Why New Hires Aren’t Sticking Around

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Employee retention is important for the health of your teams and your organization overall. Learn more about the factors that reduce employee retention and how you can work to improve your bottom line.

Hiring a new person is a significant investment for any company. It pays to give that person every opportunity possible to succeed. For every company, the turnover rate is a critical factor. That’s the rate of people coming into the company and leaving in a given time period, such as each month or over the period of a quarter. A lower turnover rate means you’re retaining talent longer and getting more out of them.

When it comes to turnover rate, you have to think about the costs. A recent study through the Center for American Progress calculated the cost of turnover to be 20% of each employee’s annual salary for workers earning less than $50,000. Meaning, on average, it can cost up to $10,000 to replace a member of your staff. When you are hiring new team members, it costs money to get them on-boarded. It takes time for their productivity to increase to the expected level. When it comes to turnover reduction, it’s critical to think about what’s happening and why. By better understanding what drives talent away from the company, you get a better idea of how you can effectively reduce your hiring costs. It’s not possible to work on reducing turnover until you know what’s causing them to leave.

Negative Factors that Contribute to a Negative Employee Retention Rate

Poor Management

Quite often, employee turnover rate applies directly to the way employees are treated and managed by team members. If your managers are not engaging with your employees and providing them with the right support they need to thrive, that’s costing your company money. That’s not to say your managers are bad for business. Often, they simply don’t know their role in ensuring the success of your company when it comes to hiring and supporting new team members.

Consider how well your team functions under poor management. Do you or your managers experience the following:

  • Employees who are late or unengaged?
  • Drama or strife between employees and sometimes with managers as well?
  • Potentially lax rules and requirements that simply don’t get taken care of by necessary team members?
  • Preference of “Favorite” managers to work with because they are easier on team members?
  • Cost inconsistencies – from labor costs to production activity – across all teams?

When there’s good management present, on the other hand, there’s significant opportunity for companies to thrive. With good management in place, you may notice:

  • New hires are willing and able to ask questions. They feel comfortable enough to do so.
  • Employees follow the same basic standards. Everyone knows the rules and what they are responsible for.
  • There’s a streamlined onboarding process when someone is hired that is operated on across the board.
  • Standards are set and met, or consequences are evenly distributed.
  • When problems arise, solutions are created rather than pushing those problems to the side.

How do you work towards this? It is important to value training and continuing education for your employees in order to maintain a productive and positive atmosphere. There are many options that may help, including LinkedIn’s educational portal and schools like Harvard Business School. Many programs and options are available from third-party providers and universities across the US that offer classroom and online options. 

With proper training, there’s a better atmosphere present in the workplace each day. That means employees are more productive and efficient at what they do. This leads to reduced turnover simply because the space is friendly and a place people want to be.

Employees are Disengaged

In some situations, employees struggle with the tasks on the job as well as the overall atmosphere. This leads to burnout. When an employee is burnt out, he or she is no longer interested in providing the best level of service for your company. They may be simply exhausted mentally from the job. That can lead to disengagement.

When an employee is in this situation, it doesn’t mean they are a bad team member. Rather, it may mean they need more hands-on attention from their employer, human resource managers, or manager. The first step here is to set up some time for a 1:1 conversation. Find out what’s happening. It may be something related to their home life or the way they feel about the company. They may even have some concerns about the way they are treated that need to be addressed.

This may not happen just on an individual scale. Sometimes it spans a larger number of employees. In this case, still work for those individual conversations but also consider an anonymous survey or team building exercises that may open the door to better conversations and solutions.

Finding the root of disengagement is an essential way to solve the problem. It also helps you to take steps before losing a new employee.

Your Employees Don’t Have a Defined Career Path

Employee retention strategies have to take into consideration what happens to your employees when they are working with you for some time. Are there opportunities for advancement? If so, do your employees know how to reach those goals? Define a career path or a success path for your employees. Doing this can help them see success within your organization. That keeps them engaged and moving forward – they feel valued and have opportunities for new positions and better pay. This can help employees who are otherwise feeling stagnant.

In some situations, employees leave their positions because they are seeking out better advancement opportunities. They may feel there are no other opportunities or anything new for them to do in their current position. Other times, they do this because there are no prospects of better pay, better benefits, or a leadership position for them. When employees crave this (and often they do) they will find it somewhere else if you don’t offer it. It’s important to set a defined career path for your employees and set bi-annual meetings to discuss progression and change of direction if it is fitting to do so.

Missteps in the Hiring Process

What hiring practices do you use that could be costing you employees? Having in place hiring best practices is one of the most important tools you have to ensure that you’re not investing money into people that are simply not a good fit for your company.

The first thing to recognize is that it takes time to find the right fit. If you are rushing through the hiring process it can lead to numerous complications. Rushing the hiring process leads to resources that are wasted. As a result, employees may flatline over time if it was the wrong fit. For that reason, make sure you’re vetting employees properly.

Sacrificing the quality of a candidate for speed in hiring costs you money in many ways. It may lead to managers and other team members having to pick up the slack on the work that the new hire is unable to provide. Underperforming team members like this may have been selected for positions they have no skill or qualifications for, putting the entire team at risk. You may not know that until you’ve worked through the process of properly vetting the employee.

When it comes to hiring, the quality of the candidate should be a top priority in every situation. This directly contributes to the company’s workplace culture, workflow, and retention.

A poor fit could cause problems for other employees in how they handle the job, how much work they have to do, and the complications that arise from the process. This can cause good, well-seasoned employees to consider leaving the job. If these individuals have to work harder because the company is not hiring employees who can handle their job and do it well, that’s going to directly impact the company’s long-term employee retention rates. Working with a recruiting firm can help you secure top talent and reduce turnover by finding the right fit for the positions you’re looking to fill.

Toxic Work Environment

Most people have a limit to what they are willing to withstand on the job. No company sets out to create a toxic or difficult work environment. Once it is there, though, it is not only hard to move past it, but it puts the business’s financial stability on the line as well. If you have a work environment that is toxic, it could very well drive some of your employees to find new jobs. That includes both key employees and the new hires you bring in who notice what’s happening.

It’s hard to find yourself in this position. If you recognize it, there are steps you can take to get out of it. The first step is to recognize what’s occurring. Analyze what’s occurring and work to find out why. Remember, this is not all about just creating rules, but understanding why people are struggling to thrive in the environment you’ve created.

HR managers should be keen to understand the environment their employees are working in on a daily basis. Hiring best practices are only a small portion of this. You also need to consider each employee, his or her role in the good and bad within the organization, and the goals of the company.

To shift away from a toxic work environment, start by having 1:1 meetings with each team member and every manager. Recognize that this should be level across the board – don’t leave out people who you do not see contributing to the “problem” or “solution.” This type of conversation helps to alleviate the issues as they are happening. It can also give you insight into the culture that’s present in your business. That allows you to address problems that come from these meetings in a meaningful manner.

Key Takeaways for Employee Retention

If you don’t take the time to truly understand what’s happening in your business – by talking to employees and managers and creating solutions, it’s going to cost you in the long term. Take the time to build a strong and healthy company culture one meeting and one hire at a time.

PeopleSuite’s talent acquisition services are here to help you. Using our wealth of experience and resources, we can help you find the best talent to fill your positions . We strive to ensure we are delivering top quality candidates to our clients each and every time. Through our refined search process, 74% of the candidates we have placed over the last 3 years are still in their positions today. Contact us to learn more about our search process and how we can help you find the right fit for your available positions.

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