No matter how well an organization’s leader knows the principles of supply, demand, logistics, sales and other key business skills, the success of a company almost always will hinge on strategies used to recruit and retain employees.
Employee turnover rate is an important metric for many reasons.
For one thing, it costs money to hire and train new employees – a recent survey published on jobs website CareerBuilder found the average cost of a bad hire in 2017 was $14,900. In addition to monetary costs, a firm or company rarely can withstand the loss of institutional knowledge that comes with a high employee turnover rate.
Companies rely on experienced, loyal, core employees to establish the organization’s culture and to build on past successes. A constant focus on training new workers can be a major mental drain for a manager, and a caravan of departing employees can hurt morale.
One way to avoid those detrimental effects is to develop a reliable strategy to recruit the best possible employees and, once they are hired, to retain them. While employee recruitment and employee retention demand different approaches, they are related.
How Recruitment and Retention are Related
Effective employee retention begins with the first contact between a potential new hire and the company. First impressions matter in the short-term and throughout the worker-employer relationship.
The initial impression of a company can be shaped by:
- Word of mouth reputation within the industry
- Presence and manner of engagement on social media channels such as LinkedIn, Twitter, Facebook and Instagram
- Employee reviews on sites such as Glassdoor
- Wording of a job posting on an internet board such as Indeed, Monster or LinkedIn
- Relationships with job placement services, executive search firms and university career counseling departments
Managers responsible for hiring new employees must be mindful of these and other reputation-making factors. Another important matter: Even if the above factors are settled to the company’s advantage, one poorly worded email or failure to respond to a job candidate in a timely manner could derail the recruitment process.
In addition to making sure that the potential employee comes away with the desired first impression, managers must be sure that the candidate is, in fact, qualified to fill the job opening and a good fit for the company culture.
Hiring managers that establish effective strategies to identify qualified candidates who can seamlessly join current team members during recruitment are ahead in the employee retention game. While there is no 100% guarantee that any given recruit will become a long-term productive employee, sound evaluation techniques during the interview process can go a long way toward improving the odds.
Finding the Right Job Candidates
The world’s CEOs spend a lot of time thinking about the workforce. According to the 2017 Price Waterhouse Coopers CEO Survey, CEOs believe that “the most effective employees are those who are agile, curious and have the ability to collaborate with others to achieve the greatest results.” The survey also says that 77% of CEOS see the availability of key skills as the biggest threat to their businesses.
CEOs also acknowledge in the survey that job candidates who can perform tasks suited more to humans than machines are the most difficult to find and recruit. These are the skills more than 50% of U.S. CEOS surveyed identified as “very” important, and difficult to fill through automation:
- Problem solving
- Creativity and innovation
- STEM skills
In order to find employees who are capable of spearheading innovation and growth as well as committed to sticking around, hiring managers need to know where to look. According to a 2017 article shared by recruiting firm Robert Half, the places to find qualified applicants for job openings include:
- Online job boards – It does not always pay to rely solely on Monster, Indeed, LinkedIn and other major job sites, because the candidate pool not only is deep, it is potentially polluted with marginal applicants. Still, with millions of job seekers turning first to the tried-and-true method of job discovery, most organizations need to take advantage of the low-cost, potentially high-reward and well-known sites. If you must use these sites, be sure to take advantage of the filtering and term search features.
- Industry-specific job boards – These might include trade magazines or conference-affiliated websites that allow companies to post job openings. The candidates who are likely to use these job search tools might be a better fit, but they also could cost more because they are likely more experienced and familiar with the ins and outs of the job market.
- Employee referrals – Current employees know what it takes to work at the organization, and are likely to have friends or professional acquaintances who could be a good fit. Employee referral programs, through which workers are compensated for successful referrals of new hires, are valuable retention tools at some firms.
- Networking – People you meet at conferences, former co-workers, former classmates and others who have crossed your professional path over the years are an excellent source of potential new employees. Let them know you’re looking, and you might be pleasantly surprised at who you’ll find. Nurture professional relationships with potential employees, even when you’re not actively recruiting, and you can build a ready-made pool of potential new hires.
- Recruitment agencies – One potentially effective method to find the right candidates is to engage a “headhunter,” or executive search firm, to find a match or matches for specific positions.
Before beginning the search for the right employee, it is important to identify the characteristics and skills needed to fill an open position. A new job opening provides an excellent opportunity to re-evaluate the utility of a particular role, and re-shape it to more closely reflect the evolving needs of the company.
How to Keep the Best Employees
In 2017, it remained clear that as the job market continued its steady recovery after the Great Recession of 2007-08, workers were beginning to consider more career options. Rather than sticking with the relative security of a current position, a survey by recruiting firm Hays found that 81% of respondents would consider leaving their job for the right offer.
However, that same survey found that 71% of respondents would be willing to take a pay cut for their ideal job. In fact, the grand takeaway from the Hays survey was that U.S. workers are “willing to compromise on salary for the right benefits, company culture and career growth opportunities.”
Furthermore, a Gallup poll found that 51% of workers are looking to leave their current jobs.
With that knowledge in mind, senior managers who want to avoid paying thousands of dollars to hire and train a new employee can focus on worker retention by taking the following steps:
Know what employees like, and give it to them. According to Monster.com, one employer discovered that a key worker in the firm enjoyed driving fast in cars. So, that employer paid for a one-day training session and racetrack experience with a car company, and the employee made a brilliant memory that he associated with – and owed to – his place of employment.
If you treat your people like people, rather than like cogs in a machine, they will be more inclined toward loyalty.
Know what employees are worth, and pay them accordingly. According to corporate review site Glassdoor, workers receive an average pay raise of 5.2% when they change jobs. While better pay is down the list for reasons why employees leave, it remains a factor and should not be ignored as a tool to help retain the most valuable employees.
Give employees the work-life balance they crave. It’s never a good idea to ask an employee to choose between personal priorities and work. In the short term, it creates resentment. In the long term, it creates an unwanted job opening. Be generous with work-at-home days. Show employees you trust them to get their work done, and that trust will be rewarded with loyalty.
Communicate. This might be the most difficult action for senior managers to take, but it also could be the most critical. Employees who feel as if they are uninformed – or, worse, misinformed – about expectations will lose motivation and, eventually, look for work elsewhere. Meaningful feedback about job performance and a clear set of goals are important – it lets an employee know where he or she stands in the company, and provides a path for success.