If you were given the option to invest in either recruitment or retention in your organization, which would you go for?
There’s an element of chicken and egg about recruitment and retention — you need to hire new employees, but you also want to make sure they stay.
Traditionally, much of the HR emphasis has been placed on recruitment in most workplaces and it’s easy to see why: you can see recruitment as having a clear pathway and a definite end.
On the other hand, striving to keep new hires in their roles — or maintaining a “good” rate of employee turnover — has fewer defined stage-gates. It’s an on-going, and arguably more complex, process.
But which costs the organization more: recruitment campaigns or retention efforts?
There’s no shortage of research surrounding the staggering reality of recruitment costs; with some studies concluding a new hire could require as much as £30,000 (~$40,000) in tangible and intangible investment.
Recruitment and retention are interlinked; increase employee retention, and you reduce the need for — and of expense — recruitment.
So rather than focusing on one or the other, organizations should give an equal weighting to both recruitment and retention. Which, for many businesses today, would mean amping up their retention efforts, to bring them in line with recruitment operations.
Yes, recruitment is still important for every business, even as technology further changes the landscape
"The secret of my success is that we have gone to exceptional lengths to hire the best people in the world.” - Steve Jobs
There’s really no need to make an argument for the importance of good recruitment: having a strong team of talented people leads to commercial results.
And the need for a recruitment process will never go away. What does continue to evolve, however, is how that recruitment process plays out, both in terms of what exactly it is that new hires are looking for from their role, and what companies are looking for in their candidates.
As digital technology continues to influence the workplace, recruitment will not be immune to change. The HR Director predicts Artificial Intelligence and advanced analytics will speed up the recruitment process, using algorithms to audit applications in a way that goes far beyond the typical CV screening we’re familiar with today.
But the presence of AI in organizations is also causing job specs and role requirements to metamorphose.
In functions where AI and machine learning are making leaps — administratively, by reviewing paperwork and contracts and in customer relations, where online chatbots are redesigning support services, for example — the changing role of human capital in these positions is causing some to worry and others to celebrate.
And this offers an interesting challenge for recruitment teams: if traditional job roles are changing, recruitment approaches must also modify to ensure the candidates placed are capable of performing as the role itself evolves.
In short: recruitment becomes less about hard competencies and professional experience, and more about soft skills and adaptability.
These soft skills — communication, creativity, self-confidence, leadership, empathy, giving and receiving feedback — are immune to shifts in the business landscape. They will continue to be crucial for each and every employee, long into the future.
And this is echoed in what employees want from their organizations in the 21st century. Increasingly, staff members are prioritizing intrinsic rewards versus extrinsic ones, i.e. personal fulfillment and pride, versus impressive pay packets.
Harvard Business Review sums these new motivations as the 3 Cs: career, community and cause. That is: the need for autonomy, alongside learning and development; feeling respected and connected to team members and the organization as a whole; and a sense of positive impact, inside and outside the office walls.
In line with this, many businesses are investing in branding campaigns which symbolize and promote the company ethics, values and mission; to attract both new customers and new employees into the fold.
Yet, just as with creating a loyal consumer base, attracting high profile applicants for an open position is just the first step.
If an organization fails to deliver against its advertised values once a new recruit is in place, they risk a high employee turnover rate due to dissatisfaction and disengagement.
A business really must walk the walk, exemplifying its culture to all staff, every day. It must strive to keep the best candidates, for as long as it can.
And, this is where retention efforts come into play.
What you do to retain employees plays an invaluable role: it will help keep top talent by your side
"I am convinced that nothing we do is more important than hiring and developing people. At the end of the day, you bet on people not on strategies.” - Lawrence Bossidy
You’ll surely have read that Millennials, the job-hopping generation, will soon make up more than half of the world’s workforce.
And if the majority of your staff members are unlikely to stay with your organization for more than two years…should you still invest in their personal and professional growth?
Absolutely! As Lawrence Bossidy hits on in his views on recruitment: nothing is more important than hiring and developing your team.
Just because a new recruit fits into the demographic of a job-hopper, it certainly does not mean they are unwilling to put in time and energy, or to be integral to the success of your business over the coming months or years.
If that employee then chooses to leave, the business has to tackle, once again, the hefty cost of recruiting to re-fill their position.
So if we’re talking safe bets: leaders are better off investing company budget into developing and nurturing existing talent — helping them find career, community and cause in their role — than seeking new team members to take their place.
But the economic argument for retention is just part of the bigger picture: an organization’s cultural development is boosted when retention is given importance. The relationship between culture and retention is cyclical. Get the right company culture in place, and you should see turnover rates slow down — and visa versa, creating an organizational structure where staff churn isn’t at a high, and your culture is more positive and welcoming.
Retention is the responsibility of everyone within the organization — not just HR.
So how can your company put more emphasis on retention, all the way from the C-suite to the shop floor?
Top tips to put retention efforts at the heart of your company strategy
Whilst there are many symbolic and systematic things a business can do to retain employees, we’ll focus on just three top tips — each of which you can use to change how your company operates today.
- Use short term goals to motivate employees
No employee — even the CEO — is above the need for goal setting.
But timeliness is key. A McKinsey article explains this perfectly: “One common mistake is setting goals at the beginning of the year and forgetting about them until review season.”
In today’s businesses, twelve-month goal setting is too distant to be truly motivating; so much changes in the course of a business year, after all. And with more and more teams working with agile methods and
Instead, short term goals — in the next 90 days, for example — should be used to motivate and incentivize teams.
This helps with speedy on-boarding of new recruits, as well as keeping long-term staff motivated, challenged and engaged with their role.
- Make digital technologies an everyday part of office life
Managers and leaders must be aware of how AI is impacting their workplace — how do your employees feel about job security in the face of a digital takeover?
Normalizing AI applications, and reassuring staff that of how their roles will change, will ensure they still feel their input is worthwhile.
Building technology into the way your business operates on a daily basis is beneficial across working demographics, but it is notably favorable with the Millennial workforce.
Do what you can to give Millennial workers the digital tools they expect in today’s workplace — instant messaging systems, for one — and lean on digital solutions to collect data on how staff members feel in their roles, and track satisfaction levels.
- Communicate, communicate, communicate
Our final bit of advice is perhaps the most important: open streams of communication are absolutely fundamental to retention efforts.
Of course, good communication underpins the success of any business: one Gallup study found that employees whose managers hold regular meetings with them are almost three times as likely to be engaged; and leaders who use a combination of face-to-face, phone, and electronic communication are the most successful in engaging their employees.
But giving employees an open platform to voice their opinions or concerns, and receive real-time responses in return — through 1-on-1 review meetings, held far more frequently than once a year — establishes the trust and interpersonal relationships that help keep turnover manageable.
The role of performance management and development tools, like Duuoo, in employee retention
Duuoo’s online platform can help with short term goal setting. It uses the latest technology to engage employees, establish communication flows across all levels of your company structure, and much more.
Get in touch with us today to learn more. We’d love to hear from you.