Hiring and Keeping the Right People
By: Rich Kramarik
There are few things in business more
important than hiring the right people and keeping the right people. Without the
right people, no amount of money can make a company succeed. Recent business
trends point out clearly how having lots of money alone cannot create success.
Many managers feel they have too much work
to spend their time interviewing potential employees. If you have this
attitude, you need to realize that there are few things more important to your
success than having competent people to support you. With the wrong people, you
cannot do your job well and will find your business or your career is
short-lived. With the right people, you can move ahead and you will have a team
that supports your success.
What can you do to ensure you hire the
right people? First, recognize that you need to understand the demographics of
the person you want or need. This means discovering if there is alignment
between the person and the job as it relates to tenure, education, position, job
location, industry experience, job difficulty, marital status and many more
variables. This is to say discover if they are a match to your need.
Second, you need to peel the onion on what
your demands are in terms of the person’s fit in the company. These are things
expectation of working style. Are you a hands-on or hands-off manager? Do
you want copies of all the emails your staff sends or do you only want to
see the really important ones? Do you come in early or stay late – do you
expect your staff to act the same?
expectations of company’s culture. Do you expect people to work at home, in
the evening or on weekends and/or holidays? Do you expect people to dress in
suits or is casual OK? Are people expected to compete with each other, work
independently or to work together?
expectations of the job position. What is the official job description of
the position you are hiring? For each skill, duty or requirement listed in
the official job description, estimate how much time the person will spend
using each one.
expectations of the person who will fill the position. Will the person work
closely with others on your team? Are there certain weaknesses on your
existing team that you expect a new person to fill? Do you enjoy different
personality types in your staff or do you want everyone to be the same way?
Fig 1: Hiring and keeping employees requires different focus
and strategies before and after the hiring action.
Why New Hires Leave in Less Than 12
The job of recruiting a new candidate does
not just end by signing the offer letter. The real effort actually begins after
that. What is today bringing many companies to become aware of this often
ignored and overlooked fact is the growing realization that employees quit
within the first two-three months of their recruitment, which is often termed as
“honeymoon period” in corporate circles. The failure of an employee to stick
around can damage the company in many ways. More energy is spent in damage
control and motivating the rest of the employees. These three to four months
translate into the salary of an employee who has left. With the cost of
recruitment on the rise and the cost of replacement even higher, smartly
managing employees during their early tenure has become a key retention
Fig 2: Employee satisfaction drops sharply after joining the
company and then grows steadily if management builds a sense of belonging
Some companies have now implemented new
retention strategies. They have started looking at managing the first 90-100
days as the most critical period from a long-term retention perspective. They
are becoming sensitive to the knowledge that the first few months can make all
the difference between an employee who has long-term commitment and the one who
could soon explore other options. But even more importantly, this period can be
the most critical one in determining the comfort level of these employees with
the company, the quality of relationship between both and the time it takes for
the new recruit to start becoming productive.
Fig 3: A new employee’s satisfaction with salary is highly
correlated to employee commitment (1).
On average, between three to four months
salary of the new employee is the cost of hiring. This includes direct costs as
attributed to salaries of interviewers, overheads, fees to consultants,
subscription to e-jobsites, etc. This is exclusive of productivity, time loss,
costs attributed to client interviews, etc.
After recruitment, the approximate cost
involved during the first two-three months is approximately 1.5 months salary of
the employee, including direct costs on activities like induction, project
orientation, processes, team bonding, personal development plans, skill
upgradation, etc. The level of position and skill sets determines this amount,
which varies from case to case.
The first three months are very critical as
they determine the employment longevity of employees or their commitment level.
It is the time when the individual forms an opinion about the organization in
terms of its culture, sense of belonging, difficulty of the work, the work
environment, the organization’s truthfulness in describing the position and
The period, therefore, differentiates
between the converts and the non-converts, i.e. those who believe in and are
optimistic about the strengths and future of the company and those who will soon
seek a way out. If the first 90-100 days in the company have been good for the
employees, it is likely that they would stay on for longer period. This time is
also the most important to acclimatize new recruits and helps them in
understanding the organization’s work culture and values. There is a direct
co-relation between acclimatizing and productivity.
Fig 4: A new employee’s satisfaction with working conditions is
highly correlated to employee commitment (1).
Experts highlight the importance of
understanding the significant factors that determine the failure or success of
an employee during the first two-three months, in order to design the right
programs for them. Some of the top factors determining the failure or success of
an employee during the first two-three months include:
Handholding at project /department level
Healthy interface between dependent support departments
Work culture /healthy environment
Administration/finance related amenities
Easy life/work conditions affecting indirectly like
transportation, residence, etc.
Another focus area for companies is clear
communication regarding responsibilities as well as defining career path for the
recruits. The focus is to ensure that the employee has a well-defined role and
responsibility, long-term career plan with measures, development plan which
clearly details “how” and “when” and match personal aspirations and
organizational needs. Employees need to see value adds in the form of career
progression, salary, and involvement in the organizational development process
Another critical factor is to pay as much
attention to softer issues like workstation, meals, transportation, general
friendliness, as the attention paid to the training and skill set enhancement
In summary, the success of employee hiring
and retention is highly dependent on the clear focus on company needs and
environment prior to hiring and the implementation of a focused new hire support
system for the first 100 days after the hire.
(1) Feinstein, Andrew Hale, “A
Study of Relationships Between Job Satisfaction and Organizational Commitment”,
Research Paper, University of Nevada
Hiring and Keeping the Right People Case Study
By: Rich Kramarik
We have a couple of stories to share with you this month.
The first is an accounting firm. This firm has 8 employees and
revenues of three million dollars. This firm had been experiencing a problem
with turn-over. The CEO was using good interview techniques and involved other
members of the firm in the interview process. In a couple of cases clients were
used to interview the candidates. This firm was using every bit of good
judgment and process to screen candidates. But, yet they experience a high
level of turnover. The reasons were all over the map. In one case the new hire
just was not as productive as expected. In another case the new hire just
didn’t get along with clients. And, in yet another case the new hire was very
argumentative with other employees.
We worked with this CEO and could not find any substantive
changes that we thought would help. We started looking at how new employees
were introduced into the firm and how they were trained and supported. We found
that the nature of the business was the problem. This firm did contract
accounting services and by the nature of the business new hires were out of the
office and working in the client offices immediately after hiring on. Through
interviews we discovered that the employees were uncomfortable and felt
disconnected as they “got thrown to the wolves.” We work with the CEO and new
support plans and work procedures were implemented. As new employees came on
board, they were assigned a “buddy” who worked with them at the client location
half the time. This helped the new hire get comfortable with both the client
and accounting firm. The “buddy” was also responsible to “train” the new hire
in the office for two weeks before the new hire went out to client locations.
This was not dead time, but rather on the job training working on client work
but at the accounting firm’s office. The CEO also implemented one-on-one
coaching sessions with new hires that were held on a weekly basis for the first
90 days of employment. These coaching sessions were to help orient the new hire
to the company culture and they were used by the CEO as a safety valve or
venting session. The CEO found these coaching session invaluable in helping
both of them to resolve issues before they got out of control and became
commitment reducing concerns. The result of the new approach is that the CEO
has not lost a new hire for nine months now. This is retention that is already
longer than the past experiences.
A second situation is an engineering firm with 20 employees and
ten million dollars in revenues. The CEO said he was loosing his employees to
competitive firms. He said he was tired of training new hires and then loosing
them. With the permission of the CEO we interviewed several employees – both
new hire and long term employees. We found some interesting environmental facts
that pointed to the problem. We heard that employee expectations were not being
met. The employees felt that they didn’t have adequate equipment and materials
to perform their work. They also felt that there was disparity from employee to
employee in the quality and capabilities of the equipment that the company made
available to employees. We heard that employee assignments were constantly
changing and that client demands often were accepted by management and the
implications were longer work hours and lost family time. We heard much more,
but this is enough of an example to show the problem. These items alone point
to a poor work environment, but that was not the problem. These employees said
that during the hire interview process the CEO made statements that led the new
hires to believe they would have state of the art equipment. They said that the
CEO said they had a culture of working a 40 hour work week. These employees
also said that they had talked to friends who were working in other companies
and that the environment was much better.
The CEO said that demands from clients and fear of loosing
business were driving some of his actions. He also said that poor revenues
lately were impacting his ability to spend on equipment. Our CEO was also
surprised to hear that his competitors were providing a better work
environment. We helped this CEO implement some changes that have helped with
his attrition problem. He did some work to script his interview questions and
comments about the company. This helped him avoid his enthusiastic descriptions
about the company that tended to overstate the real situation. We helped him
put plans in place to stage the purchase of new equipment. He was able to
schedule work hours in staggered sessions that allowed some sharing of the new
equipment. The biggest change the CEO made was to share more information with
the company employees on the business environment and to implement a more open
listening style. This CEO is working hard to change these company culture
issues and the results so fare is that he has not lost any employees since he
started this new focus.
In summary, our clients are getting our help to get their focus
on working “on their business” rather than working “in their business” and when
they do – they find excellent results.
Brought to you by:
Bob De Contreras
RTBA | Cary | Greensboro | Raleigh | Research Triangle Park | North Caroliina
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