According to CNBC, in 2019, almost 5 million workers quit their jobs. HR managers deal with these turnover challenges, and it can be costly and time-consuming. But it’s not their biggest obstacle. What keeps hiring managers up at night? The stresses of locating the right employee in the first place.
Preventing turnover starts with finding a quality team member. We provide you with the best hiring practices from thought leaders across industries. It’s time to find the right fit for your team – the first time.
The Cost of Hiring
A report in SHRM found that U.S. employers can expect turnover costs to increase to $680 billion in 2020. What is the real financial blow companies take in this process? The time and money it takes to replace talent. Thirty-one percent of those who are new hires quit within the first six months. And a replacement can cost up to three times that new hire’s salary. According to Linkedin, here are some key issues in the hiring process:
- 9 out of 10 small business owners report that they are directly involved in hiring practices. The average time spent in the process is 25-30 hours a week.
- 40% of small businesses report taking two months to find and make a hire. They also spend between $3,000 and $5,000 on onboarding.
The company Yello surveyed over 200 companies on key recruiting metrics. Their report showed that companies state their average cost-per-hire is $3,000 or less. But 31% revealed they spend more than that figure, and 5% say they spend more than $6,000 per opening.
SHRM found the standard amount spent per hire was $4,129. Still, the cost per hire for the average executive was more than three times that at near $15K. So why do employees leave in the first place? Compensation, career development, and work-life balance top the list. A report in the Harvard Business Review reveals 80% of employee turnover happens due to bad hiring decisions. What leads to unfortunate hiring decisions? Not finding the right talent in the first place.
Hurdles to Finding the Right Talent
Here are some reasons why great hires feel out-of-reach for many businesses.
- Shortage of talent. Survey Monkey reported that 52% of small business owners found it hard to find qualified individuals to hire in 2019. For businesses with more than 50 employees, 63% of owners believe it’s harder to find top talent.
- Labor costs. 44% of companies with 50 or more employees anticipate that labor costs will increase faster than the price of raw materials. They also found labor costs will increase quicker than capital expenses. This shows companies expect to raise wages to fill their open positions (Survey Monkey).
- How to accurately test and interview candidates to determine if they can actually do the job.
- Businesses have to fight harder to stand out with candidates.
How to Find Your “Unicorn”
Harvard Business Review reveals that only a third of U.S. companies monitor whether their hiring practices lead to good employees. Neglecting this valuable piece of information has companies repeating the same hiring mistakes. How do you avoid this costly cycle? Excellent employee retention starts with effective recruiting. Below we’ve listed some of the best hiring practices to find your right fit.
Be clear about job expectations
Indeed suggests clearly outlining all work and salary expectations in the job description. Convey the responsibilities and soft skills necessary for success. Providing this clarity can also help reduce hiring costs. A lower hiring time is directly linked with a lower cost-per-hire. Businesses who hire under three weeks see a 50% reduction in expenses.
Using personality tests to find the best fit
According to the Wall Street Journal, you need to vet candidates carefully. They need to fit well with the company culture, managers, and team members. Organizations use personality tests like the Myers-Briggs (MBTI) test to select the right candidate. Unfortunately, traditional aptitude assessments are limited. They tend to view traits as innate and static. They also do not take into account an individual’s worldview. This is also known as their cognitive orientation. Missing this perspective limits the ability to see the whole person.
Fortunately, our SUM assessment factors in a person’s worldview. We also realize that personalities are complex and change over time. Tests like MBTI only break down results into 16 different types. SUM offers highly granularized results broken down into 99 types. This report will help you understand your candidate at the deepest level. Our Team Rooms will also let you see how candidates match up with other employees.
Online job sites
Linkedin suggests that job sites such as Indeed can help you track candidate progress and assess their fit. Business owners report job sites helped them save both time and money.
Harness the power of AI
AI talent acquisition automates much of the labor-intensive work that goes into hiring talent. According to Human Resource Executive, AI has enabled a candidate-led process. With AI tools, potential employees can apply online and take an assessment. Based on the results, they receive an interview to complete in real-time.
According to CNBC, companies are adapting their hiring processes to support remote recruitment. 58% are now using social media networks like LinkedIn to connect with potential hires. Why social media?
- Social networks can increase candidate engagement. It can also communicate your company culture through pictures, videos, and employee testimonials.
- Tools like LinkedIn Talent Insights can help you determine where to focus your recruiting efforts. It shows areas with short supply and lots of talent competition. It also reveals places where supply exceeds demand.
Preventing turnover starts with finding the right fit employee. These top hiring practices will help you save time and avoid costly mistakes.