5 Ways to Improve New Hire Retention

The amount of money spent annually to attract talent can be staggering. With so large an investment it is shocking to see that some of these same companies fall short when it comes to protecting it. Great talent is hard to come by, and as my recent poll shows nearly half of the companies are having a hard time retaining new hires past their first 90 days. So what's going on here, and how can a company protect their investment in talent aquisition?

When it comes to new hire retention I break it down into two buckets: first 30 days and 31-90 days. I do this because the reason a new hire leaves within their first 30 days is quite different than leaving in month 2 or 3, and the possible solutions can vary accordingly.

I don't mean to sound like captain obvious, but when a new hire leaves within their first 30 days, something went terribly wrong. Here are some common culprits.

Why You Might Be Losing Employees in Their First 30 days

1. Communication Breakdown- Important factors such as pay, benefits, hours, schedule, job duties, minimum expectations, etc. were not communicated clearly. It typically takes a paycheck or so for these new hire to figure out that things are just not going to work out.
2. Toxicity- If the compensation is high enough, better informed new hires may arrive fully clad in haz-mat suits, sadly most come ill-prepared for toxic leadership and/or toxic culture.
3. Second Place- In the desire to get back to work, an applicant will complete many applications, attend several interviews, and yes, receive multiple offers. Tired of waiting for their top pick, many job seekers will accept an offer and start working at a company that is "good enough", only to receive a dream offer 2 weeks later.
4. Unqualified- "Fake it till you make it" may work in some industries, but if a new hire comes to the realization that they are not going go succeed, they often quit before they get found out.
5. Impostor Syndrome- When taking on a next-level role at a new employer, new hires may have all the right skills and experience, yet lack the confidence and courage. Without support and encouragement, they will exit similarly to the unqualified hire.

Why You Might Lose Employees in their first 90 Days

In the subsequent 60 days, any of the above might still result in a new hire leaving your organization. The employees quiting in this latter period are doing everything they can to try and make things work, only to find themselves unable to do so. Some common themes of a 31-90 day employment duration.

1. Pay & Benefits- After a few paychecks and trying to make it work, sometimes it just isn't working out.
2. Leadership and Culture- While they may not be altogether toxic, when an employee recoginizes, "This is not the place for me", they exit stage right.
3. Poor Fit- Whether it is the job duties, the technology and equipment, the service/product being offered, or the company itself, if there isn't a fit, they will probably quit

Once you have a better understanding of why your new hires may be leaving, here are some ways your company can improve new hire retention.

5 Ways to Improve New Hire Retention

1. Comprehensive Onboarding and Training

A well-structured onboarding process sets the tone for a new hire’s experience. Incorporate future supervisors, and mentors into the onboarding process to ensure proper alignment with company leadership, culture, values, and job duties. Go beyond the basics, build a program that provides new employees with the skills and knowledge they need to succeed. This includes not only job-specific training but also insights into company culture, values, and expectations. Providing a clear path for growth and development from day one helps new hires feel supported and valued.

2. Regular Feedback and Open Communication

Frequent feedback is essential for new hires to understand their performance and areas for improvement. Regular check-ins, especially within the first 90 days, to gather feedback and address any concerns. Having a key stakeholder connect a new hire at the end of their first week, and after they receive their first paycheck can prove beneficial to retention efforts. Open communication channels between new employees and their managers also foster a supportive environment where issues can be discussed and resolved promptly.

3. Foster a Positive Work Culture

Creating an inclusive and engaging work environment is key to employee satisfaction. Encourage teamwork, celebrate achievements, and promote a culture of respect and recognition. A positive workplace culture not only enhances job satisfaction but also helps new hires feel a sense of belonging and connection to the company. The sooner your new hires feel they belong, the better.

4. Provide Career Development Opportunities

New hires are more likely to stay if they see a clear path for career advancement. Offer opportunities for professional development, such as training programs, mentorship, or career planning sessions. Showing a commitment to their growth and career progression can increase employee loyalty and reduce turnover. Your best hires need to feel there is a future at your organization, if they do not see it, they will find it somewhere else.

5. Ensure Competitive Compensation and Benefits

While job satisfaction and work culture play significant roles, competitive compensation and benefits are also crucial for retention. As a rule I have always positioned compensation between the 50th and 70th percentile. There is no need to have the highest compensation in a market, but you certainly do not want to fall below average. Regularly review and adjust salary structures and benefits packages to ensure they align with industry standards and meet employees’ needs. Offering perks like flexible work arrangements or wellness programs can also enhance job satisfaction and loyalty.

I hope you find this useful in your endeavor to protect your recruiting investment by retaining your new hires. Have any questions, feel free to send me a message. I also encourage you to subscribe to my newsletter "The Monday Minute" for more recruiting and retetion tips.

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