How Businesses Can Deal with High Turnover Rates

Turnover. It means extra time spent hiring and recruiting. It means losing productivity while training new hires. It means low employee morale and strain in your organization.

High turnover is a disease to your business. If left untreated, it can bring an organization down.

How high is high turnover? Well, that’s up to your situation. Turnover rates vary by industry. In some industries a 20 percent turnover rate is too high, while in others high turnover is normal. In the restaurant and hospitality industry, for example, a turnover rate as high as 56 percent is quite normal.

But no matter what your industry, no business can succeed without a steady flow of reliable talent coming in and a reasonable flow of talent going out.

Let’s just say it: high turnover is a result of bad hiring practices. If your business is suffering from turnover problems, you need to take a close look at the mistakes you’re making in your hiring process. Maybe HR is getting comfortable and lazy. Maybe hiring processes are poorly defined. Maybe hiring processes were never defined to begin with!

Whatever your situation, we can agree that your hiring process needs some revision. Here are a few steps you can follow to nail that process down just right:

  1. Understand What You Really Need in a Candidate

This step might sound so obvious you’ll be tempted to skip it. You might be thinking something like, “Of course I know what I need in the right candidate! It’s obvious.”

You’re absolutely right about that. It feels obvious. But let me ask you one question: have you ever known anybody who made the wrong hire because the candidate felt so right? Someone who aced the interview but turned out to be a dud.

Happens all the time, right?

You can get what you want in a candidate—if you define what you want, in detail. Know your minimum requirements, your ideal requirements, and any potential dealbreakers. Your hiring process will be about setting the parameters that will allow you to filter out all the candidates that don’t live up to your standards.

  • Identify Which Core Competencies the Right Candidate Must Have

Obviously, you want a candidate who has the skills to do the job. But if your goal is to reduce turnover, you need more than that.

You need to think hard about soft skills. You need to think hard about culture fit. You need to think hard about the mix of personalities in your office and what personality traits a candidate is going to need to fit the environment.

Listen: it’s great that a candidate has the skills, but that’s not enough. They also have to be able to thrive and stay engaged in your office environment.

That means you have to know more than just general company values: you have to know the group dynamics and atmosphere in the office you’re hiring for.

  • Come up with the Right Interview Questions

Once you understand the type of candidate you’d ideally like to have, it’s your job to develop a set of questions that will identify the person who has those qualities.

There are different methods for developing these questions. One of the common methods is to ask behavior-based questions. This is where you ask the candidate how he or she dealt with a novel situation in the past. An example of a behavioral-based question would be, “Tell me about a time you worked with a difficult customer.”

Remember: the goal is to come up with the questions that select for the precise set of skills and core competencies you’re looking for. That can be trickier than it sounds.

  • Make Your Hiring Process Objective

This might come as a shocker, but sometimes hiring managers will hire people just because they’re likeable. Maybe they don’t have the skills and maybe they’re not a good culture fit, but they charm their way into the position.

Sometimes things work out great when that happens. Sometimes it’s a disaster.

That’s why it’s important for your hiring process to be as objective as possible. One way to do this is to rank candidates from one to five on each of the core competencies you’ve identified. (Board interviews are a good way to do this—each interviewer can rank each candidate on a different set of competencies.) This process will increase the objectivity of the process and increase your odds of getting the right candidate.

  • Talk to an Expert

Like anything else, sometimes it pays to bring in an expert. Hiring can be a challenge in the best situations, and under the pressure of high turnover it can be extremely difficult. Consider getting in touch with an expert who works with these kinds of problems on an everyday basis—such as a professional executive recruiter.


Jeff Audette

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