People are a company’s most valuable asset. This is something we’ve all known for a long time, and yet companies talk more than they actually do about it.
A few years ago companies started focusing on who has the most advanced technologies in order to create competitive advantage. With time, they realised that practices and processes focusing on technology and machines were something that their competitors could easily copy.
This made them turn their focus on to something that was more difficult to copy, their people. The culture, the working atmosphere, and the purpose they provide their people with is something that can’t be easily copied by their competitors. It is something created by their people for themselves. It can be one of a kind, and it is crucial to retaining people and keep them engaged and motivated. People stay with a company when the company helps them develop a feeling of belonging.
Why Employee Retention Matters
In LinkedIn’s latest annual Recruiting Trends report, one of the four top trends is “Data”. The interesting thing about this trend is that more than half (56%) of the Talent Acquisition pros mentioned that they are using data to increase retention. This means that employers are worried about their people leaving them for someone else. They have realised how expensive it can be if employees leave the company shortly after coming on board.
Just to give you an idea, according to the Society for Human Resource Management it requires six or nine months’ salary to replace a new employee and train the new hire. In numbers, that means that if an organisation loses a manager who earns $60,000 per year, it will need to invest about $30,000 – $45,000 to find his/her replacement and offer the necessary training in order to cope with other employees’ performance levels.
Defining HR’s and TA’s Roles and Responsibilities
Now, the talent acquisition team within an organisation is responsible for ensuring that the organisation has and will have the best available talents for each specific current or future open position. They invest time, money, and efforts in order to attract talent that meets the company’s needs; talent that adds considerable value to the organisation. On average, a company needs around 42 days to fill an open position. During this period of time, TA specialists search, communicate and assess possible candidates for the position they look to fill. In case that they successfully fill the position, but the new hire decides to leave the company within a short period, that means that the TA team will need to re-invest money, time and efforts to hire a new person. Not a pleasurable situation of course, and this is what makes TA care about the time a new hire spends with the company.
On the other hand, the role of HR is to ensure that employees have the necessary practices, processes, support, benefits, and freedom to perform at their best potential, achieve their personal and organisational goals, and be motivated by the organisation’s overall vision and mission. It is an important and critical role of course, but at the end of the day when an employee will decide to leave the company for another company, HR will only need to process some paperwork for the one who is leaving and some other paperwork for the one who will join.
Comparing the two roles, talent acquisition teams are expected to be more (negatively) affected if an employee leaves the company. Therefore, the TA team has extra reasons to care even more about the employee retention. They need new hires and all employees to stay with the company for as long as possible, not only because they hired those people because they expected them to provide long-term value, but also because every time someone leaves, their workload increases. You could think of it as “personal interest”.
How Can TA Create an Impact on Employee Retention?
As TA seems to be more directly affected by the employee retention, maybe it is time to rethink the way organisations split duties and responsibilities, and transfer some of them from HR to Talent Acquisition:
- Job Crafting – by definition it is how an employee reframes theirr work, physically, socially and cognitively. It is “…what employees do to redesign their own jobs in ways that foster engagement at work, job satisfaction, resilience, and thriving” (Berg, Wrzesniewski, & Dutton, 2010).
- Real-time Training – forget spending time and money on training which requires physical presence and focuses on preparing employees for future potential situations which may never occur. People should have training opportunities available any time they may need it. This is why 24/7 access to online training from anywhere should be available for employees. They should be able to receive the training at the moment that they will need it and not when the organisation can provide it (way too early or way too late).
- Performance Management, Career Growth, and Internal Moves – Most of the companies apply at least yearly performance management tools which aim to assess employees’ performance and evaluate how it aligns with the company’s overall performance. Employees focus on improving their performance and achieving better business results. Sometimes it results in promoting employees to positions with more responsibilities, and sometimes it results in releasing employees from the company.
Well, fair enough, but let’s think a bit different and instead of laying someone off, offer them the opportunity to try their skills in a different area. Everyone is good at something; therefore, let’s assess them and based on their skills, knowledge, and performance see where they can add value to the company and then place them there.
- EVP Ambassadors – employee value proposition is the unique set of benefits which an employee receives in return for the skills, capabilities, knowledge, and experiences they bring to the company. If you create a unique set of benefits which will be appreciated by your employees then you automatically make your employees EVP Ambassadors. You will not only increase employee retention but at the same time, you will help the company attract even more talents. That said because people like to talk about things they enjoy, if you make them enjoy their time at the company, they will spread the word about the positive working atmosphere you provide them with and more people would want to join it as well.
To conclude, employee retention is an issue which keeps employers awake at night. It is something that can create disruption in the way an organisation works, and people leaving the company can result in huge costs for the company.
To avoid such disruptions and costs, it is time to shift responsibilities within the HR department and make accountable for employee retention the HR sub-function that really cares about it and that is directly affected by its consequences. Talent acquisition teams have more reasons to care about employee retention, and maybe it is the time they becomes responsible and gains full control of the practices and process which focus and aim at increasing employees’ retention.
Cover image: Shutterstock
This article first appeared on Undercover Recruiter on the 5th of February, 2018.
Talent Acquisition (TA) is on the cusp of a new wave of innovation and the 12th Australasian Talent Conference will be shining the light on it – say hi to Artificial Intelligence (A.I.). Find out more.
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