Retain or Recruit What's Right for You?

What is the?actual?cost of hiring and turnover?

Why the stay interview is your best proactive defence.

One recurring theme I often hear from leaders is - how to build loyalty while working in an evolving hybrid environment? How can we get people to the point of being motivated because they feel their contribution is meaningful??

In essence, they remain concerned with retaining staff, especially crucial contributors, which is critical for any organization’s execution of the business strategy.

Several years ago, the concept of a stay interview (sounds better than a retention interview) emerged. Today, this process is starting to be embraced. Other activities used to understand what to do to diminish turnover and improve retention are falling by the wayside.?The most common tools for measuring the employees’ feelings are the pulse survey or the exit interview. Both are lagging indicators. While it makes perfect sense to know why people are leaving your employ, those who conduct the interviews often feel the person has not fully shared the deeper cause. Most frequently, people gave reasons not associated with the company, and if they did, they shared the outcome, not the events and emotions leading to their exit.

Don’t Be Like a Deer in the Headlights When Employees Leave.

Research varies as to the watershed moment a new hire decides to stay or leave. The high end of the study is 90-days, while some indicate it is more like within the first week on the job. Well-timed stay interviews help you understand how employees feel about their job, company, and boss.

Stay interviews are meaningful messages to your employees that you value their opinions and that they can be part of a robust employee experience. Stay interviews can be a critical means of retention, avoiding the costly and time-consuming need for replacement hiring. However, all this is for naught if actions do not follow.

It is essential to discover what a new hire is thinking. Building a stay interview into the onboarding process is critical.?

Here are some of our ideas on how and who should conduct these interviews.

• Choose the interviewer wisely.?Most suggest the manager conducts the stay interview. But the manager is the likely cause for the departure. Will the individual respond honestly to the manager when trust and respect are in question? Likely not.?The recruiter (or HR business partner) is more of an ally and should conduct the stay interviews.?
• Choose the right questions.?The questions should focus on what was promised to the employee that first motivated them to take the job, and their answers allow you to discover the gap between the promise and the reality. Having this knowledge also helps improve your realistic job previews for future interviews.
• Be accountable for retention.? Retention needs to be part of the hiring manager’s measurable goals. After all, if you expect retention, you need to measure retention of the source of what causes retention. Remember, “you can only expect that which you inspect.” Why are human resources accountable for retention measurements? Human Resources are arm’s length from the root cause of retention or turnover.?
• Have courage.?The person who conducts the stay interview needs to have the courage to transfer the learning to the employee’s manager and the manager’s manager—the actions to improve retention need to be seen as an opportunity to take positive steps for everyone.
• Interview early.?Considering when people begin to think if they will stay or go, the first stay interview needs to be conducted before the end of their first month.
• Follow up.?If there are signs the new hire is dusting off their resume during the initial interview, a follow-up conversation is critical. The HR Business Partner needs to follow up with the employee within two weeks to ensure the correct action is being taken.
• Interview annually.?There should be a scheduled interview for employees in critical roles at least once a year. Again, as the issue is often their direct manager, the better person to conduct the interview will be the HR Business partner.??
• Make it clear.?Ensure the purpose of the stay interview is clear to both the employee and their manager.
• Stay on topic with how the person feels.?Does the employee perceive their work aligns with the company’s purpose, and they see the outcomes of their work as meaningful for the company’s success;?however, ensure?this is not a performance conversation.

The Real Cost of Turnover

What is the business case for the recruiters, hiring managers and the manager of the hiring manager’s time to retain staff?

Put differently, why bother? Isn’t employee turnover simply the cost of doing business? It does not have to be. Over the years, I have asked hiring managers to calculate the obvious and hidden costs of replacing an employee. The results are usually an eye-opener.

Consider the following:

Here are some of the considerations. ?For an entry-level employee who makes?$45,000 per year, when all is said and done, and the person is up to full productivity, you have invested one and a half to two times their salary. The cost is three to four times their base salary for a middle manager. The price of a skilled individual contributor is like that of a middle manager. If you replace ten middle managers a year, you lose approximately two million-plus a year. Why?

Some of the costs to be considered in replacing an employee accumulate because of:?

• Loss of productivity
• Stress on the remaining employees to cover for the gap
• Training costs could be six to 12 months while you bring the new person up to speed.
• Bringing the new person up to total capacity also takes away from those doing the training.
• The cost of hiring expenses. If you bring in a person from out of town, you incur airfare, hotel, meals, transportation, etc.?
• Lost sales opportunity
• Loss of profitability?
• Low workplace morale
• Deteriorating reputation as an employer in the external talent pool
• Zero ROI on your selection process
• If a senior person or salesperson, you could also be losing clients

These are only a few of the considerations. One other significant increase in the cost would be if the person exiting also begins a lawsuit. The common belief that the cost of replacement is 50 to 75% of a person’s salary is a gross underestimate. If the retention interview successfully achieves its intention of keeping employees, you will reap significant benefits.

During this time of great work upheaval, the only thing you can’t overcome is an offer that exceeds 20% of their salary or a reduced commute time, or the job offer is for a more favourable hybrid work arrangement.

The Upside of the Stay Interview

Exit interviews still have a place. Adding stay interviews will help reduce the number of exit interviews and retain those considering leaving.

From a business perspective, the stay interview could save you thousands of dollars, improve your reputation as an employer, and positively impact the employee experience. It might also be a wake-up call to your hiring managers that they can change and make their work lives more meaningful and less stressful.

If you are interested in a list of stay interview questions, please?email ?me. Thank you.