The United States’ employee turnover rate — 3.7 percent — is the highest it’s been in a decade, and that’s bad news for businesses. Replacing an employee costs an average of 21 percent of that person’s salary. The ever-decreasing average tenure of an American employee in one role exacerbates the issue: in 2016, American workers stayed with one employer for 4.2 years compared to 4.6 years just 12 months earlier. The country is in the midst of a skilled labor shortage — 6.7 million jobs are available, but just 6.3 Americans are unemployed — meaning that people dissatisfied with their current job will likely be able to find a position elsewhere.
To avoid the pitfalls of high employee turnover, companies must bolster retention. Outsourcing talent acquisition and workforce development to expert organizations is shown to produce positive results. According to global nonprofit Catalyst, businesses can prevent 75 percent of voluntary employee turnover by addressing issues such as poor career development opportunities (cited as the №1 reason why employees quit), a deficient hiring process, , uncomfortable work environments and lack of guidance or mentorship — all of which alternative talent acquisition can help resolve.
Bad hiring decisions are to blame for 80 percent of employee turnover. The various reasonsbehind bad hires include pressure to fill the role quickly inability to find quality candidates or lack of tools to pinpoint the right person. Companies should delegate recruitment to an organization that specializes in leveraging alternative hiring methods to find and vet ideal candidates.
By outsourcing the recruitment process, companies ensure that new employees have a positive and efficient onboarding experience, which impacts job satisfaction long-term. In fact, 40 percent of employees who receive poor job training quit within a year, human resources company Go2HR found. An experienced third party provides new employees the orientation and tools needed to acclimate and do their job well. Also by offering ongoing career development opportunities, not just during the onboarding phase, companies demonstrate their commitment to the professional growth and learning of their employees, which can foster a sense of loyalty and greater retention.
On a similar note, third-party recruitment experts offer career guidance and mentorship, which is also shown to expand employees’ tenure. Mentored staff are 44 percent less likely to leave the company over five years than are their peers, according to a report from Everwise and HR.com. Some workforce development services pair new employees with a mentor who oversees the onboarding process, offers guidance as new hires take on their role and ensure the new hire and the company is satisfied.
Outsourcing recruitment allows a company to focus on their workplace culture as low morale is one of the main reason employees leave, making it increasingly vital that companies foster a collaborative and inclusive environment. A diverse staff attracts talented workers, which reaffirms employees’ confidence in the company; diversity also makes employees feel welcome, and when staff members feel at ease in the workplace, it generates open and positive communication as well as increased productivity.
Employee turnover may be prevalent and at times inevitable, but by outsourcing talent acquisition and workforce development, companies can greatly improve their employees’ job satisfaction and increase retention.
Originally posted on Workforce Weekly, the WOS blog.