A Unique Approach to Retention and Turnover: Limiting Employee Tenure


Some companies go to extraordinary lengths to stay ahead of employee turnover.

Zappos has a “pay to quit” policy that offers employees cash to walk away early if they feel the job’s not for them. Several restaurants have experimented with eliminating tips in exchange for higher wages to keep employees engaged.

But probably the most audacious turnover strategy belongs to DARPA, the famed Defense Advanced Research Project Agency of the U.S. Department of Defense.

Doing the impossible

DARPA has built its reputation on hiring the best and brightest of the country to work on seemingly impossible projects.

Founded in 1958 in response to the Russian launch of Sputnik, it has had a hand in everything from the Apollo moon landings to self-driving cars. It is perhaps most well-known for being the birthplace of the internet, which began its life as DARPANet, an internal government network.

Needless to say research jobs at DARPA are in high demand and attract extremely qualified candidates. But DARPA may be able to stay so innovative because they have a retention strategy that’s completely the opposite from your average organization – they limit tenure to a maximum of four to five years.

As such, DARPA has an extremely high 25 percent turnover rate, but it’s all by design. They see a huge downside to having long-tenured employees, as they are the ones who are most likely to point to past failures and say it can’t be done.

At DARPA, doing the impossible is what they live for, and recalcitrant attitudes are anathema to their mission. Even though government hiring is a long and sometimes excruciating process, they believe this strategy keeps them fresh and innovative, keeping a constant influx of new and forward-thinking talent rotating in.

Failing for good

DARPA researchers have “expiration dates” on their ID badges, so everyone knows how limited their time is. But it’s not a drag for anyone. In an environment like theirs, it tends to bring out the best in employees.

DARPA has no shortage of applicants, all of them well aware of the short tenures. But people apply to DARPA to be a part of the next big project that defines the world, not score a cushy government gig.

They also know that DARPA embraces failure as a natural process of innovation.  A CNN article reported on an employee who won their highest honor after a high-profile rocket project completely failed.

Limited tenures, rewards for failing; it seems that DARPA is breaking every rule in the turnover playbook, but to extraordinary results. By removing the hassle of worrying about tenure, they only get the employees who really want it.

The flip side of turnover

This approach to turnover is decidedly not for everyone, but the important takeaway is turning over employees every four to five years and injecting new blood into the system can actually be a good thing.

[Read More: Employee Headcount Report]

You certainly want some long-tenured employees to build up institutional knowledge and provide mentorship (as DARPA program directors do), but DARPA knows that solving the problems of the future takes new people with hungry minds unburdened by the processes and systems everyone else has grown used to.

It’s another interesting turnover experiment at the birthplace of experimental research in the U.S.

Editor’s note: Getting your leadership team to plan for necessary turnover is important, and Checkster can help with tools like the 360 Checkup, Reference Checkup, and Interview Checkup that help you streamline your hiring process -- as well as impact your bottom line.