Employee turnover can be devastating to your organization. It can cost you anywhere from 30% to 400% of your employee’s annual salary, including recruitment and training costs, reduced productivity, and lost opportunities. As the talent shortage worsens, this cost will only increase as it takes longer to identify and hire qualified talent. Smart organizations are looking at ways to reduce turnover throughout their entire employment lifecycle — beginning with the recruitment process. Here are a few retention strategies that start during the recruitment process to reduce employee turnover at your own organization:
Strategies to reduce employee turnover
Encourage employee referrals
Reducing employee turnover begins with attracting the highest quality talent from the get-go. Employee referrals have been long known as an excellent source of hire, as referred candidates tend to be faster and cheaper to hire than candidates from other sources. Referral hires are also more satisfied and stay longer, with 46% staying for more than a year, 45% more than 2 years, and 47% more than 3 years. Great employees intuitively know who in their networks would be a great fit for your organization and can help their referred hires settle in and become successful, helping them stay longer.
Reduce turnover by recruiting for cultural fit
Cultural fit is just as important as skills fit to make a great hire, but perhaps even more so for ensuring that candidates will stay with your organization long-term. Use behavioral interviewing to screen candidates to determine if they have the values and behaviors they will need to be successful and happy in your organization. Validate their responses with thorough reference checks to ensure that candidates have exhibited your organization’s desired values and behaviors in past roles. Ensuring that all new hires fit into your team dynamic will reduce your employee turnover rate, both for new hires and existing employees.
Offer fair compensation
Compensation is a top reason employees leave companies. While 73% of employers believe employees are compensated fairly, only 36% of employees think they receive fair pay. If you want to reduce employee turnover, develop a solid employee compensation strategy. Offer your candidates a fair compensation package and adjust it regularly to show employees how valuable they are to your organization. While you don’t want money to be the only motivating factor for an employee, you don’t want it affecting an otherwise happy and engaged employee either — or factoring into their decision to pursue other opportunities.
Create a positive onboarding experience
Employee onboarding is crucial for new employee engagement, satisfaction, and retention. Up to 20% of employee turnover happens in the first 45 days, but 69% of employees who had a great onboarding experience are likely to stay with a company for three years. Following the recruitment process, set your new hires up for long-term employment with a great employee onboarding experience. Onboarding tends to be very paperwork-heavy, so try to mix in some other activities to make your new hire feel welcome and comfortable in their new environment. Take them on an office tour and introduce them to everyone, invite them out to lunch, and give them opportunities to ask questions to their manager or mentor. An employee’s early days with your organization set the tone for the rest of their employment, so make sure they’re memorable in a good way.
Reducing employee turnover: Final thoughts
In today’s competitive candidate market, employee turnover is a real threat to the hard work you put into recruitment. As you go about your recruitment process, take the time and effort to consider whether the candidates you’re recruiting will stay with your organization long-term. It’s in your best interest to engage the right people, screen for cultural fit, offer competitive compensation, and create memorable onboarding experiences. Doing so will ensure that your recruitment function is focused on growing your world-class team, rather than getting caught up in a revolving door of employees.