Reducing Turnover Starts with Hiring Right
It’s hard to find two studies that agree on what it costs to lose an employee. Some say it’s anywhere between 20%-40% of that employee’s salary. Others say it’s between six and nine months of pay. Either way, it’s expensive. But how do you reduce turnover? One surefire way is to start by hiring employees who won’t quit.
Obviously, you can’t know with certainty whether someone will quit. These days, very few people take a job out of school and then stay there until retirement. However, just because the average length of tenure at a company has shortened over the years, doesn’t mean that you shouldn’t make hiring for fit a priority.
Too often, HR leaders can put on blinders when it comes to a resume. They become focused on keywords: does the candidate have the right job title or the right set of experiences? Hiring managers must spend less time checking off the list of keywords and more time focusing on fit. People who find a company that’s the right fit are happier—and happy employees are less likely to look for lateral moves to make up for boredom or distress or leave for incremental increases in salary.
Defining culture and hiring toward it
Clearly, if you aren’t familiar with your company’s culture, then culture is where you start. You don’t have to be an expert on every person and all of the departments and divisions, but you do need to be familiar enough with your office climate that you can make smart hiring decisions. To take your corporate temperature, ask yourself a few questions:
What phrases describe your company? Is your business fun and casual? Or is the environment a little more traditional and buttoned-down? Are employees encouraged to take risks and try new things, or are they more likely to play it safe? Being able to accurately describe the atmosphere of your company will help you better define fit for potential candidates.
How are decisions made? Take a look at the structure of your management.Is the decision process inclusive, or are only a small group of executives involved? Some people feel more comfortable when big decisions are made by others so that they can focus instead on accomplishing tasks. Others like to be involved in the decision-making process in order to have their opinions heard and considered.
What is team interaction like? Some offices are so team-oriented that people who work together all day long also leave for lunch together and socialize after work. Other teams prefer to limit their interaction to the tasks and projects required to get things done. Both environments can lead to great results—but it takes a certain type of person to thrive in either setting.
Ideally, you already have a good handle on your company’s culture, but, if you don’t, then this is a great place to start. And knowing the specifics of your company’s culture will help you formulate questions to ask potential candidates during early rounds of interviews so you can start finding those candidates that will likely fit into your company and stick around for the long term.