True Cost of Hiring and Retaining (the RIGHT) Talent
“i Quit!”
In movies, shows, and stories, the employee exit is often portrayed as a monumental event that happens in a moment of passion when the person has had enough.
Jerry McGuire. Half Baked. Office Space. The list goes on.
While there are instances of an abrupt exit, more often than not it is a slow descent into throwing up the deuces and moving on. In a mostly amicable fashion, at least externally.
In either case, attracting and retaining talent remains one of the most challenging and migraine-inducing endeavors an organization faces.
Stats:
According to Indeed, most companies can expect to pay anywhere from $2,000 (for an in-house, predefined process) to upwards of between $4,000 and $20,000 to hire a new employee, “not including salary and benefits.
Certain research suggests that when a business has to swap out a salaried employee, it can end up costing about six to nine months' worth of that person's salary. (Someone pulling in $60,000/year = $30,000 to $45,000 just for recruiting and training new folks.)
Losing someone, even a low performer, impacts the organization in countless ways.
Beyond just one less person to get work done; every project they were involved in stalls; the work they did daily falling through the cracks or getting moved on to someone who may already be overburdened. Compound all that with spending time and money you don’t have to hire someone to replace them and hope they work out.
There is a concept in the lean/continuous improvement world called “The Hidden Factory.” The theory goes that much of the underlying cost in a manufacturing plant can be attributed to reworking manufactured parts that were produced incorrectly.
It was put simply to me by a former colleague, it costs ten times as much to rework something that was produced incorrectly than it does to deliver it right the first time. Without belaboring the model's particulars, the parallels between producing a part incorrectly and hiring the wrong person are awfully similar.
Take the $2,000-$20,000 new hire cost, then add all the work, resources and energy it takes to train them. Now they leave. Add all the work, resources and energy to off-board them (collecting equipment, closing accounts, etc.) and bookend it with another $2,000-$20,000 new hire cost for the next person.
Short story long, it costs a lot to hire someone. Getting it right should be priority number one.
While the concept of recruiting, interviewing and hiring well cannot be summed up in one newsletter here are three things to think about when trying to find and therefore retain the right talent.
Focus on fit over skills, knowledge, ability (SKAs) and experience.
Skills can be taught. Knowledge can be gained. Ability can be grown. Experience can be earned. Fit is what it is. Either a person is going to feel like they are a part of the team, or they are going to feel like an outsider.
I don’t want to diminish SKAs and experiences, they are important. But when we focus on those alone it becomes a problem. People will come in the door thinking/knowing they can do the work. Whether they stay or they leave will depend on the experience of doing the work.
Practices to consider:
Give them an overview of a day in their life during the interview (and even in the job ad). What can they expect? Will they hear jokes? Will it be quiet? Are dogs allowed? Hawaiian shirts?
Let them spend some time shadowing people before hiring. Give them a peek behind the curtain. Even an hour or two will give them an idea of whether or not it is a good fit.
Be honest. This is not the time to present something you are not (there is never a good time for this to be honest). Be very clear about what you expect from people. Long hours. Dress code. Language. Don’t try to woo them with what you think they want to hear; they are going to find out pretty quickly what the reality is. Save both of you the time and keep it real.
Take time to get to know the person, not the candidate.
Joining an organization is a big step for most people, it is the embarking on a new and potentially (read: hopefully) mutually beneficial relationship.
The keyword is relationship. The relationship between employee and employer shares many of the same needs as any other relationship in your life.
Shared purpose, goals and values. Effective communication. Mutual appreciation. These are the things that get people to stay.
As with any relationship, this takes time and requires getting to know each other beyond what you can get from the other party.
Practices to consider:
Ensure your job ad shares your organization's purpose, values and culture. Where are you headed? How do you want people to show up? What is the vibe of your tribe?
In the interview, craft questions around the ideal person, not the job. What attitudes and behaviors are going to be successful? Do they thrive in working the way and how you want people to work? Situational questions are great! You’ve had situations at work, turn them into questions!
Watch out for bias! Getting to know people is not about finding people who work and operate like you. Diversity of thought and experience leads to the best outcomes and avoids groupthink. You are looking for people who are excited about where you are headed and fit the atmosphere you are trying to create. You are not looking for copies of you.
Hire with the team in mind, NOT the work.
Unless you are hiring someone to do independent work take into consideration what the team needs to thrive. This is where hiring exclusively with SKAs rears its head most. Stop me if you have seen this movie before. You hire someone who has all the SKAs you could hope for. They are qualified and have all the experience you can hope for and then team members start to quit OR that superstar leaves.
What happened?
Team dynamics are not some fickle thing. Effective teams and what they require are known commodities.
(Hint: It is the same thing I mentioned earlier… Shared purpose, goals and values, communication, and mutual appreciation). The goal of great team building is not to have a team of high performers… you want a high-performing team.
Practices to consider:
Involve the team in the interview process. Allow them to ask questions and spend some human time with the potential candidate (having food together is always a great option).
Have the team prepare the qualities of an ideal team member. What do they like/need? When have they been the most successful? What are team breaker behaviors?
Allow the candidate to interview the team. Let the communication begin! Make it a dialog with the team to see how the candidate meshes. You could even give them a current problem to workshop with the team, brainstorm ideas, etc.
Here's the bottom line (literally):
Choosing the right candidate isn't just about filling a position; it's about sculpting a dynamic culture that drives success.
When you recruit individuals who resonate with your vibe and objectives, you're not merely hiring; you're igniting a spark that propels your team forward.
Keep in mind that it's not just about filling a role; it's about selecting the perfect fit to elevate your business to new heights.
With stoke and gratitude,
The CultureStoke Team
