How to Determine If Your Employee Turnover is Recruiting’s or HR’s Fault (And How to Fix It)
August 19, 2015
Retaining your employees is critical for any business. First off, replacing an employee is expensive – estimated to cost at least 20 percent of the person’s annual salary – and, more importantly, consistently losing strong employees is a surefire path to mediocrity.
Of course, most business leaders already know that. They want to know how to fix it.
Well, there are two possibilities for high turnover.
One is you’re hiring the wrong people, which means you need to make a change in the way you recruit talent.
The other is that you are hiring the right people but not doing a good job of keeping them, which means you need to change the way you manage your people.
So, before you can lower your company’s turnover rate, you need to identify what you change: do you need to hire better or do you need to treat your existing people better? Once the problem is identified, you can agree on a strategy to fix the problem.
High turnover is the recruiting team’s fault if…
High turnover is the fault of your recruiting if the main reason people are leaving your company is “the culture.” Or, if you are forced into firing people because they don’t have the skills to do the job.
This means you are hiring people who just aren’t a good fit for your company. If someone doesn’t fit in with your culture, nothing can overcome that. Or, if someone is just doesn’t have the ability to do the job, there’s not a lot of sense of keeping them around.
Companies that are consistently hiring the wrong people are apt to see:
- A low rate of short-term retention; i.e. people leaving the job within six months of taking it. This means the person is either unqualified for the job or the culture isn’t right for them at all.
- People leaving their jobs for lateral positions at other companies. If people are leaving your company for jobs of equal pay and status, it means they are eager to leave your company because they don’t fit in with your culture.
- A high termination rate, i.e. a lot of people getting fired. If firing is a common practice at your company, it means your recruiting team needs to do a better job of screening candidates.
The ways to fix your recruiting problems to increase retention are:
Okay, so you determine that most of your employees are leaving largely because you’re hiring the wrong type of people. The ways to fix that problem are:
- Ensure you are publicly broadcasting your culture to candidates, as opposed to what you think is popular. If you have a competitive, high-intense culture, for example; that’s fine. However, both your recruiting collateral and the conversations you have with candidates should reflect that, instead of marketing yourself as something else, so you attract the right people.
- Screen your candidates better. Science shows unstructured interviews are one of the worst ways of screening candidates, so stop “trusting your gut.” Instead, using a more structured, objective interview process should give you better results.
- Consider upping your requirements during hiring. Sure, this often means paying more for certain positions, but if you are targeting recent college graduates to do work that should be done by eight-year professionals, you’re setting yourself up to fail. Raising the requirements in your job postings (and, yes, raising the salary range as well) might wind up saving you a lot of money.
High turnover is human resources’ fault if…
High turnover is your human resources’ teams fault if people are leaving your company “for career progression” or “for a better opportunity.” It’s worth noting here that the most common reason professionals leave their job is for career progression, according to a recent LinkedIn survey of more than 10,000 people who just did.
Another indication your high turnover rate is a human resources issue is if people are leaving for reasons that don’t have anything to do with the work itself. For example, if you are consistently losing new parents, perhaps it’s time to look at your maternity and paternity benefits.
Companies that are not doing enough to keep their people are apt to see:
- Certain demographics of employees (new parents, older workers, people who go back to school, etc) leaving your company at higher rates than others.
- People consistently leaving for positions with more seniority, meaning you are putting a lot of time training people who will work for your competition.
- Workers generally becoming less engaged the longer they stay at your company.
The ways to fix your human resource problems are:
You’ve determined you have hired good people and recruiting is doing its job, but your HR team is not doing a good job of retaining those people. The way to fix it is:
- Provide some sort of career path for your workers. As mentioned, the biggest reason people leave companies because they want to advance their career. Allow them to do that within your company by having regular conversations about their career aspirations, giving them opportunities to grow their skills and look to promote from within your organization, instead of looking externally.
- Check your compensation and benefits plan. Sure, paying people more is always nice, but benefits can be just as important. For example, if you are losing a lot of employees because they are getting older and are becoming increasingly more worried about their retirement, work on improving your retirement plans to keep those great people.
- Take time to recognize great work and organize some fun team building activities. It sounds silly, but sending a “thank you” note on a person’s work anniversary or organizing a team paintball trip goes a long way to building morale and loyalty toward your company.
One note to consider
Sometimes, you don’t want to retain employees. If you are brining in people who don’t fit in with your culture or just don’t have the ability to do the job, it’s usually better for both sides to split up.
But, when you have a great team, you want to do what you can to keep them around. And, often, that means being appreciative of them and having frank conversations with them about their career.
All that said, you are never going to retain all your employees and, honestly, the better the employee, often the harder they are to keep ahold of. Even if you do lose them though, you want them to have a positive experience at your company, which is best achieved by creating an organization that both brings in the right people and treats those people the right way.
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