Have you ever considered the cost of turnover in your organization? To recruit, select, orient and train new staff can be extremely expensive. Not to mention the opportunity cost associated with having staff in place with no organizational memory. Today’s Challenge: How do you reduce turnover?
I’ve been asked this question more than any other over the years. The reason may be our retention rate – we have historically hovered around 94 – 95%.
My answer to the question is simple – but it is not easy. I believe our outstanding retention rate is driven by the rigor of our selection process. If you get the right people, in the right role, you greatly increase the chance of the person staying with you.
Here are a few principles to help you think about your selection process.
- The more clarity you have about the role, the better your selections. Do you know what the role requires for success – specifically? If you do, don’t select anyone who doesn’t have what you need. If you don’t know, stop the interviews until you do.
- Selection decisions are too important to be made by a single person. Involve multiple interviewers whenever possible. Listen to all concerns. For years, we wouldn’t select anyone without complete agreement. We’ve lowered our standards a bit in this regard, but we still listen to everyone who interacts with a candidate.
- If you select for the long tenure, your decisions will improve. If you believe you’ll have to work with someone for years, or decades, your standards will rise and so will your retention. We know people may not work with us forever, but if we act like they will, we make better decisions.
- We’d rather lose a candidate than an employee. For decades, one of our practices has been to try and talk people out of accepting a job on our staff. If we can talk them out of it before they start, we believe they weren’t the right person to start with.
- If you don’t invest time in selection, you’ll waste time on turnover. To do selection well requires more time than some organizations are willing to invest. However, it’s a classic case of “Pay me now or pay me later.” You’ll pay less if you get it right in the beginning.
When Peter Drucker was asked, “What’s the most important decision an executive (leader) makes?” His response: “Who does what.” We believe Dr. Drucker.[GLS_Shield]
A word of caution… Don’t fall in love with retention. It’s a critical health indicator and the merits of high retention are obvious. However, if you become obsessed with retention, it may cloud your judgment when you do make a bad selection, and you will. When you realize you’ve made a mistake. Do the right thing for the person and the organization and make the hard call.