What Does Losing a High Performer Actually Cost Your Organization?
When a top performer starts underperforming, most managers hope the problem will fix itself. It rarely does. What looks like a temporary slump can quietly become the beginning of a departure — or a longer-term issue that pulls the rest of the team down with it. Catching it early and responding the right way is one of the most valuable skills any manager can develop. According to Gallup, replacing a high-performing employee costs between 50 and 200 percent of their annual salary when you factor in recruiting, training, lost productivity, and the institutional knowledge that leaves with them. That number makes the cost of ignoring a performance drop much clearer than most managers realize.
Why Do Top Performers Start Underperforming?
A drop in performance from a previously strong employee almost always has a reason. Top performers do not coast without cause. The feeling unchallenged or passed over for a promotion, a disconnect with new leadership, personal circumstances affecting their focus, or the early stages of a job search. According to Gallup, only 33 percent of US employees are actively engaged at work. High performers are not immune to disengagement, especially when they feel unrecognized or underutilized. That disengagement is usually visible before it becomes a performance issue, but many managers miss the early signals.
What Should You Do First When You Notice the Change?
Do not ignore it and do not overreact. The right first step is a private, direct conversation. Not a formal review, not a written warning — just a conversation. Tell them you noticed a change and wanted to check in. Ask how they are doing, whether they feel supported, and whether anything about their role is not working. Most strong performers will not volunteer this information unless someone asks. When you do ask, be ready to listen without becoming defensive. The answer may be something you can fix — a change in responsibilities, more visibility, a clearer growth path. It may also be something you cannot fix, in which case knowing that early is still valuable.
How Do You Have the Conversation Without Making It Worse?
The goal of the first conversation is not to put the employee on notice. It is to show them they are seen and that their performance matters to you and to the organization. Framing makes all the difference. Something like: “I value what you bring to this team, and I have noticed things have felt different lately. I want to understand what is going on and see if there is anything we can do differently.” That opens a conversation. A performance warning at this stage closes one. According to Harvard Business Review, managers who approach performance drops with curiosity rather than criticism are significantly more likely to retain the employee and see a recovery over time. Movement Search and Delivery, a Forbes-recognized executive search firm with eight offices across the United States, advises employers on talent retention as part of every search engagement. One of the patterns our team sees consistently is that companies lose top performers not because the person wanted to leave, but because no one asked what they needed before it was too late.
When Is It Time to Accept That They Are Leaving?
If the conversation has happened, the manager has responded, and performance has not improved after a reasonable window of time, it may be time to plan for the transition. This does not mean waiting for the resignation letter. It means beginning to think about who could step into the role, whether internally or through a new search. The worst outcome for any organization is being caught completely off guard when a key person walks out. The best outcome is having a plan ready so that the departure, if it comes, does not create a crisis. A top performer underperforming is almost always a leadership opportunity before it becomes a hiring problem. Respond to it early, respond to it honestly, and you will retain more of the people your team cannot afford to lose. If you are facing an unexpected vacancy or want to build a stronger talent pipeline before one opens, contact Movement Search and Delivery today.