Why It Pays to Invest in Your Employees Beyond Recruitment
In today’s ultra-competitive jobs market, companies spend huge amounts of money finding, attracting, and hiring top talent. Yet once their new starters are through the door, they spend comparatively little on their engagement, training, and retention. Why?
It seems that candidate engagement trumps employee engagement. But this makes no sense. All that money you invest in finding the perfect person for the role goes to waste if you fail to invest in their journey as an employee. Before you know it, they’ll be handing in their notice, and you’ll be back to square one.
The true cost of recruitment
There’s no getting away from it, recruitment is a costly business. If you use an external recruiter, you could be looking at paying up to 25% of a successful candidate’s starting salary. You can avoid this by handling recruitment internally, but then you’ll need a dedicated recruitment team, with all the associated costs.
Then there’s the cost of posting on popular jobs boards, not to mention the ‘hidden’ costs of reduced productivity that come with unfilled positions and high turnover.
While these costs may be eye-watering, they are necessary. With talent in short supply, your business is in direct competition with countless others to land the right candidate, and that means at least matching their reach and visibility. As jobs become even more specialized, recruitment will become even more competitive.
Of course, there are ways to get more out of recruitment for less. For instance, modern technologies can automate recruitment processes, allowing you to improve the candidate experience while freeing up resources. But generally, recruitment will always be an area that requires a good deal of strategy, investment, and patience to get right.
Despite this, perhaps the biggest drain on resources is not the cost of recruitment itself – as we have already said, this process is essential to the successful running of any business – but the fact that businesses often fail to back up that level of investment once candidates become employees.
The retention game
According to research by Mental Health America, 70% of US employees are thinking about and/or actively looking for a new job. Take a moment to consider what that means for your business, with over two-thirds of people looking for a way out.
Why is this happening? Well, there’s no doubt that times are changing, and people no longer expect or even desire a job for life. But despite the cultural shift towards shorter tenures, it is clear that employee disengagement is a major driver of high turnover.
It seems that businesses are quick to spend big on recruitment, but often fail to back this investment up through effective employee engagement strategies. We push the boat out in wooing candidates, then drop them on their heads and expect them to simply get on with it. Inevitably, all the good work in landing top talent quickly comes undone.
This starts the moment new recruits are onboarded. We often give them the bare minimum of information they need, then send them on their way and expect them to hit the ground running. Yet according to research by MIT Sloan, it takes between eight and 26 weeks for new starters to reach full productivity, depending on the complexity of the role.
This is a critical time, when employees are still forming an opinion of their new company. If they don’t receive the help and support they need right from the start, chances are their opinion will be negative. And once employees have formed a negative opinion, it’s very hard to turn things around.
Really, new starters need more than a day or two’s onboarding. They need ongoing support, feedback, and even mentoring to help them get up to speed. You could argue that the first 90 days in a job are the most important – most people know pretty early on whether they’ve made the right decision or not. And given that more than 25% of all US workers have been with their company less than a year, that’s a lot of people making up their minds.
While those first few months are critical, it is important that you invest in your employees throughout their employment journey. The modern employee doesn’t want to standstill. They may not expect promotion after promotion, but they certainly expect to be constantly growing and improving their skills.
There are no two ways about it, learning and development costs money. But like all thing relating to employee engagement, these costs should not be seen as a drain on resources, but rather as an investment – and the whole point of an investment is to reap the rewards at a later date.
By investing in your people through learning and development, training, and mentoring programmes, you are likely to save money in areas such as recruitment. After all, engaged staff are more likely to stick around.
Ultimately, one company’s retention issue is another company’s recruitment issue. Or, in other words: if you fail to engage the staff you fought so hard to recruit, not only will you lose out when they move on, but one of your competitors will benefit!