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What is a Revolving Door?

By Shannon Kietzman
Updated Feb 19, 2024
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The "revolving door" theory refers to the ongoing turnover of employees in the business world. Employees are hired to perform certain tasks and, due to a variety of reasons, become dissatisfied and seek out jobs with other companies that have more appealing benefits. Sometimes, the individual simply wants more money, more appreciation, or a better working environment. In the political context, the "revolving door" refers to the practice of elected government employees leaving public service to work in the private sector, often causing a conflict of interest with their prior role.

With the sluggish economy of recent years, many employers do not feel the need to worry about the revolving door. When unemployment is high, dissatisfied employees are less likely to seek out a new job. With the economy improving, however, those employers who are not concerned will be adversely affected as employees seek more satisfying employment.

When an employee quits a job, turnover can cost a business 25% to 150% of the employee's salary. Companies can conduct a cost analysis to gain a better sense of the revolving door cost to their business. Turnover costs come from four main areas: transition, lack of productivity, hiring the new employee, and training the new employee. Human resource advisers and management consultants have noted that many employers do not have an accurate understanding of the potential cost of turnover or of their contribution to this phenomenon.

Transition expenses caused by the revolving door include exit interviews, pay separation, and benefit costs. The company also suffers from a lack of productivity until the job is filled and may need to divide responsibilities among other employees until someone is hired. This often causes other employees to become burnt out when too much work is expected of them. This can escalate the revolving door if these workers also seek more satisfying employment. To prevent this from occurring, employers can survey the workers' job satisfaction at least once per year, promote communication in order to improve employee circumstances, and ensure that employees are aware of the responsibilities expected from their positions.

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Discussion Comments
By GreenWeaver — On Mar 19, 2011

"@Subway" - I think that companies that take the time to develop benefits like this will never have to worry about turnover.

By contrast, I also feel that companies in which there is little balance between work and an employee’s personal life also contribute to the high employee turnover.

A person can only work so many 80 to 100 hour work weeks before they start to feel burnt out. The burnt out feelings can also lead to depression and turnover because most people cannot sustain this type of work schedule especially if they have a family.

Also the constant work schedule does not allow you enough of a break to actually appreciate the job. Companies that are serious about changing their revolving door need to take this into consideration when they structure a job.

I know that in difficult economic times employees are more willing to their job regardless if they are happy or not but sooner or later that employee will leave to find a better opportunity which is why good employee relations are essential to reduce turnover.

By subway11 — On Mar 17, 2011

"@Cupcake15" - I know that many companies try to offer benefits that will enhance their employee’s quality of life. They may offer an onsite gym or child care center and provide additional vacation time based on the length of service with the company.

Some companies offer flexible schedules in order to accommodate employees so that they will not leave the organization. For example, Baptist Hospital in Miami allows working mothers the opportunity to take the summers off in order to care for their children and they will be able to resume their position in the fall when their children return to school.

Sometimes the flexible benefits like this are worth more than additional money because you cannot place a price on piece of mind. These types of companies tend to have very low employee turnover and no revolving door to speak of.

By cupcake15 — On Mar 14, 2011

"@Moldova" - I wanted to say that I also think that many companies offer benefits based on the length of service. Some companies even offer employee pensions in order to keep employees happy and in their positions until retirement.

Other companies offer discounted stock purchase plans and vesting schedules based on a certain length of service. Employers figure that the employee would not want to lose these valuable benefits and will stay on at least until they are vested.

I know that some companies offer personal time off and even allow employees to pursue volunteer projects while maintaining their jobs. For example, UPS offers a two month sabbatical for members of management that would like to pursue volunteer projects. While the leave is unpaid, the manager’s position is held for them until they return.

By Moldova — On Mar 11, 2011

I think that revolving doors also hurt companies but they also hurt employee morale as well. If employees feel so stressed and pressured with the work that they constantly seek employment elsewhere it is really telling of the company.

This also hurts employee morale because they wonder what happened to the person that left and instead of worrying about performing their own job well they tend to gossip about what happened.

This is why some companies are offering free hotlines in which employees can discuss issues that may or may not be work related to an objective third party anonymously.

When I used to work for Mervyn’s they used to have a program like this for its employees in order to reduce employee turnover.

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