In the last five years, unemployment has almost been cut in half. With more opportunity, employees are less concerned about leaving their current job to try something new. As you know, this turnover creates the burden of filling the vacant position, current staff being overworked, and can lead to low workplace morale (as well as an inability to properly serve your clients).
According to the U.S. Bureau of Labor Statistics, 91 percent of Millennials expect to stay in the same job for less than three years, and the average employee tenure is about 4.4 years. The financial impact of excessive employee turnover alone can force an organization to close its doors, and has many employers wondering how they can improve retention through effective hiring processes.
Here are five ways to hire more loyal employees and reduce turnover:
- Assess the cultural fit of the job candidate.
Maintaining cultural consistency within your company is a crucial factor in the productivity and satisfaction of your employees. A recent research studyshowed that 46 percent of small-business new hires failed within 18 months, and a whopping 89 percent of that failure was directly related to poor cultural fit within the company. Using pre-hire employee assessments can offer valuable insight as to how a candidate’s personality fits with the culture of your business and workplace environment, as well as the demand of the job.
- Consider a trial period.
Trial periods allow the new hire and company to mutually assess their compatibility without an obligation. A trial or probationary period can greatly increase the loyalty of your new hires and reduce turnover, as demonstrated by the fundraising company Engage Direct Mail, who implement a trial period of 90 days in their hiring process. On average, Engage experiences 77 percent retention during the trial, which turns into about 95 percent retention after the three-month probationary period. Trials can be compared to dating – both sides share their expectations, values, and dreams. If they are in agreement, what’s to stop them from succeeding in the long-term? The key to probation periods is that they reveal any unknown factors to both the candidate and the employer.
- Offer flexibility.
Flexibility within a company allows employees to feel valued and shows them their needs are recognized and respected. How important is flexibility to job seekers? In a study, nearly 75 percent of American adults surveyed said flexibility is one of the most important factors in their job search, and 39 percent have already left a job or have considered leaving due to issues with flexibility. Work-life balance within an organization is always a major consideration for job prospects, so offering flextime and other accommodations for workers’ personal lives is an important factor in competitively attracting, hiring and retaining top talent.
- Use employee referrals.
According to research from Jobvite, HR executives rated referrals the number one source of quality candidates, and also generate 39.9 percentof all hires. Employees hired on referral are also proven to be more loyal as 46 percent of referred employees stay 3 years or more, compared to only 14 percent of hires from job boards. Referrals not only reduce turnover and recruiting efforts, but also empower employees by allowing them to have input in the hiring processes of their company.
- Implement an onboarding program.
Small businesses know a lot about protecting their investments, which is why on-boarding isn’t only for medium to large size organizations. The action steps may be different, but the value is certainly as key in preventing turnover. Companies who implement an effective onboarding program during the first three months of new-hire employment experience 31 percent less turnover than those who don’t, according to the Aberdeen Group. Onboarding is important because it introduces the employee to the company’s culture and expectations, and gives the employee vital training and information needed to succeed in their new position. A new hire’s company compatibility will likely be determined during the onboarding process, which can save the employer from prolonged investment in the wrong employee.
If turnover could cause a significant impact on your ability to deliver service to your clients, try implementing just one or two of the above steps before your next hire. Giving a little forethought to retaining your employees prior to bringing them in to your business can save you significant time and expense in the future!
Linda serves as a Principal in MCM’s HR Consulting practice, and has experience working with various-sized companies throughout a variety of industries. Linda’s experience in organizational development, training, executive coaching and hiring assistance spans over 25 years. Previously, Linda was the President and Owner of Personnel Profiling, Inc., an HR consulting company that offered a suite of employment assessments and services to help companies gain a competitive advantage by hiring, retaining and developing great talent. Linda’s formal education includes a Master’s Degree in Education from the University of Louisville with a concentration in counseling psychology. Linda and members of her team will be ongoing contributors to the Academy Blog.
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- Time Magazine’s Cover Story—“How High is Your XQ?” - July 6, 2015
- 5 Proven Strategies to Reduce Turnover - May 29, 2015
- Become an Awesome Boss - April 24, 2015