More and more, companies are becoming increasingly concerned about their turnover rates. Employees are leaving jobs voluntarily when only working a very short time on the job, and employers are fed up. Who wouldn’t be? Long story short, turnover is a hot topic and organizations want answers in terms of how to stop it. It’s literally the million-dollar question!
Turnover is, rightfully so, a big concern for many organizations. There are going to be cases where a candidate will pass every step of your hiring process with flying colors and still turn over. Organizations should continually investigate the reasons why candidates are leaving organizations and strive to improve upon those reasons. Even modest reductions in turnover can bring significant positive outcomes to organizations. The causes of turnover are multi-faceted, and often the biggest contributors lie outside of the selection process.
To learn about the lesser-known causes for turnover, click here.
When analyzing the return on investment (ROI) of your hiring process, in many cases you’ll examine the impact on turnover. However, it’s important not to overlook other organizational outcomes that may be impacted by the hiring process. In addition to reasons why employees are turning over on the job, consider evaluating the following five areas when determining the ROI of your hiring process.
Efficiency – How long does it take you to fill open positions in your organization? If the answer is too much time, your current hiring process may not be benefiting you to the best of its abilities. Consider using an online application and a job-fit assessment tool as the first few steps in the process. No human intervention is required, and employers are left with a candidate pool that meets the basic qualifications and are deemed a good fit for the job and/or company.
Quality and Productivity – Examining pre and post quality and productivity data from the time a hiring process was put in place can help you spot where improvements are being made. Is takt time improving? Are fewer quality incidents being recorded? Is there less “waste” to account for? These are just a few questions that can be answered or examined in terms of ROI.
Absenteeism and Tardiness – For all industries, reliable employees are needed. Absenteeism and tardiness can be major culprits for employee termination and turnover (whether this is voluntary or involuntary). Most employees are expected to be at work regularly, and if they cannot, it’s going to be an issue. A solid hiring process can help employers dig further into someone’s tendencies and whether they are likely to be absent and tardy, especially when using predictive, validated online assessments. Fewer absences and tardiness on the job is a good sign your selection process is working!
Counter-Productive Work Behaviors – When employees are unhappy with their job, management, and work environment, they may be more likely to engage in “bad” behaviors on the job. Some of these behaviors include stealing products and damaging company property. If counter-productive work behaviors are something your new hiring process looks to decrease, consider tracking these metrics as part of your ROI analysis.
Industry and Job Metrics – When calculating ROI, always ensure that you’re considering metrics that are important to the job and industry. For example, a company specializing in customer service would want to consider customer satisfaction data as a metric, and a call center would likely want to consider time-to-resolution as a metric. A company’s purpose and mission should be taken into consideration when calculating ROI as well.
Of course, other areas outside of the five listed above are important to consider when examining ROI. In sum, consider all factors important to the company and job. Investigate reasons for turnover in an exit interview and act on them, but do not forget other vital areas in determining ROI of an established hiring process.