The number of job openings have reached a 15-year-high, according to the Bureau of Labor Statistics. In fact, there are an estimated 15 million active job postings on LinkedIn alone. With so many postings online, it can be a challenge for yours to stand out—especially...
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Most everyone is familiar with the fun, “crazy” culture at famous tech companies like Google and Facebook. Napping pods, comfy lounge spaces, game rooms, free food, and putting greens are certainly a diversion from most corporate environments. It’s common for startups to take a new approach, after all, there are certain risks associated with being different that commonly pay off. There are times, however, when this is not the case.
In early February, CEO and founder of Zenefits, Parker Conrad, resigned from his position at the Human Resources software startup. The underlying cause? According to newly appointed CEO, well-known Silicon Valley entrepreneur, David Sacks, “Our culture and tone have been inappropriate for a highly regulated company.”
Recruiting has changed. The advent of so many startups, a new generation of workers, social media and technology, have all changed the game. Not only has the way we go about crafting job descriptions and posting roles changed, but even the start of the recruiting phase now begins well before a position is actually open. With everything that is evolving within talent acquisition, what hasn’t changed is that better recruiting leads to lower turnover and a lower cost per hire.
Consequences of a Bad Hire – Beyond Turnover Cost
This recent study shows the average cost per hire to be at $4,000. But what is the turnover cost per hire if they’re bad hires? Turnover costs are estimated to be one-third of a new hire’s annual salary or more in order to replace them. However, the consequences of making a bad hire go beyond this. There are other costs as well, such as reduced morale among employees, disruption to a department, slower production, an increased workload, and depending on their position, the potential of lost sales or customers.
There are a whole host of factors that contribute to employee turnover; boredom, low pay, lack of recognition, limited advancement opportunities, dissatisfaction with management. However, one of the largest reasons for high turnover, 80% according to a statistic by The Harvard Business Review, is due to making a poor hiring decision in the first place.
It may appear that your new employee has made the final decision to join your organization the moment they accept your offer, when in reality, the majority of the time, an employee is still making that decision up to six months after they’ve begun working for your company.
This study, sponsored by The Society for Human Resources Management Foundation (SHRM Foundation), found that half of all hourly workers leave within 120 days, citing issues with onboarding and training as one of their largest reasons for job dissatisfaction. Replacing employees is not only time consuming, it’s costly, and causes lost productivity. Additionally, high turnover can do long-term damage to company morale.
Companies seeking to be an employer of choice recognize the value in creating an engaging company culture. A large part of that engagement is a high-quality onboarding process. Onboarding is no longer doing paperwork for a few hours on a Monday morning. Employers of choice understand that onboarding is an ongoing part of an effective recruitment and retention strategy. For true engagement, employees both new and seasoned, need to be a part of the Plan. They need to feel like they understand organizational goals, how sales affects the overall success, and how their role contributes to the organization’s success.
We don’t usually blog about HR news, but this was news that we had to share.
Less than two weeks after reporting that Yahoo! Chief Executive Officer, Marissa Mayer, had announced she would not be firing anyone “this week”, The New York Post reports that the head of the tech pioneer has proceeded to not only fire someone, but accidentally so, to the tune of approximately 30 employees.
While a Yahoo! Spokesperson claims this to be a rumor, and completely false, inside sources told the New York Post that Yahoo! had begun to compile lists of lower performing employees whom were never intended to be terminated.