7 Ways Hiring Practices Impact Employee Retention

This is a guest post by Srdjan Gombar.

What if, during the hiring process, you could tell exactly how long each candidate will remain in your employ (if hired)? By analysing your retention and resignation process, you may reach some conclusions that could help you recognise this immediately. 

With this information, you could improve your hiring practices so that you hire only those with the highest potential retention rate. It’s very clear that hiring, retention, and resignation are all steps on the same path, so you need to leverage them to improve an entire system. 

Here are 7 ways in which hiring practices impact employee retention.

1. Hiring people who are a good cultural fit

If you hire people who are the right cultural fit for your enterprise, you’re increasing the chances that they’ll remain in your enterprise for much longer. Sure, this complicates your selection process, but it gives you a higher chance of achieving brand consistency. 

Not only that, but they’re more likely to be more engaged, committed, and motivated for their work. If a candidate believes in the same causes that you do, you won’t have to incentivise them in extra ways to give their best; they’ll do it by instinct and have an intrinsic motivation to do so.

Since you will also select the rest of your staff this way, your employees will have a higher chance of getting along with their coworkers. They’re likely to feel a heightened sense of belonging and have an easier time seeing your enterprise as where they belong.

2. Testing for speed as a proxy for competence

It is useful to test for speed when hiring new employees. There is a considerable difference between a specialist and a layman. Sure, someone who is a beginner at carpentry could probably make something as simple as a shelf just as well as a master carpenter, but how long would it take the novice? 

This is why if you’re recruiting for a position that involves quite a lot of writing, be it technical writing or more general business writing, you might want to look for a free speed typing test and include it in your hiring process.

There’s nothing more frustrating than the feeling that you’re not up to the task or that your skills are mismatched. By avoiding this scenario with your new hires, you’d have already increased the chances of a higher employee retention rate. On the other hand, people whose skills are well-matched with their roles feel a higher sense of accomplishment. This makes them perform their jobs more effectively. 

Of course, it is also essential to look out for the person's potential - with the right support and training, your new recruits could have the potential to develop beyond the level they demonstrated at the hiring stage. 

3. Using resignation letters and exit interviews to improve your hiring practices

A resignation letter is not just a formality. In many scenarios, even when an employee uses a resignation letter generator, they offer some vital information. For instance, they may explain why they quit. If this is something that you can fix, you have a fantastic opportunity to improve your enterprise.

Now, rather than relying on resignation letters that are often generic and usually aim to part ways in the most polite matter possible, you should also conduct exit interviews. If you play your cards right, you may learn more than you otherwise would.

You can start by saying that while you did hope that they’ll stay in your enterprise for a while longer, leaving jobs is a normal part of someone's career cycle. Then, try to make them more comfortable and explain why their answers to your questions are essential for the company.

This way, you can begin to understand the reasons for which many employees leave your organisation. This knowledge can then be integrated into your decision-making process while hiring. 

4. Set clear job expectations

Some employers promise too much to attract top talent. If they do, they see their mission as accomplished, regardless of how many talented individuals remain employed after a year.

The problem is that one of the most frustrating moments in the workplace is when someone constantly invents new tasks for you to do, pretending that this was your duty all along. Quite often, this will happen without any kind of raise or promotion. In other words, you’re just getting more work for the same money/authority.

Hiring managers should also bear in mind the importance of onboarding for one’s overall experience in your company. They say that you can never get a second chance to have a good first experience. If your new hires struggle to grasp their tasks, they’ll have a harder job getting onboarded in your organisation. People who feel empowered from the very start will feel like they’re in a place where they belong or a place where they can shine; they’re less likely to leave.

5. Fair and competitive compensation

Even if you offer the worst possible conditions and terms of employment, some people will still apply. The problem is that these people either:

• don’t have other options available, or
• don’t plan to stay in your company for long!

Both these scenarios are pretty bad for your enterprise.

Remember that if you’re offering low pay, the talent you’ll attract is of much lower quality. Your turnout will also be a lot lower, so you won’t have that much choice. You’ll scrape the bottom of the barrel, hoping to find that one applicant that’s not as bad as the rest.

Also, the turnover of your staff will be quite bad. They’ll leave when they find something better, and you must repeat this hiring cycle. Just bear in mind that the hiring process may be quite expensive.

You ought to ensure that your pay is competitive with the rest of the field, and you should take inflation into account when offering pay raises. Look at industry averages and try to keep up or stay ahead of the average.

6. Opportunities for growth and development

Everyone has long-term goals. Hiring someone if you don’t see their development in your company will ensure that they leave fairly soon (and for an obvious reason).

When hiring an individual, ask yourself - where would I love to see them in five years? Do you have a position that you can promote them to? How fast and far can they gain rank, and how much can you increase their salary until you hit a cap on this? You can see approximately how long you can expect them to remain employed in your firm by answering some of these questions.

Ambitious and capable employees won’t tolerate a position in which they remain stagnant for too long. Now, while ambitious and capable employees are not all of your staff, they’re the most productive ones and those whose loss would hurt you the most.

Sometimes, just a promise (or a prospect) of growth and development can make one stay far longer than expected. It’s up to you to provide them (and make good) with this promise.

7. Positive employer branding

It is important to consider what your employer branding is like, that is, what is the impression of what it’s like to work in your company. People talk, which means that branding isn’t just about marketing. 

If you’re known for a positive work environment or as an enterprise that goes above and beyond for its staff, you won’t have a big problem attracting top talent. 

With the right employee branding during the hiring process, you can ensure that your future employees have a much higher opinion of your brand. This way, you’ll get more maneuvering space even in times of crisis and uncertainty. 

Once you start taking employee retention and resignation into consideration, your hiring practices will become far more effective. Understanding why people quit when they did, what made them stay or leave, and more should be included in your next hiring process cycle. This way, you’ll make your hiring process more efficient and always get the maximum value from the lifecycle of your new hires.