15 Apr
22 Nov
Most organisations do not know what their staff retention rates are. When asked they might say “pretty good” or "ok". The question should be how many of the people you hired in the last 12 months are still with the company?
If it is less than 95% you are doing something wrong in the hiring process.
An organisation may know what their retention rate is but they may not know how much it costs when a person leaves.
An independent study in the UK determined that it costs up to 3.5 times the annual salary when a poor hire leaves the company.
If firms knew this, you would think that they would spend more on getting it right, after all we are rational beings are we not.
The essence of the problem is that most organisations hire personnel in an unstructured way. Most hire on the basis of skills and experience but most people are fired based on attitude and personality.
If your hiring process does not evaluate your organisational values and requirements and match them to an individual’s profile then you have a very high likelihood of failure. People make decisions through unconscious biases. We assign attributes to people that don’t exist because, well, they went to the same school or know the same people or any number of other linkages – all of which have very little to do with the person’s capability of fitting into the role.
Finally admitting that the person you hired is not fitting in can take time.
It is quite possible to have a person in a role for 9 months before issues arise. This is compounded by the failure of managers and others to highlight this. People seem to make do until the issues become overwhelming or the person leaves of their own accord.
On one level, no one seems accountable for the original decision. People will argue he or she seemed the right person when they were hired but something went wrong.
Unfortunately, 9 times out of 10 what went wrong occurred at the selection stage. What we find is that many organisations do not have a formal process and people without training are required to make judgement calls without sufficient sold evidence and objectivity.
Is it any wonder that new research suggests that Algorithms have a better success rate than people in selecting candidates who will be successful in job?
It has been reported that if you select a person only based on the IQ score and a high level of conscientiousness you have a 60% chance of selecting successfully. This is much higher than the 50% success rate that represents industry in general.
If you are successful 70% of the time you are doing better than most. If those 3 failures were for positions that attracted $100K each in salaries, then it would cost your organisation over 1 million dollars in unnecessary costs.
It would be difficult to confront any CEO and make that admission and not be required to fix the issue.
Having the right process with the right tools and evaluating the roles and the people objectively can dramatically alter your success rate.
At CIS we have a 96% retention rate through our TalentConnect process. What’s more we guarantee the outcome to our customers. If the selected person leaves the organisation within the first year we will refund the fee and find a replacement free of charge. If you wish to save your organisation unnecessary costs and to de-risk the recruitment process talk to one of our consultants.
I guarantee you will not regret the outcome.