The 10 Minute Talent Rant is live. I’m James Hornick joined by Jeff Smith and we are on the clock. The 10 Minute Talent Rant is our ongoing series where we break down things that are broken in the talent acquisition and hiring space, maybe even pitch a solution or two. Before we dig in, all of our content can be found on talentinsights.hirewell.com. This week’s topic, are you ready, Jeff? Yeah, let’s just retread another dumb thing. Episode 86, “We Never Fixed the Retention Problem.” Nope. So, this is one where I don’t like predicting the future, but we’re kind of doing that a little bit in this one. Let’s start with an analogy here.
Those of you who are homeowners, congratulations, by the way. You might feel like you’re stuck in your house. So admittedly, this is a bit of a high class problem, but if you bought a few years ago, or my case over a dozen years ago, you got locked in on a really good interest rate before there are all the hikes.
I’m at like 2.5% on a 15 year or something insane. You realize that moving to a new house is an insanely bad move right now because all of a sudden everything’s more expensive. Interest rates are way higher. For me personally, if I try to move in, I’d be paying literally double per month what I’m paying right now.
And a lot of other people in that situation, pretty much every homeowner in the U.S. is in that situation. Even if you felt like you had to. Yeah. Yes. So, bringing this up, and we’re going to come back to this analogy in a bit. It’s the exact same phenomenon that’s keeping a lot of people in their jobs right now.
And I think it’s propping up retention to make it look better than it actually is. And when you look at short and long term retention, there’s a huge disparity. So the flip side of that is people who are new to their jobs right now are bouncing at a way higher rate than the OG workers at companies who are hanging on for dear life. Yup.
So here’s some stats. Only 38% of new employees, these folks under 6 months plan to stay- this is data from the candidate side. They plan to stay at their organization for 3 or more years, 38%. 66% feel included at their company and that’s a 4% drop from 2022 and well below the 73% of all other employees.
37. 9% of employees are leaving their jobs within the first year and 2/3 of those within the first 6 months. The basic storyline here is the alarm bells are ringing, right James? Yeah. What’s weird is that quitting is also on the decline. So while everything Jeff just said is true, 2023 resignations are down 12 percent from 2022.
Yeah. So, that one specifically from the Wall Street Journal. Now, obviously you have to point out the fact that so many people were laid off last year, it’s also part of the explanation. But when you take these kinds of different statistics, like what the hell is going on here?
Yeah. Yeah. Everything feels disjointed. So the first piece is all off. If you microclimate it, they doubled in Q1 of 2024 versus Q3 and Q4 of 2023. That is in and of itself, incredibly alarming. So we noticed over the past few months, a lot of the customers, a lot of our clients that we’re talking to expressed a lot of frustrations with these newer employees bailing in their first year.
Sometimes like the data says, it’s right away, sometimes it’s at the year mark. But inevitably, there hasn’t been enough investment on both sides to make it worthwhile. As you said, it’s difficult to quantify these sentiments. We don’t want to go too far overboard in making these facts, but where there’s smoke, there’s fire. When you keep hearing it over and over again, it’s a different- the vibes are there.
Yeah. So we went and looked at our own placements. People who left their jobs within the first few months. Just from our data, effectively doubled in Q1 of 2024 versus that 2023 average, like the stagnation period. It’s still low in the single digit representation, but it’s still relevant. And I would say, I feel obligated to mention that Hirewell provides a guarantee. We don’t leave customers holding the bag if somebody vacates their role within the guarantee period.
Important fact to throw out there. Yeah, yeah, yeah. We surveyed, one of our leads in our Go-To-Market practice, who services sales customers, she said that she had multiple fall offs in January of this year. Now, we did a lot more volume, which it’s going to help that number move along.
But it’s a bigger concern the last three months than we’ve even had in the last five years and we think it’s because two reasons. It sounds like companies, our customers are paying very close attention to what our guarantee period is. Generally speaking, it’s a 90 day guarantee. The company’s feeling pressure to make decisions on their human capital up or out quickly, which probably lends to a lot of the bad vibes that are out there in the corporate sale landscape right now.
It’s a massive pressure cooker. So it’s happening at all levels of all types of clients. And that pressure has to be pushed down to that candidate far more quickly than we’ve ever seen before. The second piece correlated to that, that’s making these candidate populations and these employee populations anxious
and turning them back into candidates. So, see all the data above. The PTSD of the pandemic has fully settled in. People aren’t taking the company’s word anymore that they’re going to invest in you long term. A better offer comes around, they’re definitely going to entertain it. And the hiring managers know it because newsflash, they’re doing the exact same thing.
Yeah. Next point. Next thing I want to kind of cover here, onboarding is still a mess. So talking about this or building on this, I should say- when things don’t pan out, there’s two reasons. Now we all know, we’re all adults here. Sometimes bad hires happen. Sometimes it’s the candidate’s fault.
Sometimes it’s the company’s fault. Sometimes they mutually just made it, like they got into a marriage that just didn’t make any sense. Yeah. But the other one is poor onboarding. Sometimes a great fit, someone that should be a great hire, like it just gets butchered by a subpar first impression.
And there’s plenty of data about this. Got more data in this special. Gallup had a study that showed only 29% of new hires feel supported and prepared enough to excel in their job. 29%? 29%. That’s abysmal. Yes. OC Tanner, only 43% of employees report they received an onboarding process that lasted longer than a day.
I mean, is it even- here’s your binder. Good luck. Yeah. Yeah. New world of work, 37.4% of HR professionals find remote onboarding to be a main challenge and filling a job position. Now, 37.4% sounds low but the hard part should be finding the people to fill the position. If a third of the time, the problem is like we found the right person but we didn’t know how to do anything once we got them. Like that’s kind of an issue. That’s like the no brainer part. Yes, all that time and effort for one third of your placements to be messed up because you didn’t know what to do once you hired them. But on the flip side, if done right, work Institute.
Employees who have positive experiences in their first 90 days at a company are 10 times more likely to stay. And Bamboo HR, employees who receive effective onboarding, feel 18 times more committed to the organization.
First impressions, telling people, first off, just greeting people, welcome them to the organization, giving them the lay of the land, helping them understand the culture, what it means to be successful, what support you have for them, what kind of training you have for them, where to go when they need help. All these things seem like they should be so basic, but companies are butchering it left and right, and it’s causing just a drastic amount of churn in the first year.
Anyway. Yeah, the 1st impression is everything. You said it. We harp on candidate experience nonstop for this exact reason. Just what we’re seeing. Again, there’s the data. Here’s the anecdotal stuff. We smaller companies without, you know, pre established onboarding performance structures, HR strategy, we get it. You’re struggling with cash resources. The struggle is real. I feel for you. We feel for you. There’s a lack of time and accountability regarding onboarding. And that, to your point is just, that starts to make your new employees, that festers that concern. That in turn freaks managers out because it’s like, oh my God, they’re not like totally bought in. I’m freaked.
Like I don’t sense that they’re all in on this job. And then all of a sudden animosity starts from, to your point, day one, day two. Everyone is burned the fuck out. That’s the too long didn’t read. The folks you just hired are probably leaving a dumpster fire. Now they’re being onboarded by a decimated HR talent team.
The new hires picking up on those vibes within the first day or the first couple of hours and the anxiety wheel starts to move again. It’s also not easy to onboard people remotely, like you just said. It’s far easier to do it on site. We’re not standing for return to office in any way, shape or form, but it’s just a fact.
If there’s no intentional plan to get these folks integrated into your specific culture, they are 10 times more likely to fall off. Yeah, the TLDR on this, candidates aren’t going to put up with a shitty situation when they start. Employers aren’t going to put up with difficult employees because they know, and they think it’s an, or at least they think it’s an employer’s market.
Candidates think it’s easy for them just to delete the two months stint they had and start all over again. We’re seeing that constantly. People who are constantly, we’re seeing it all the time now where people like the resume doesn’t match the LinkedIn or that changes and doesn’t even account for, it’s just, everyone’s just exhausted.
There’s not enough runway for anyone at this point. Yep. Side note, this is exactly why industrial manufacturing is our biggest growing team. It’s why it’s our most stable. You know, funny enough, companies that actually make tangible things are so hot right now, as Hansel says. It’s been a while since we had a Zoom and a reference.
Let’s go back to salary data and the real estate market correlation I was talking about before. So to give you some examples here, so tech is our- tech’s been our bread and butter for 20 years. We started out as a tech recruiting firm. And if you go to the data, the data says that tech salaries are still going up, but I can tell you they are not.
They are 100 percent not. Yeah. Sometimes you look at, I talked about this a couple of weeks ago, but sometimes you can look at data and you feel like just, it’s just gaslighting you or maybe you’re questioning the reality. Case in point, comp analyst, which is salary.com’s upgraded tool-
it’s pretty accurate. It’s usually pretty accurate. I decided to look at, because I wanted to do some studying into maybe do some writing about kind of tech salaries and what’s happening there. I looked at DevOps, product managers, Java developers, different levels and it was telling me that salaries were all two to four percent higher, depending on which position, which level in 2024 than in 2023.
Which was strange. Because meanwhile, in our slice of reality, we’re looking at probably the most depressed tech market I’ve seen since the dot com crash, to be honest with you. We’ve got laid off devs who are totally okay with making 10 percent less than they were making before. I’ve heard the phrase, “I feel lucky to have a job lately” more than I can count.
I haven’t heard that in forever. I mean, I’ve heard it in the pandemic. Specific to tech people too. Yeah. Specific to tech, even during the pandemic tech people were okay. Yeah. So my first instinct was, this is all bullshit, somebody fudged the numbers. But if you can piece, if you haven’t lost your mind, you can piece together data, very different- like these things can coexist. You can see data like this and you can also see your anecdotal kind of personal experience and you realize they’re actually measuring two very different things.
So we’re just not seeing continued salary inflation like the number suggests. Jeff, why is that? Yeah. So salary tools survey everyone who is working currently, right.
Recruiters like us are looking at everyone who is switching jobs and getting new salaries right now. That’s the big, that’s the key difference. So a few deeper points, people are less likely to leave jobs especially if they know that they’ve received their big bag in their last few years, which is absolutely what has happened. They got to hold on to that house like anyone who owns a house.
Yep. Cost of living or yearly merit increases are still happening in companies who are doing really well and that actually contributes to some of the archive data from comp analysts. And unemployment doesn’t factor into these numbers at all. Yeah. Anybody who was let go- yeah. Yeah. So salary data, it’s always backward looking from like whatever the not last recent survey is.
Like most of this stuff compiles quarterly, you know, as it relates to comp analyst. It could be months, quarters, half a year old. It’s never real time. So again, it just reinforces this fact that people who have high salaries right now, literally are trapped in their job and contributes to the growing disconnect between short and long term retention.
So some takeaways. Number one, we mentioned it before, recruiting experience matters. The experience that a candidate and then new employee has during not only the recruitment phase, but the onboarding phase must be solid. Exceptional is nice. Solid is mandatory. But you have to follow up on bare essentials. You have to give actual feedback during the interview process.
You have to send information when you say you will like an offer letter or a benefit summary page. Don’t say you’re going to send it before the weekend and then send it Wednesday, the next week, bad experience. Smile during onboarding or virtual, more than likely. It matters! These things go a long way in helping those first early vibes go well.
That was Jeff Smith saying you should smile more. Second takeaway, long term retention and just a reminder, it’s being propped up by salary disparity, higher current salaries and lower new market salaries. And if we’re being honest, fear. There’s people who are fearful of after seeing all the layoffs and what’s out there and was glad to still be making a paycheck.
That’s not going to hold. Promise you that this is going to flip at some point, things are going to normalize and you’re going to want to get your onboarding and your retention figured out before that happens. Yep. The great summation is everything can’t be the candidates fault. It’s never going to look good in the long run when this flips. Those vibes are going to matter and
you know, when you’re doing your exit interviewing, your post onboarding surveying, whatever it is that’s helping you understand what went wrong that time. Just make sure you’re fixing it the next time around. And we are short on clock. I think we just set a record. We just passed the 16 minute mark. Just beloviating around. Thank you for tuning into the 10 Minute Talent Rant, part of the Talent Insights series, which is always available for replay on talentinsights.hirewell.com as well as YouTube, Apple Podcasts, Google Podcasts, Spotify, and Amazon. Jeff, thanks again as always. Everyone out there, we will see you soon.
