Welcome back, for those of you just joining us, my name is Amanda Hammett and I’m known as the millennial translator because I help companies attract, retain, and engage top millennial talent while helping millennials to develop the communication and leadership skills that they’re going to need to run corporate America in the not too distant future.
Now, since this is such a prevalent and pressing issue and it’s actually increasing in corporate America every single day, I decided that I needed to share some practical and actionable advice just for you and even better. It’s all free in this video series.
Recently I was working with a company that was facing close to 40% turnover rate every single year, 40%. That is huge and extremely draining on your bottom line. Now that’s draining for two reasons. One, Sherm actually estimates that it costs a company approximately two times the yearly salary to replace an employee, but actually, that number goes up depending on how long the replaced employee had been with the company.
Because when an employee leaves, they actually take something with them called corporate knowledge. It’s all the little bits and pieces that they’ve learned over the years that they’ve been there. Now, even the most motivated and competent new employee just does not come in with the same level of corporate knowledge. It’s an automatic learning curve, so you’re missing out on that as well.
And the second reason, according to a study published by the Journal of Applied Psychology, the relationship between total turnover rates and organizational performance is significant and has a negative impact on profitability. So what do you do to combat employee turnover? Well, actually it’s easier than it sounds.
Now what the example that I mentioned earlier, the company that had the 40 percent turnover rate every single year, the first area that I looked at as I usually do with any company but especially one with high turnover rates, is I take a look at their hiring process and I get really into the nitty gritty because the fact of the matter is if you don’t hire the right people to start with, you can’t expect to turn those bad hires into high performers. It’s just not going to happen.
Now, most companies have what I like to call the warm bobby hiring methodology. They look at a few specific skills on someone’s resume and as long as the candidate has those skills and can make a semi-decent impression during the interview process, they’re going to get the position.
However, in most cases that hiring methodology needs to be completely reexamined, especially in the new economy that we’re in. It is even more critical today that an employee be a cultural fit for your company and for your specific team because skills can be taught for the most part, but if someone has all the skills they needed for a job on their resume, but they just don’t fit with your team, you’re setting yourself up to be the leader of another short term higher, but you’re also setting yourself up for the possibility of causing internal strife on your team and we all know if there’s drama on your team are in your department, that means productivity levels are going to bottom out.
If you’re interested in getting a download with the three questions, you absolutely must ask when hiring new employees, click on the link below. It’s free just for you and don’t worry, I have one more video coming your way in just a few days. See them.