June 22, 2021

When Employee Engagement is the Problem, Recruiting is a Waste of Time and Money

Authors:

Another employee just quit, which means it’s time to begin the frustrating process of recruiting. But even once a candidate has been identified, interviewed, and hired, there’s no guarantee they won’t leave in a few months. If they do, the process begins all over again. Why can’t we find people who will stay in their jobs?

As a recruiting firm, we commonly hear this complaint from our clients. And we get it. Constantly recruiting to backfill for positions is disruptive and costly to the organization. But in many cases, it’s not a recruiting problem. It’s an engagement problem.

Because candidates have the upperhand right now, companies tend to focus on the acquisition: getting the candidate to say yes to the job. But these companies forget the next vital step: helping the new employee feel engaged from the start, so that they want to stay.

When a company looks at the cost of replacing an employee, they usually think about recruiting fees. But once you consider the many tangible and intangible costs involved, it makes much more sense to focus on keeping employees with you in the first place.

The Real Cost of Turnover

If you’ve been sensing that a lot of employees are quitting their jobs, it’s because they are. More employees are voluntarily leaving their jobs than have in the past 15 years. Employees leave, assuming that with record-low unemployment, they’ll quickly find other employment—often with a higher salary. That quit rate is increasing, and by 2020, 1 in 3 workers, or 47 million people, are expected to tell their bosses to take the job and shove it.

The tangible costs of replacing an employee are relatively easy to assess by adding up recruiting, hiring, and onboarding costs. Some experts suggest budgeting six to nine months of the employee’s salary for these fees. That can add up quickly.

For example, Bonus.ly says that if you have a company with 500 employees with an average yearly salary of $65,000, and lose 90 employees a year to turnover, you’ll end up with an annual turnover cost of $3,000,000.

Those figures are just the visible costs. It takes an average of 36 days to fill an open position—not including time for training. Until the newly hired employee is up to speed, either the job is not getting done, or critical responsibilities are divided and dumped on the remaining employees’ already full plates. In either case, productivity is lost.

Overextended co-workers can become burned out or disengaged. As this happens, they may also leave—or worse, they may quit in place — not leaving, yet not being productive, creative or  innovative.

When long-time employees leave, they take with them valuable institutional knowledge, resulting in co-workers having to re-trace steps to solve problems. The company can also take a hit if they lose customer and vendor relationships that the departing employee established.

Considering the entire cost of employees quitting, it makes sense to find out why they leave and pre-empt that inclination.

Final Thoughts: If you’re wasting money and time by recruiting employees who don’t stay—the problem isn’t with the candidates; it’s with the company. Take an in-depth look at your employee engagement efforts, talk with your employees, and develop solutions for the underlying issues. Your recruiting efforts won’t be worthwhile until you create an environment where employees thrive.

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