Recruiters, CHROs, company owners and even most employees know that recruitment and retention are correlated. You can’t discuss one without considering the other. For teams to succeed, organizations need to recruit the right people and be sure to hold onto them.
But research we conducted in 2018 shows that 47 percent of the most talented employees tend to change jobs every two years. That’s a struggle for existing employers but also for the next organization trying to match the skill set of the candidate — who has spent the past decade at four or five companies — to the role in question.
One strategy that can increase retention rates is to focus on improving recruitment strategies and the candidate experience. Indeed, 59 percent of CEOs and CHROs we interviewed underscore the importance of enhancing the internal and external candidate experience.
This post addresses why recruitment affects retention and how best to provide a bulletproof hiring plan.
The true cost of poor employee retention
Employee turnover is expensive. Estimates of the cost of losing an employee range from 33 percent to 200 percent of that person’s annual salary.
Training new recruits, paying for the talent search and onboarding process, and lost time between hires or when the new employee settles into the role all add up, explains Sheri Ferguson, founding partner of Accounting Solutions Partners, LLC.
“One of the most important things to understand about people is that they are an appreciating asset for your organization,” Ferguson says. The longer they stay, the more invested they become in the culture and their colleagues, and the more productive and indispensable they will be.
Ferguson highlights the importance of offering the right benefits and perks — and this isn’t just about salary. Consider offering, for example, flexible working, onsite daycare or excellent healthcare packages.
The recruitment package goes a long way to keep employees happy, but it’s not enough on its own. The entire organization’s culture needs to be transparent and inviting for all employees to communicate their wants, needs and concerns. Being able to speak openly and be themselves will be strong motivations to remain with an employer.
Realistic job previews during the recruitment stage
A primary goal for in the recruitment stage is to present the role as accurately as possible so there are no surprises for new hires. It’s about managing expectations, explains Jane Partridge, senior lecturer in human resource management at the University of Northampton in the UK. When reality matches expectations, new hires are more likely to stay with the company.
This is even more important at managerial levels, as employees who leave a company often cite poor managers as the reason. Ben Wigert and Ellyn Maese at Gallup suggest effective job previews for new managers might include immersive learning activities, engaging exemplary managers and even using virtual reality to provide a simulation of what they can expect in the role.
Employee retention strategies – make onboarding count
The right onboarding process can mean the difference between committed long-term employees and swift deserters. Within the first 90 days, organizations lose 16 to 17 percent of their new hires because of ineffective onboarding, writes, Roy Maurer talent acquisition editor at SHRM, citing a study by BambooHR.
Setting up a reliable and effective onboarding process is key. Onboarding should consist of relevant and purposeful training, regular feedback and check-ins, along with practical support for the new hire.
“Most companies confuse an orientation with an onboarding program,” consultant Heidi Lynne Kurter writes. “An orientation is a single event, typically lasting up to one week, with a focus on paperwork and compliance. An onboarding program is a process integrating the new employee into their role with training, support and expectations helping them to be successful in it.
“Harvard Business Review said it takes employees eight months to reach peak productivity, yet the average onboarding program lasts only three. The most successful programs last up to one year with frequent check-ins and feedback given throughout.”
This months- or year-long onboarding phase reduces attrition and helps new team members understand an organization’s subtle rules and processes.
Offer flexibility to increase talent retention
Employees want flexibility in where, when and how they work. It’s important, then, to provide this offering in the recruitment stage, says Anne Donovan, people experience leader at PwC.
The result is a significant boost in engagement and a key differentiator between your organization and your competitors. But flexibility needs to be for everyone if it is to succeed. It is no longer a drawcard simply to attract millennials or younger workers but should be a policy for all.
With that in mind, hiring managers should consider the tone and language of the flexible offering both during the recruitment stages and also for ongoing internal communications with employees, Donovan notes.
Employees who have children to care for and child-free employees with interests outside of work, for example, have equal right to flexible working.
Support your existing team
Employees need to know their interests are being considered. That’s a fundamental aspect of building trust.
It’s best to start building trust at the very beginning of a working relationship, during the recruitment stage. Doing so will pay dividends because employees who feel supported and trusted will be more committed.
There are many ways to build trust, but vital to the process is ensuring that leaders devote time to getting to know their new hires. Consider what these new employees want and need, how they work within a team, whether they need more support or greater autonomy.
Leaders who understand what makes their team members tick will be better able to match staff skills and dispositions with required tasks. The result will be a motivated team that applies their efforts to areas that will maximize outcomes.
High Retention Rates Might Not Mean What You Think
According to a 2019 report from the Bureau of Labor Statistics, quit rates in the U.S. were at 2.3 percent, numbering 3.4 million in June.
For the banking and finance (83.3 percent) and insurance industries (87.2 percent), their retention rates rank in the top three, after the utilities industry, Susan M. Heathfield at The Balance Careers writes. High retention rates are often aspirational and are a useful means — within a multi-pronged approach — of measuring employee satisfaction.
Another way to think about high retention rates, Heathfield theorizes, is that employees may feel stuck in a rut, unable to change their roles or employers. This may highlight broader economic issues, for example, that when rectified will see the best employees leave. Organizations can avoid this through better ongoing employee engagement and hiring from within.
Look inward when sourcing candidates
Retention matters because organizations want to keep their best people, and they want to benefit from their employees’ advancing expertise. The more deep knowledge an employee has of the company and the broader sector in which it operates, the better. That’s how you realize higher ROI for things like longer onboarding times, explains Brian Anderson, CMO at POPin.
These retained employees also make excellent candidates to train up for internal promotions, especially for positions that are nuanced and hard to fill. Anderson says retention strategies should blend people, technology and process to improve engagement and internal recruitment. This approach requires people skills such as active listening and provision of a culture that celebrates transparency and open dialogue.
Also helpful is for companies to use an internal pipeline system to flag strong performers likely to leave the company. Powered by AI, the tech provides accurate recommendations for promotions or role changes within the company that are most suited to the employee in question.
Finding the right talent and holding onto them is a challenge. When successful, the organization and candidate can grow together. Ensuring the recruitment phase is a positive experience for candidates — whether internal or external — will be a powerful means to keep great staff in the company.
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