Firing underperformers can boost your team's retention

Mint

21-07-2025

Last week a post by Vedika Bhaia, a Mumbai-based co-founder of a marketing and branding start-up, blew up on LinkedIn. It began with a counter-intuitive remark that resonated with many on the professional networking platform: 'We fired 3 people in one month and our retention actually improved."
Bhaia went on to explain that over the last year her agency saw an alarming rate of attrition in spite of paying competitive salaries, allowing flexible work hours, and giving out decent perks. Talent still kept quitting every month, until she decided to look deeper and lay off underperformers.
Bhaia followed it up with changes in the culture and ethos of the company. She rented a physical office space instead of operating fully remotely and started offering hikes proactively rather than waiting for someone to fight for it. While none of her measures was novel, the first one isn't usually where most human resource executives start when they are looking to solve the problem of talent drain. That's largely because retention is correlated with transactional quick fixes.
Most talent teams tend to offer carrots to entice an outgoing resource. From a salary hike and promotion, to softer touches like periodic office parties and offsites to create a feel-good factor, to public praise for individual excellence, a combination of these familiar levers is deployed during such exercises. It's not that these strategies are ineffective. But such actions can only arrest attrition in the short term—not 'solve" it in any meaningful way.
In reality, the root of the problem often lies elsewhere—especially in the environment created by colleagues, be they seniors or peers, who have usually been part of the system for a long time.
In the lead up to Vishal Sikka's resignation as the chief executive officer and managing director of Infosys in 2017, the company was riddled with complaints about a bloated middle management that was resistant to change and innovation. Frustrated, hordes of employees quit Infosys, especially once Sikka's departure became public knowledge. The company's overall attrition rate for the financial year 2017 was a staggering 19.2%.
Rules of Engagement
The 2025 State of the Global Workplace Report, published workplace advisory and consulting firm Gallup says ,'In 2024, the global percentage of engaged employees fell from 23% to 21%." A 2% dip in engagement cost the world economy a productivity loss of US$438 billion. If you look at employees who were not engaged or actively disengaged, the numbers are even more alarming. According to Gallup, such workers cost the world $8.8 trillion in lost productivity, which is equal to 9% of the global gross domestic product.
These numbers are shocking not only as indicators of revenue loss, but also as proof of how much of a company's topline depends on the contribution of a minority of high performers. Behavioural research, cited by consultancy firms like McKinsey & Co., claim that high performers are 400-800% more productive than their average peers, especially if they work in complex domains like information technology.
Any astute leader or manager would like to go the extra mile to retain stellar employees, but high-performing talent is not easy to spot. Often, they are the ones that make the least fuss when their manager over-delegates them. They will pick up slack for a colleague without much ado. Most of them are unlikely to talk to their manager even when they feel misaligned with the work assigned to them or demotivated by their role. As ace performers, they are trained in the art of self-restraint, keeping their heads down, and completing the task at hand.
This hypothesis has been validated by research. As behavioural expert Diane Hamilton writes in a recent feature in Forbes: 'Unlike disengaged employees who may openly vent their frustrations, high performers tend to keep going until they no longer can. They often internalize stress, mask dissatisfaction with productivity, and remain outwardly professional until the day they resign."
Act of Courage
When a top talent leaves the system, an organisation suffers losses at multiple levels: not only financially, but also in terms of losing out on expert knowledge and a 'can-do' attitude. A high-performer's exit can erode the morale of colleagues, especially those who looked up to them, which may lead to even more attrition of talent and start a domino effect.
As Bhaia's example shows, it takes more than cosmetic tweaks to improve the health of your company. True leadership lies in your ability to see the toxic behaviours hiding in plain sight and then have the courage to root them out for good—even if it means getting rid of a CXO-level hire you've made at a steep cost.
Instead of coming up with reactive strategies to stop your best talent from leaving, it is key to have more proactive check-ins, listen to what they are not saying, and notice more than what meets the eye. Don't be blindsided by the person who has most to say during meetings. Hold space for the troopers and workhorses, who keep the home fires burning.
Work Vibes is a fortnightly column on ideas to help you thrive at what you do.