How to reduce staff turnover & attract great employees |
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Track the turnover of employees for every manager. Managers who have any significant turnover need to be educated and mentored and, if things don't improve, removed from managing people. Every survey shows that one of the major reasons people leave a firm is because of a problem with the immediate manager. Poor managers are the worst enemy of retention that an organisation can have. Reputations spread and can infect many people and can start a negative buzz about working for the company in the marketplace. |
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Pay at market rates or more. Err on the side of generosity and never let pay be an excuse for an employee leaving. Being a little generous will be motivating to your employee who will recognise the fact and will dig in deep and contribute more. Being mean with salaries can quickly demotivate and lead to your valuable employee looking out for another job. |
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Make it easy for people to move around in your organisation. Let people try out areas where they have little experience. Encourage cross-fertilisation and give people the support and development they need to succeed in the new position. Never tell an employee that they are not ready, too junior, not educated enough, or haven't worked at the firm long enough to do whatever it is they want to do. To tell them any of those things is a guarantee that they will leave you soon. |
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Provide lots of free development and training. Pick key employees and offer them the chance to participate in longer-term development programs. Make a big deal out of development and then pay the employee more money when they complete the program. |
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Finally, remember that today's employees are better educated, more independent, less afraid, more secure and far more entrepreneurial than those of even 10 years ago. This means that HR policies and practices as well as management styles have to be different to what they have been in the past. |
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How Much Will A Bad Recruitment Decision Cost You?
Over the years we have observed the recruiting practices of many organisations. Some hiring decisions have been directly responsible for an organisation seeing a significant increase in profits. But, in many cases, putting on the wrong person has cost a lot of money as a consequence.
We were recently talking to the CEO of a large organisation who had reviewed some of their own recruitment decisions.
This CEO said that the best case scenario was a minimum cost of $30,000 when they hired a staff member who they subsequently had to let go. This was made up of some direct costs which included advertising and recruitment fees, but mostly indirect costs including the slowing down of work in that part of the business, foregone revenue in the time it takes a new employee to pick up speed, loss of clients, loss of work from clients, lost internal motivation, and a decline in the cohesiveness of the team.
But the biggest issue is the opportunity cost in appointing the wrong person. If this results in stagnation instead of growth, over time this will amount to a huge lost opportunity which can be counted in the millions of dollars. This particular CEO cited the instance where hiring someone who was not right saw revenue averaging $300,000 per annum instead of an expected $900,000 per annum. Over a period of four years, this amounted to $2.4m in missed revenue!!
Every organisation can point to a situation where they have experienced a huge opportunity cost (if they are honest with themselves). This CEO stated that "opportunity cost is by far the biggest cost but it is the least measured". People feel direct costs most, and they tend only to measure them.
Getting the Most From Your Interview
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Put the candidate at ease - Make him/her feel comfortable and relaxed. |
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Set the agenda - How the interview will be structured and what you want to achieve from the meeting. |
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Employment History - Find out where they have worked, what the company did, what their responsibilities were and how well they achieved them. |
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Competency - Ask structured behavioral questions that test the core competencies required to complete the role. If the candidate should know the jargon for your industry then use it to test them. |
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Background briefing - Ask about education, interests and hobbies, and extracurricular activities. Try to obtain a feel for the type of person they are and what their values are based on. |
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Career Plans - Give the candidate an idea of the opportunities available to them in the future. |
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The Company - Provide a brief history of the company and the future direction that it is planning to take. |
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Question Time - Allow the applicant to ask questions about yourself, the company, the role, and to gain clarification on any points they are not certain on. |
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Closing the Interview - Thank them for their time. Clearly set out what the next step is and when it will happen. |
This is your opportunity to find out about the candidate. Obviously it's a two way street but you're the one in the drivers seat.
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"I think I'm pretty good - we need more of me!"
Then, after you hire them and invest months in training, other less desirable qualities come to the fore. Strangely you did not observe this in the interview.
It is only natural to want to work with people that are easy to get along with. Of course, you're not likely to hire someone you dislike. However, as they may possess your strengths and virtues, they may also possess your limitations and even your faults. This can create an imbalanced team. It's like a football team full of forwards and no backs!
It is important to be objective about how this person will really perform the role you are hiring them for and how they will blend with the rest of the team. Work strictly to a list of attributes you have prepared before the interview and always include more than one person in the interview process. Often, we find our services at Bond Recruitment are used primarily to bring greater objectivity to the process. Having more than one internal decision-maker will provide a more objective result and your managers will pull together into a more cohesive team, feeling that their input is desired and fully considered.
A Good Recruitment Decision (A CASE STUDY IN MAKING PROFIT)
Here is some good news from one of our clients about the tangible benefits of good hiring decisions.
A national property company undertook a review of one of their Brisbane business units. They decided they needed to change the nature of the work undertaken by the practice. It had been characterised by high volume / low margin work, with very little large scale, high margin work. The type of work undertaken was a direct reflection of the capability of the employees involved.
A major problem with the high volume / low margin work had been the heavy workload required to maintain profitability. It created 'burnout' in employees, staff turnover, lacklustre work quality and adversely impacted on relationships with clients. They recruited a small team of three professionals with good reputations and strong track records. An analysis of the financials before and after the recruitment shows the following results. |
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Change in two years:-
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Annual Fees 68% up |
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Number of Invoices 49% down |
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Average Invoice 227% up |
A division that had previously struggled to break even was now generating big fees and profits. The new employees were now winning business that the company previously couldn't get close to. New corporate and institutional relationships have provided a greater client depth to the total business, and our client is particularly happy that the status and profile of his total business has been elevated in the market.
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