While it’s every business’s objective to minimize employee turnover as much as possible, for small businesses, the effort expended in advertising, interviewing, hiring, onboarding, and training an employee is a significant investment. It’s estimated that the cost of replacing an employee is one-fifth of a worker’s salary, and that’s not factoring in the productivity losses that result when an employee leaves.
For the health of the business and its employees, hiring for long-term success is key. Here are a few considerations that can help you land the employee and keep them there.
Perfect the job description
If you want to hire the right person, you need to write the perfect job description. Being meticulous in how you write up the job description will weed out those who aren’t qualified for the job, and narrow the scope of candidates who apply.
Try and be as specific as possible in your description of the job, the duties it encompasses, and the attributes the right candidates will have. Also, attract applicants by listing the perks of the job, and describing the culture in an appealing manner (without over-selling).
Research shows that a referred hire onboards faster than a traditional hire and stays at their job longer than a traditional hire. Creating a great referral program can add incentives, such as awarding a bonus to the employee whose referred hire makes it past 90 days on-the-job.
Additionally, a study by JobVite found that 46 percent of referred hires stuck around for at least one year after they were hired, compared to the 33 percent of people hired through career sites and 22 percent hired through career boards. This is a great alternative to enlist the help of recruiters, which is more costly.
Interview with care
Once you’ve decided on the most suitable applicants, interview with care.
According to the Society for Human Resource Management’s Human Capital Benchmarking Report, the average cost-per-hire is $4,129, and the average time it takes to fill a given position is 42 days (compared to 29 days for a referred hire according to Jobvite).
Hiring costs money and time, so finding one person who can perform well and last is crucial. This discussion should yield intelligible information about the applicant’s fit for the position, so screen your applicants thoroughly to determine if they have the experience and skills to do the job, and the interest to invest in the company.
Make compensation fair and competitive
If it’s your objective to attract talented and motivated professionals, when it comes time to discuss finances, you’ll need to make compensation fair and competitive.
Job seekers arrive prepared to talk about themselves, so you should be prepared to talk about what they’ll receive in return for their services, including compensation, benefits, and PTO.
The first and foremost reason people work is to earn a living and provide for their loved ones, so money is the biggest motivator for accepting employment. You don’t have to have a big budget to pay within the job’s market value.
You never want a job at your company to be accepted as a placeholder until your new hire finds a more rewarding role.
However, most employment relationships are at-will, which means your new hire can choose to leave whenever they’ve found a better opportunity. Knowing this, it’s vital to evaluate your company from the eyes of an outsider and what it has to offer, whether it’s benefits, culture, or perks.
If you present a positive company image and build an attractive company culture from the ground up, job seekers will gravitate towards your company and be highly motivated to stick around.