When companies go through all the steps to recruit and hire the right employees, they expect them to remain with the company for a reasonable period of time. Employee retention, however, has become, and continues to be, a major issue for 57% of business organizations and companies.
Approximately 22% of new employees have left after 45 days from the initial date they were employed. When Vistage surveyed small and midsize business CEOs, 35% stated that their primary concern was staffing. Furthermore, this issue was twice as much a problem as the other issues they faced.
Reasons for this high turnover include temperament and poor performance. However, the major factor after performance-related issues is actually a poor skills match, according to a recent survey by Robert Half. When surveyed, 36% of 1,400 executives claimed that failed hires didn’t have the right skill set for the position. After this, 30% of these executives claimed that unclear performance objectives lead to a high employee turnover rate.
Another situation that leads to employee turnover is when employees aren’t dedicated to their current position. While they may not be actively seeking or interviewing for a new position, up to 53%, according to a Jobvite survey, remained open to new prospects. In June 2015, for example, 2.7 million employees left their positions on a voluntary basis. This is a 25% increase from 2013.
There is an obvious cost to employers as a result of this high turnover rate. In general, when an employee leaves, it costs the employer from 30%-to-150% of their salary. Furthermore, the U.S. Department of Labor addresses the costs of “bad hiring decisions,” and estimates these can be equivalent to 30% of potential first-year earnings.
There are a variety of solutions to this issue. For example, when new employees participate in a structured on-boarding program, three years later they are still likely to be with the company.
Another solution to assist with talent retention is creating an employee recognition program. For example, it was found that when companies recognize their employees’ contributions, 86% have reported employees are happier. This is a clear indication that these employees feel appreciated. As a result, they experience increased motivation, productivity, and success-orientation.
Gender and ethnically-diverse companies also tend to be more successful, according to McKinsey’s research. The results from this study indicated that when a company is gender-diverse, it was 15% more likely to perform higher than companies without gender diversity. Furthermore, when these companies are ethnically-diverse, they were 35% more likely to be successful.
There is a growing need to utilize the expertise of human resources consultants. Outplacement consulting firms can provide a variety of services to assist with employee retention, restructuring consulting, and other issues related to talent acquisition and retention.
Outplacement consulting firms can provide on-boarding services for currently-placed individuals which includes executive coaching, leadership development, and succession planning. Furthermore, outplacement consulting firms can assist start-ups with team building and honing their business objectives so they are better prepared to launch their business.
