.

Leaving or staying?

For the study, the authors were granted access to a major retailer’s human resources system, which allowed them to see employees’ performance, as well as the reason why they left the company. The authors studied about one million employee records for 2014 and 2015.

They found that employees leaving often had a big impact on the ones who remained—but the average results hid some big splits among employees.

Take layoffs as an example. The authors found high-performing employees—employees whose performance reviews ranked in the top 40%—were often much more affected by layoffs than low-performing employees, those in the bottom 40%.

The attrition rate for high-performing employees increased by about a third to about 2% from 1.5% within six months of the layoff announcement. The attrition rate for low-performing employees, though, rose only modestly within six months of the layoff announcement, to about 2.15% from 2.01%.

Why? High-performing employees typically have more employment options, says Sima Sajjadiani, an assistant professor at the University of British Columbia’s UBC Sauder School of Business and one of the paper’s co-authors. As a result, when layoffs are announced, these individuals might pre-emptively begin job searches to secure new roles rather than wait to see if they would be included in the layoff.

“Companies should consider the possible ripple effect when they make decisions about layoffs, especially because high performers are disproportionately affected,” she says.

Highs follow highs

In some cases, the attrition rates for high and low performers don’t even move in the same direction. For instance, after an employee was dismissed for cause, the voluntary turnover rate for the entire sample decreased from 5.22% to 5.04% within six months of the termination.

But that is on average. When the authors broke down the sample set into high and low performers, they found that when a low-performing employee was dismissed for cause, the voluntary turnover rate among high performers actually fell to 1.43% from 1.5% within six months. But the turnover rate for low performers increased over six months to 2.24% from 2.01%.


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“High-performing employees may view the dismissal of a low-performing colleague as the organization maintaining standards, which can be seen as a positive sign about the organization’s commitment to performance,” Sajjadiani says. “On the other hand, low-performing employees might perceive the dismissal of a similar peer as a warning sign that they might be next, leading to an increase in voluntary turnover among this group.”

A similar pattern emerged for voluntary departures. Specifically, for every five employees who quit, another employee followed suit within six months. They also found that high performers tended to follow other high performers out the door and low performers tended to do the same.

But then came the split: Low performers didn’t follow high performers out the door. And when a low performer quit, it slightly improved the retention rate for high performers.

“Employees seem to be aware of their own level of performance,” says Sajjadiani. They often see a peer leaving as a signal to look for a better fit elsewhere—but only if that peer matches their quality of work.

The lesson? Organizations, says Sajjadiani, should maintain high performers’ job satisfaction, so they and their high-performing colleagues choose to stay put. But when low performers leave, they tend to take others with them—which might not be so bad for the organization.