How Balancing Skills and Mindsets Can Reduce Employee Turnover

LMSPortals
Jul 5
5 min read

Employee turnover is one of the biggest headaches for organizations. It costs time, money, and momentum. Companies scramble to fill gaps, teams strain under extra workloads, and institutional knowledge walks out the door. Many employers focus on surface-level fixes — better pay, perks, or quick training initiatives. But lasting retention comes from a deeper alignment: balancing the skills employees bring (and develop) with the mindsets they hold.

This article breaks down why both matter, how they work together, and practical ways leaders can nurture the right mix to keep people engaged and committed.

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The True Cost of Turnover

Turnover isn't just about recruiting expenses or severance packages. Consider what organizations actually lose when employees leave:

Productivity hits: New hires often take months to get fully up to speed.
Morale damage: Remaining staff can feel overburdened or wonder why colleagues keep leaving.
Customer impacts: Relationships get disrupted, service levels may slip.
Knowledge drain: Departing employees take unique know-how that’s hard to replace.

According to Gallup, replacing an employee typically costs between 50% and 200% of their annual salary, depending on the role. For high-skill positions, that figure soars even higher.

All of this makes investing in retention critical. Yet many companies misjudge what actually keeps employees around.

The Missing Link: It’s Not Just About Skills

When companies hire or develop talent, they usually zero in on hard and soft skills:

Hard skills: Technical abilities, certifications, industry-specific expertise.
Soft skills: Communication, teamwork, time management.

These are undeniably important. But focusing only on skills ignores a powerful factor: mindset.

Mindsets drive how employees see challenges, feedback, collaboration, and their own growth. Without the right mindset, even highly skilled employees can become disengaged, frustrated, or resistant to change. That’s often the seed of turnover.

What Do We Mean by “Mindset”?

Mindset isn’t a fluffy buzzword. It’s the collection of attitudes, beliefs, and assumptions that shape how people think and behave at work.

Common mindsets that influence retention include:

Growth vs. fixed: Do employees see abilities as improvable, or set in stone?
Ownership vs. passivity: Do they feel accountable and proactive, or detached?
Collaborative vs. siloed: Do they thrive on teamwork, or prefer solo contributions?
Optimistic vs. cynical: How do they interpret setbacks or ambiguity?

Someone with a growth, ownership-driven mindset is more likely to adapt, learn, and engage through ups and downs. Someone with a fixed or defensive mindset may disengage faster when work gets hard.

Why Balancing Skills and Mindsets Matters for Retention

If an employee has great skills but a poor mindset fit, they may become toxic, resistant to feedback, or quick to jump ship. On the flip side, someone with a terrific mindset but lacking critical skills can become frustrated or overextended, ultimately leading to burnout.

High-retention teams have both:

Skills that meet current and future needs.
Mindsets aligned with the company’s culture, goals, and approach.

When these align, employees:

Feel more connected to their work and colleagues.
See clear pathways to growth.
Trust that their effort matters.
Are more likely to stay through challenges.

How to Build and Balance Skills and Mindsets

1. Rethink Hiring: Screen for Mindsets, Not Just Resumes

Traditional hiring often stops at a checklist of experiences and technical know-how. But smart companies also look for mindset clues. That means asking:

Behavioral questions: “Tell me about a time you failed — what did you learn?”
Adaptability probes: “How do you handle last-minute changes or unclear instructions?”
Values exploration: “What kind of team culture helps you do your best work?”

Look for evidence of growth, resilience, and ownership. These are often better predictors of long-term retention than any degree or tool certification.

2. Train Mindsets Alongside Skills

Most employee development focuses on workshops or technical upskilling. While these matter, companies often neglect mindset training.

Ways to cultivate mindsets:

Mentorship programs: Pair newer employees with veterans who model adaptive thinking and collaboration.
Growth mindset sessions: Teach teams how to reframe mistakes as learning, not personal failures.
Regular reflection: Create space in meetings to discuss what’s working, what isn’t, and what people are learning.

By normalizing vulnerability, curiosity, and ownership, organizations build mindsets that keep employees engaged.

3. Give People Pathways to Stretch Both

Retention drops when employees feel stuck. Talented people want to grow their skills and expand how they think and solve problems.

Offer cross-training or short rotations into other departments.
Design stretch projects that require employees to lead in new ways.
Encourage lateral moves that build breadth, not just upward promotions.

This fosters both competence (skills) and confidence (mindset), making employees more likely to envision a future with the company.

4. Align Recognition With Both Dimensions

Many organizations celebrate skill milestones: closing a deal, finishing a certification, hitting quarterly metrics. Those are important, but also recognize mindset-driven behaviors:

Stepping up to solve a team conflict.
Sharing lessons learned from a failed experiment.
Helping others navigate change.

This signals that how people approach work — not just the output — matters to the company. It reinforces the right attitudes and makes employees feel seen.

5. Build Psychological Safety

No amount of skills or mindset development sticks if employees fear ridicule, punishment, or petty politics. Psychological safety — knowing it’s okay to ask questions, admit mistakes, or propose ideas — underpins everything.

Leaders should model humility: “I don’t know the answer. Let’s figure it out.”
Teams can adopt rituals like learning reviews after projects (what surprised us? what do we change next time?).
Encourage honest feedback in all directions.

When employees feel safe, they invest more of themselves in the work and stay longer.

The Role of Leaders: Champions of Both

Managers play the biggest role in reducing turnover. Gallup found that 70% of the variance in employee engagement ties back to managers. Great managers balance coaching for performance (skills) with coaching for mindset (confidence, resilience, ownership).

Practical steps for leaders:

Have regular one-on-ones that explore both goals and mindsets.
Give feedback on how work is done, not just what gets done.
Share their own learning journeys — including stumbles.

This fosters loyalty and reduces the likelihood employees will look elsewhere for meaningful growth.

The Bottom Line: Better Balance, Better Retention

Too many companies chase the latest retention perk — a ping pong table, more snacks, unlimited PTO. But without balancing skill development and mindset alignment, these perks are surface-level fixes.

Employees stay when they feel:

Capable: Their skills are growing to meet meaningful challenges.
Confident and curious: Their mindset supports taking initiative and learning.
Connected: Their way of working fits the culture and is valued by leaders and peers.

When companies intentionally nurture both dimensions, turnover drops, teams thrive, and organizations build a more resilient foundation for the future.

Final Thought: Make It a Strategy, Not a Slogan

Talk is cheap. Putting posters about “growth mindset” in the break room won’t change much if promotions still only reward technical wins, or if mistakes get quietly punished.

Organizations that successfully reduce turnover bake skill and mindset balance into hiring, training, feedback, and daily conversations. They make it a strategic priority, measured and reinforced over time.

When you get this right, employees don’t just stay — they grow, adapt, and help carry the business forward. That’s the ultimate win for everyone.

About LMS Portals

At LMS Portals, we provide our clients and partners with a mobile-responsive, SaaS-based, multi-tenant learning management system that allows you to launch a dedicated training environment (a portal) for each of your unique audiences.

The system includes built-in, SCORM-compliant rapid course development software that provides a drag and drop engine to enable most anyone to build engaging courses quickly and easily.

We also offer a complete library of ready-made courses, covering most every aspect of corporate training and employee development.

If you choose to, you can create Learning Paths to deliver courses in a logical progression and add structure to your training program. The system also supports Virtual Instructor-Led Training (VILT) and provides tools for social learning.

Together, these features make LMS Portals the ideal SaaS-based eLearning platform for our clients and our Reseller partners.