Maximising new hire retention to offset skills shortages

Realising value from hiring by reducing new hire turnover

The talent gap continues to drag on the growth prospects of many businesses, including the expansion aspirations of many recruitment agencies. It’s one thing to fill the funnel with active and passive candidates, but quite another to work through them and arrive at the point where someone is actually hired.

After all your effort, and your clients’ expending considerable amounts of money, the last thing anyone wants is for new talent to resign early on. Your agency’s clients need to realise value from the candidate selection process by choosing the right people.

However, there are many factors that determine what ‘right’ actually looks like. Ability to do the job; interpersonal skills; team-player; and cultural fit are usually high up the list.

With fee structures for new recruitment often indexed to new hires successfully completing probationary periods, it is essential that those who have a higher probability of throwing in the towel early on are identified and managed appropriately, should they complete the selection process.

In short, there is a need to ensure that choosing the ‘right’ candidates considers the issue of retention. Here are some of the top indicators of new hires either not completing probationary periods or resigning early on after taking up a new position. 

Key factors influencing new hire turnover rates

• Long and expensive commutes – commuting time is perhaps the most important factor in shaping a new hire’s ideas about whether the job works for them. Travel costs – whether for public transport or road fuel – have always been prime considerations for commuters. However, with the current Cost of Living crisis, there is heightened anxiety, especially as prices could increase further, with extortionate rates baked in for years to come. Covid has rewritten the rules for many businesses and workers, and where fully remote or hybrid working is offered for a particular role, the impact of commuting on retention is of course reduced.
• Gaps between job ads and real jobs – of course with recruiters looking to entice scarce talent in a market with a significant amount of unfilled roles, overselling can always creep in. When new hires discover that there is a significant difference between the job that was advertised and the actual job this can be a pretty serious deal-breaker. Usually, this will cause an immediate decision to resign because it undermines the new hires’ trust in the recruiter and the employer.
• Flawed onboarding – whether it’s in planning or execution, poor onboarding may change a new hire’s mind about a job and an employer. A weak approach to onboarding may be indicative of the overall attitude of the employer and may sound alarm bells that there may be worse to come further down the line. Perhaps before even being let loose on the job, as onboarding might lead to the early turnover of new hires.
• Poor training – as an extension of flawed onboarding, poor or non-existent training may also lead a new hire to make the decision to fold. Substituting ‘on the job’ learning where formal training is promised can also be a factor here.
  In the mind of a new hire, ditching or delaying training means they are inadequately prepared to meet the challenges of their role, ultimately detracting from their ability to perform well.
• Line manager’s with high turnover – personality and managerial style could clash with the expectations of new hires leading to an early resignation. One would hope that employers have identified and fixed the problems of those with a trend for losing new hires early on, however, effective management is measured in many ways. The talent gap means that for some employers, keeping the skills and experience of a middle manager may be the priority, even if they have some rough edges that might lead to elevated new hires turnover rates.

In the temp and contractor market, for short-term contracts retention is unlikely to be too much of a problem as many workers might tolerate any such issues, knowing that the situation is only temporary. However, for longer placements and contracts this may not be true.

Get more value from recruitment processes with ETZ

ETZ’s leading timesheet and invoicing solution, streamlines the back office processing of your recruitment agency. Our complementary solutions, ETZ Comply for onboarding and document management, and Caspian for business intelligence give agencies further capability to streamline and uncover opportunities. To find out more call us on +61 (0) 405 458 821 or book a demo.