Hiring the right people from the start is the single best way to reduce employee turnover. How can hiring managers be sure that their new employee will meet expectations? What happens if they don’t?
Counting the cost of high staff turnover
The wrong person is hired for two out of five roles. This figure alone sounds shocking, but when factoring in that hiring the wrong employee can cost over three times that employee’s salary, the magnitude of the problem starts to really hit home. Calculating the true cost of high staff turnover can be daunting, but The Center for Economic and Policy Research has developed a calculator which analyses more in-depth information than many other free examples.
Financially, consistently missing the hiring mark could prove disastrous for any business, but looking deeper reveals more insidious outcomes from high staff turnover. Staff morale also suffers, which can in itself lead to higher turnover. The need for experienced staff to take on extra responsibilities as a new hire gets up to speed, the insecurity created when an employee leaves, and the potential loss of confidence in management teams all result in lowered morale, which can often lead to lower productivity.
Disruption caused by a revolving door of staff being hired and leaving means that customer service and service quality is likely to deteriorate, however briefly. This has a knock-on effect on customer satisfaction; it only takes one bad experience for a customer’s loyalty to move to a competitor. Depending on the business or industry of the organisation, it may be challenging to replace skilled workers, and the resulting loss in productivity will naturally decrease company performance.
High staff turnover doesn’t only impact on the people who currently work for your company – potential future employees can be enticed or put off by what they hear about your organisation’s staff turnover. One negative tweet from a disgruntled former employee about the hiring practices of your company can be enough for any candidate to think twice about applying for one of your roles, and top talent knows that they can expect better in a candidate-led, competitive talent market. While it’s impossible to keep every employee happy 100% of the time, online review sites such as Glass Door make it easy for candidates to see patterns emerging about what an employer is really like, and to draw their own conclusions about why staff turnover is high or low.
Improving Quality of Hire to lower staff turnover
It’s a no-brainer; hiring right first time leads to fewer staff leaving or being replaced. But isn’t it impossible for hiring managers and recruiters to ensure source and hire the correct candidates each and every time? Not if you’re measuring Quality of Hire.
As a ‘big picture’ metric, Quality of Hire takes into account other factors, such as the performance of new employees, retention rates, the quality of the hiring process, cultural fit and the calibre of candidates entering the recruitment pipeline. At present, organisations are using multiple tools and functions to measure these different aspects of recruitment, but this results in lost data, inconsistencies, and mistranslation of data between platforms. A recent survey showed that bringing ‘everything under one roof’ via a dashboard tool would be optimal – integrated technology and better data quality was said to be crucial by 75% of respondents.
Empowering hiring managers and recruiters to identify any bottlenecks in the recruitment process means that every hire can start off from a level playing field. Quality of Hire can then be established by measuring pre-hire expectations against post-hire performance, clearly showing how effective the hire was. Patterns will then emerge over the type of employee who thrives within an organisation. The survey respondents felt that being able to produce detailed and comprehensive data which shows why turnover rates are low or high means that they can have data-driven conversations with stakeholders from across the business in an effort to keep staff turnover consistently within target.
If you’d like to know more about how measuring Quality of Hire can help your organisation, request your free demo of Talenytics now.
Content Marketing Specialist
Gianna is a copywriter with degrees in English and Marketing. She is passionate about the ever-evolving world of technology, and uses her skills to research the latest industry trends and insights.