CEOs are Shifting Quickly to Retention
A company’s most valuable resource is its people. It’s an overused statement, but likely so because it’s true. Few CEOs would argue against recruiting top talent. Yet, not all top talent is a good fit. The key for human resource departments and recruiters is to find the top talent that matches the company’s needs and culture. Not every hire is a win, but that is certainly the goal.
When a company misses on a hire, there are associated costs. The recruitment, onboarding, and actual salary paid to that person are money down the proverbial drain. The process begins again with the hopes that the same mistake is avoided. With a tight US labor market employers are having to do their best to retain new hires. The 90-day rule is something being discussed in multiple industries. In summary – hold on to an employee for three months (90-days) and that hire is likely to remain over the long term.
Everyone from Wendy’s to Carrier Global Corp, CVS Health to the video software company Qumu is focusing intently on training and new programs to prevent new employees from quitting during those critical first months. The previously mentioned Carrier Global Corp has put together a buddy program where new hires are paired up with more senior employees in their manufacturing facilities. At CVS Health warehouse workers are provided a $1,000 bonus if they remain for three months. Fast-food chains like Wendy’s and Chipotle have found that clear and consistent scheduling (as opposed to last-minute weekly shift changes) has dramatically improved retention.
Most human resource executives believe that 90 days is the time when employees begin to prove themselves. The San Francisco-based software company, Intercom, put in place a novel program called the “listening tour.” New hires, regardless of their level, are requested to embark on a listening tour of the company to understand as much as possible the operations and what their colleagues do. For executives, this can stretch to six weeks while more entry-level hires typically spend two weeks. The company compares this to an extended interview process where the new hire gets a chance to gauge if Intercom is the right place for them.
TAT Limco is an aerospace manufacturing company in Tulsa, Oklahoma. After seeing new hires leaving for simple pay grades (a dollar or two more per hour), TAT hired an onboarding coordinator to manage new hire entries. More contact points between employees and their colleagues and supervisors were established and turnover was halved from 37% in January to 16% in June.
The labor market is expected to continue tightening over the coming months. Finding enough workers (and keeping them) is a strategic shift that will pay dividends beyond simply three months.
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