Herman Trend Alert: Retention Begins with Recruiting

A recently released study from The Bernard Hodes Group provides evidence of a belief that we at The Herman Group have long held -- that employee retention begins in the recruitment process. The Hodes 2007 Workplace Study holds that two factors are critical to retaining valued employees. The first is choosing quality people, not settling for "warm bodies." The second is choosing people who have long-term expectations of staying with the organization.

From “Herman Trend Alert,” by Roger Herman and Joyce Gioia, Strategic Business Futurists

GREENVILLE, SC — A recently released study from The Bernard Hodes Group provides evidence of a belief that we at The Herman Group have long held — that employee retention begins in the recruitment process. The Hodes 2007 Workplace Study holds that two factors are critical to retaining valued employees. The first is choosing quality people, not settling for "warm bodies." The second is choosing people who have long-term expectations of staying with the organization.

In our research for the book "How to Become an Employer of Choice," we found that people want to work in organizations that have quality people. When employers make inferior quality hires, often they will inadvertently lose current employees who now no longer feel valued.

Fifty-three percent of the people responding to this survey were passive job seekers, so engaging these employees to determine their needs can help shape a company’s retention efforts and keep valuable employees with the company. This high percentage of passive job seekers leads to the suggestion that "stay interviews" or re-recruiting (and perhaps even re-orienting) long-term employees will be a worthwhile investment.

The study also cites what we have been saying all along — that employee turnover, regardless of industry, is expensive. Some reports even show the estimated cost of a single vacancy for some jobs has been calculated anywhere from $7000 to $12,000 per day. According to statistics from the Bureau of Labor Statistics, the estimated 2007 annual voluntary turnover rate is about 24 percent.

Also according to the Hodes study, workers seek employers who have a cohesive workplace culture and offer benefit packages that include options such as work/life balance and flexible scheduling options. These results are similar to other studies on which we have reported recently. The top two reasons employees are looking or are open to new employment are: limited career path (51 percent) and compensation (benefits and pay) not in line with their skill sets (50 percent). As the market tightens more, expect these figures to increase.

For more about the Hodes 2007 Workplace Study, please visit http://www.hodes.com/publications/retentionstudy.asp.

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