Although your business may be profitable, that doesn’t mean you can ignore other underlying workplace issues that could be causing serious damage to your organisation. Just how much does it really cost to replace, train, and onboard employees in your company?
Many managers shy away from this calculation or leave it to the last minute. However, it’s not as difficult as it may seem. Simply take the annual salary of a job for which you have excessive turnover, add 30 percent for benefits, and calculate 25 percent of the total. That is the absolute minimum cost incurred to the company every time that a single position is turned over. If you really want a shocking number, multiply it by the amount of times that position has turned over, and do this for every job where there is turnover. Shocked? Don’t forget the other costs incurred with onboarding new employees and hiring (fees, travel, advertising, training, etc.).
If you are experiencing high staff turnover, or your new hires are not fitting well with your organization and its values, follow these five steps to ensure smart hiring processes and get the most out of your people.
1. Identify hiring problems. Discover what parts of your organization are having problems, and why. You can do this by:
• Asking your HR and department heads for their opinions. “Why are people quitting? Why have they become problematic? Why are they being fired?”
• Making sure each department and/or HR carries out exit interviews. Ask people who leave why they are leaving, and what you could have done to help them succeed. Do not be fooled by the typical “pay me more money” answer. Many employees are motivated without money.
• Asking your top performers and higher-level positions what they like about their jobs, and what you could improve on. Then, focus on what they like and replicate it throughout the organization.
• Evaluating the managers responsible for hiring. Ask them first (and then yourself): “Do they need training? Does their system work? Do they take their jobs seriously?”
2. Recruit people who match specific positions.
• First, you must be able to understand and outline a competency-based job description. How can you expect people to fit jobs if you don’t know what you want, and what is to be expected of them? Make sure to document all competencies required by all jobs in your company on the basis of technical, educational, experiential, and industrial know-how.
• This information is not accessible from traditional job interviews or background checks.
Assessments provide the tools necessary to analyse these attributes.
3. Be innovative when you prospect for new candidates.
• Offer employees bonus referrals for candidates hired.
• Look for companies that have announced cutbacks.
• Set up educational relationships. Find universities, colleges, or schools that support your industry and develop relationships with them.
• Use assessments with current employees to outline potential promotions for higher positions.
4. Prepare for a winning interview.
• Review the job requirements in your mind before the interview. Develop leading questions based on the job description that will lead to follow-up questions.
• The introduction: Interviews can be a stressful situation for all parties involved. Make sure to explain the order of the interview, including how long it will be, and what you will cover.
• The body: While asking questions, think to yourself (and take notes): “Can this person do this job, and will this person do this job?”
• The close: This stage is just as important as the previous two. Make sure to summarise with the candidate and outline the next steps. We recommend Lou Adler’s book, “Hire with Your Head,” where he outlines a very suitable closing: “Although we’re seeing other great candidates, I personally think that you have a very fine background. We’ll get back to you in a few days, but what are your thoughts about this new position?”
5. Continually refine your best hiring practices.
• Ensure that you are always working to conduct the best practices for hiring in your organization. Books like Adler’s, plus workshops and seminars, prove to be extremely beneficial.
• People are your most important asset. Shouldn’t you invest at least as much effort into attracting, recruiting, and retaining them as you invest in winning and retaining customers? Without great employees, there would be no loyal and satisfied customers!
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