The Job Crystal study on ‘time to hire one new employee’, showed on average 33 hours. This was from the start of creating the job description, to advertising, answering applicants, screening, sourcing, interviewing, completing background checks and ending in the offer being negotiated and accepted. 33 hours for one person working a standard month of 173 hours, equates to 20% of their working month.
Working out that cost from salaries, advertising, sourcing platform, background checks with the new employee’s salary for the first 3 months, you can see the amounts adding up. Should this new employee leave shortly after being hired, the company could have wasted on average R250,000 (completed in a study by Price WaterHouse Coopers).
How do you reduce your hiring costs?
Quite simply retain your current and new employees! Steve Jobs said that hiring the best if your most important job, while keeping them may be close to your 2nd most important job.
There are 100’s of ways to retain employees if you google. But what really works? I went looking at peer-reviewed studies to show what is really keeping employees engaged in 2021. Here are the results:
1. Show me the money
As much as all the leaders would like to say that their employees are there because of the great company, most studies show it is due to the money. I have completed exit interviews in all my previous companies, and still do, and often money or monetary rewards comes up as a contributing factor on why staff leave.
As a recruiter the number 2 reason we see people leaving companies (post 3 – 5 years) is due to no growth. The employee started in one role and stayed there working hard, achieving KPI’s but never gets promoted. Promotion does not need to mean leadership it could mean education opportunity, mentorship, or promotion as a specialist. In the end offered ways to grow is the number two reason we see employees leave. This came up in allot of the studies as learnings and mentoring.
My number one tip for companies that cannot offer employees more money offer mentorship!
3. Organisation Performance
We often see it in sport, when the crowd follows the winning team and will change allegiance when their team is not doing well. Studies have found this is as well with organisations. Everyone wants to be with the winning team, so when your company is leading and doing well your employees will generally stay.
If we have learnt anything from Covid-19 and the pandemic it is to be more human. To interact with our teams, communicate more and engage one on one (even if it is through Zoom). Engaged employees feel valued and participate more in the business. Leaving employees to do their own thing is good for tasks not for morale.
I had the benefit (but not at the time) of moving to 7 schools in my school career. With this came the fact that where I had made the best friendships remained my favourite school, regardless of the actual school. The same is found in studies on employee retention, where there is comradery retention of staff is longer. Comradery as per the dictionary ‘is a spirit of friendship and community between two people or a group of people.’ Having some one to talk to who is in the same situation makes work life better and easier.
My tip here is to have those socials, have team builders, build the team – it will save you costs in the long run.
Having read ‘Start with Why’ by Simon Sinek I see why he says that people choose to work at a company because of the companies ‘why’. But staying will be the money saver! The why should not change in the company but the employee engagement, team builders, mentorship, growth opportunities and bonuses should be added and changed often.
Should you wish to read some of the studies of these results please find below:
Rajalakshmi.G.S. & Dr.K.T.Subhashchandra. 2020. A STUDY ON EMPLOYEE RETENTION STRATEGIES WITH REFERENCE TO COMPANY FACTORS IN SME IT SECTOR. EPRA International Journal Of Multidisciplinary Research (IJMR). 6(6). L DOI: 10.36713/Epra2013.
Owusu, Martin Anokwah, “Strategies to Improve Employee Retention in the Small Retail Industry” (2020). Walden Dissertations and Doctoral Studies. 8969.
Roe, Melanie (2020) The Effects of Organisational Culture on Employee Retention in SMEs in Ireland. Masters thesis, Dublin, National College of Ireland.
Washington, Felicia Tetee, “Employee Retention Strategies within Information Technology Small Businesses” (2020). Walden Dissertations and Doctoral Studies. 9833.
Asford.T.K. (2021). A Phenomenological Study: The Relationship Between Employee Motivation, Financial Reward, Engagement, and Comradery. Northcentral University, ProQuest Dissertations Publishing.
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