A good hire is, as the saying goes, worth its weight in gold to your company’s bottom line.
With this in mind, you may be tempted to let an average or below-average employee walk out the door and search for a better replacement.
That sounds good in theory, but turnover can mean bad news for your organization. (The better approach, of course, is to hire the right person the first time. Every time.)
Why? Employee turnover drains significant amounts of time, money and resources that are better spent elsewhere.
What does turnover mean for your company?
For a job compensated at $75,000 per year, the cost of replacing a single employee can be as much as 21 percent of the employee’s salary.
And that’s just for lower-paid positions. Higher-paid jobs and executive positions can cost even more in turnover—200% or more.
(Turnover costs, of course, encompass recruiting, training, and the lost work and reduced productivity that stems from a vacancy.)
How much of a problem is turnover?
The Center for American Progress estimates that 20% of workers voluntarily change jobs each year, and 1 in 6 are fired.
Either way, the ensuing vacancy will mean additional costs.
And if multiple bad hires are made, those costs grow from a short-term problem to a long-term headache.
The easiest way to reduce turnover—hire better
Better planning during the recruiting and hiring stages can reduce costly employee departures down the road.
One way to do that is with more thorough assessments of job candidates before they become employees. With the right assessment process, you’ll be able to identify candidates’ strengths and weaknesses… Then decide whether you’re comfortable with providing training or whether their deficiencies are simply non-trainable.
What does a robust assessment process look like? For starters, it should assess the whole person—both in the context of the job they are being hired for and what will serve them well in that role. Look for assessments that integrate cognitive and personality testing, as well as interview data to deliver legally defensible predictions of candidate success. An assessment process like this will help to ensure that you hire the right person the first time, every time—and turnover won’t have a chance to happen.
Remember—even if an average performer has the ability to excel in their target role, they may lack the motivation to move forward and upward. A good assessment system will measure important qualities like motivation, decision-making, follow-through and ability to meet deadlines.
And with the right selection process, you’ll have a more accurate idea of how employees will handle stress, solve problems and work with others—and a much better idea of who is the best fit for your organization.