With all the discussion and emphasis that employers give to the topic of retention, it is important to recognize that the most critical step in retaining employees comes before the hire itself. Good leaders commonly state that they surround themselves with the best people. In turn, high-performing business cultures are fueled by employees who deliver productivity, innovation, and profitability. But first, an organization needs to view and understand its job candidates as individuals, rather than as simple resumes. Recent survey results from Business 21 Publishing reveal that 78% of HR executives said retention was at or near the top of their priority list; only 5% said it wasn’t. However, only 20% of companies are taking proactive measures to ensure that their best people stay put. The alternative is employee turnover, which costs organizations billions of dollars per year—an estimated 1.5 times the salary of each employee who has to be replaced. For example, a store manager making $70,000 plus an additional $25,000 in benefits (industry average according to Salary.com) would cost approximately $142,500 to replace.
Although retention is a key metric of hiring success, it remains elusive. A good hire fits well within the organization’s culture, and the individual’s abilities are properly aligned to their job-specific role within the organization. This alignment results in the individual’s being engaged and contributing to the bottom line with productive work. A bad hire saps the bottom line as hiring managers must restart the hiring cycle—wasting time, money and productivity. Journalist Leslie Taylor writes in a recent Inc. Magazine article, “Aside from the actual cost of hiring and training new employees, turnover can also contribute to customer service disruption, declines in morale among remaining employees, and loss of ‘corporate memory.’”
The turnover phenomenon is complex, and no single activity will be “the” solution to reducing it. However, there are aspects of turnover that organizations can indeed control. Looking beyond the resume and employing the crucial tools of talent selection—namely, assessing an individual’s abilities, skills and personality—are critical measures that take place before an employee ever joins the organization. According to a recent report entitled Pre-employment Testing and Assessments: What is the State of the Art? by the Aberdeen Group, employers are using skill tests and behavioral assessments to determine the ability of an applicant and the likelihood of his success in the organization and position.