Attrition is inevitable – but rather than bow to it, successful companies manage it as part of their ongoing business strategy.
Losing an employee equates to a loss of the investment made to hire, train and develop that person. Tag on lost productivity, lower morale and possible reputation damage and the total impact can be devastating.
The Cost of a Bad Hire
A hiring failure can cost an organization from $25,000 to $2.5 million or more. For example:
- A second-level manager earning $62,000 a year costs their employer $840,000 in total damages. This encompasses hiring expenses, compensation, the cost of maintaining an employee, severance, and missed business opportunities.
- Losing a sales representative can cost up to $1,000,000. While this may sound shockingly high at first, it includes lost clients who move with their rep, lower morale resulting from the termination, and negative word-of-mouth, which creates the perception of a problem within an organization. Onboarding new reps is costly and requires a ramp-up time of about six months. During this transition, others – including managers – must pick up the slack and keep business running smoothly.
The right hiring decision is critical in how effectively employees contribute to business results. So be ready even before you have an opening, and when the time comes, take steps to make the right match – in terms of both skill set and cultural compatibility.
- Know your needs. Your recruitment strategy should be an instrumental part of your workforce development plan. Keep your organizational chart and job descriptions current and regularly evaluate your staffing needs. In some instances, you can promote from within. Or, you may need to outsource temporarily or launch a hiring campaign.
- Maintain effective talent sources. Keep in touch with university placement offices. Stay active with professional associations and in touch with those in your business network. Seek out passive candidates and develop relationships with them, so you can immediately reach out to them when the time is right.
- Develop an attractive employment brand. Nothing is more powerful than word of mouth when it comes to your reputation. Collaborate with your current employees to continuously improve their working conditions and environment. When they talk to others outside of work or on their social networks, ensure that their message is a positive one.
- Interview with retention in mind. Look carefully at a candidate’s past history of job turnovers. Make every effort to accurately describe the position. Listen to ensure that an applicant’s goals and values align with those of your organization.
- Make a competitive offer. Show your prospective hire that your organization rewards talent, loyalty and longevity. Highlight your commitment to helping them grow in their careers and balance work with their personal lives. And be sure your compensation package is at or slightly better than the current market rate.
- Onboard and orient effectively. Be sure the entire team is prepared to welcome and support your new hire. Be highly accessible during their onboarding period. Consider assigning a mentor to acclimate the employee not only in terms of job requirements, but also on the lingo, culture and “feel” of their new company.
To learn more about effective retention management and access our national network of top talent, contact the expert recruiting team at the Select Group, Inc. today.