Stop the Revolving Door of Employee Turnover

Using data to improve recruiting, hiring and onboarding processes can help stem the flow of employee turnover

High levels of employee turnover take a quiet, yet significant toll on companies. That annoying swooshing sound caused by a steady stream of employees as they happily push their way through that figurative revolving door is nothing compared to the effects of silent cripplers like lower profitability, productivity and morale.

To make things worse, the current low levels of unemployment have created a supply-and-demand issue that only exacerbates the problem of finding replacement workers. And the longer it takes to hire replacements, the more hiring expenses increase and the more morale erodes as existing employees grow weary of picking up the slack.

It doesn’t have to be that way, says Carol Jenkins, an industrial organizational psychologist who works for OutMatch. The Dallas-based consulting firm helps businesses develop automated processes that improve hiring and employee-development decisions through data-rich assessments and analytics. In other words, a primary cause of employee turnover is bad hiring decisions that technology can help companies avoid.

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“Years ago, human resources traditionally was seen as a soft area. Its purpose was to make people feel good,” Jenkins explains. “But now, we’re seeing a shift to technology that can make hiring processes more efficient. We can create systems that layer all kinds of data together and create a clearer picture of job candidates.”

As an example, Jenkins points to employee assessments that can help organizations understand what differentiates a successful performer from a poor performer. Managers then can keep those success traits
in mind as they screen job candidates during the hiring process.

Recruiting is expensive

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Quantifying the cost of turnover is difficult, which also makes it easier to ignore. Some experts opine that the average cost of losing an employee in a highly skilled position is more than 200 percent higher than that employee’s annual salary. Others peg the cost at roughly six to nine months of an employee’s annual salary.

But no matter how you try to calculate it, there’s no doubt that advertising a job opening, recruiting candidates, interviewing them, checking their credentials and references, giving pre-employment skills and drug tests, and then hiring and training them is anything but inexpensive.

What are the most common causes of high turnover? If it occurs quickly, it’s likely the employee didn’t have the right experience or the job wasn’t what the employee expected. “A recruiter may have sold them something that isn’t true,” Jenkins says. “That’s why it’s so important to provide a realistic job preview so their expectations are very similar to what they’ll actually be doing. That way, if they don’t like what they hear, they can ‘quit’ before they get hired.”

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If employees leave after six months or longer, job stagnation may be the culprit. “They may see no chance of career progressions, or they have a bad relationship with their manager,” Jenkins says. “Or the pay isn’t high enough. Those things become more important the longer employees stay with a company.”

Upfront analysis

Regardless of the cause, however, Jenkins feels strongly that proper hiring and onboarding processes are critical to reducing turnover. It’s similar to the old expression about the computing industry, “Garbage in, garbage out.” In other words, results are only as good as your initial inputs. And that’s where systems and analytics come into play.

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“Can the candidate do the job and will they do the job are two separate actors,” she notes. The former can be measured by ensuring candidates possess basic job skill sets. The latter can be addressed with assessments. “Can someone work with customers, and do they like customers?” she asks rhetorically. “People who are negative or disagreeable will be frustrated with customers. That’s not always easy to see in interviews, but assessments can help allow you to see their passions and innate qualities.”

But can’t job candidates game assessments? Not very easily, Jenkins asserts, noting that questions are subtly worded to minimize candidates’ abilities to cover traits they don’t want to reveal. “You can tailor assessments to best see what success looks like in your organization,” she says.

Data and analytics can help in other areas, too. For example, they can help you ferret out candidates who are more prone to turnover. “Candidates who score moderate to low in integrity, for instance, tend to quit more than those who score high,” Jenkins says. Another tool in the low-turnover toolbox: Interview new hires after 60 or 90 days on the job and see if the recruiters are representing the job accurately so that candidates’ pre-hiring expectations aren’t shattered by on-the-job realities.

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“You can also ask them how they feel about the connection with their managers,” she suggests. “Or if they feel like they’re part of the culture, or if they have a good friend at work, which is a key factor in employee engagement.

“You can even ask them if they’d take the job if it was offered to them again,” she continues. “And if you find gaps in the processes (for hiring and onboarding), then you can make interventions. But you then have to measure the results of the interventions — see if they moved the needle. That will help retain those employees longer.”

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