As human resources grows its strategic presence within today’s companies, key performance indicators (KPIs) are becoming a big factor in determining how HR is actually performing.
Hiring, in some ways, is actually simpler to evaluate because it is very similar to sales: You either have positive outcomes or you don’t.
One of the biggest indicators for HR success is employee retention. Companies spend hours hiring, training and coaching people into becoming fully trained employees; when someone leaves within the first 90 days, all of that time, money and effort is wasted.
Why employees leave
Research has revealed that staff members normally leave for one of four reasons, each of which has several implications for an organization.
Some staff members leave due to dissatisfaction and grievances that go unaddressed. Others leave because they came across a better alternative. Some employees quit because they had planned to for some time. For instance, they might leave to start a family, launch a business or go back to school full-time.
And finally, some people make a snap judgment to leave a job because of a specific action, such as being passed over for a promotion or disciplinary action from a supervisor.
The costs of low employee retention
First and foremost, turnover interferes with the flow of an efficient workforce. When a worker leaves there can be a noteworthy knowledge gap left, making more work as the rest of the staff members pick up the pieces.
Hiring and training a new worker requires for time and money. Every time a company replaces a salaried worker, it costs between 6 and 9 months in salary to replace him or her. For a manager making $40,000 annually, that’s $20,000 to $30,000 in hiring and training expenses, as well as other intangible costs.
While some turnover is unavoidable, a company can mitigate turnover and associated costs through an employee retention strategy.
Steps to boost retention
Recent research has shown employees that stick with a new employer for more than a few months are considerably more likely to stick around for many more years. HR professionals are taking note and putting a greater emphasis on employee retention efforts, with a big emphasis on this early vulnerable period.
The effort to retain new employees actually starts before they even walk in for their first day. Hiring personnel must present an accurate depiction of the open position in order for potentially bad hires to opt out of the process. If candidates are given a rose-tinted view of the job, they’ll be in for a rude awakening once they get into the position.
Manager engagement in the hiring process is also critical to retaining newer employees. Direct supervisors should develop insightful interview questions and actually lead the selection process, since they should have the best sense about the type of person who will succeed in the job.
Furthermore, potential co-workers should be brought into the interview process to help determine the potential cultural fit of each candidate.
At NSC, we work with our clients to address all manner of staffing needs. Contact our team of experts today!