As you know, employee turnover is a major problem in the Building Services and Security Industries. It can cripple a company’s ability to grow, and it can be a cancer that destroys company culture and employee morale.
While turnover is obviously a major problem, opinions differ how to tackle the issue.
That’s why we interviewed our top clients to let us know what they’re doing to improve retention. We wanted to identify the recurring patterns from companies with the lowest turnover rates and use that as a model for success.
The first pattern we identified is a full understanding of retention metrics.
It may seem like a cumbersome task, but it’s vital to know the full scope of these metrics. Keep in mind, this is not going to deliver a quick win! You’re playing the long game by doing this. But with the ability to understand the results of your changes, you can continue to tweak until you find the perfect fit for your organization.
Top 5 Retention Metrics to Monitor
- Accepted offer to Showing Up First Day of the Job
- Does the Employee Reach 30 Days?
- Does the Employee Reach 90 Days
- Does the Employee Reach 180* Days?
- Does the Employee Reach 1 Year?
1) Accepted offer to Showing Up First Day of the Job
This is what we like to call “hidden turnover.” An unfortunate number of candidates who accept the job offer fail to show up for their first day on the job. These candidates are typically never considered in the overall retention metrics, but they cost the exact same amount to hire as everybody else! When it costs upwards of $1,000 to make a hire, it’s unacceptable to not keep track of this number. Typically if this number is low, there is a problem in your pre-hire process, which we’ve discussed in-depth in previous blogs and webinars.
2) Employees Reaching 30 Days Employment
This is another element of “hidden turnover” that isn’t always calculated in overall retention & turnover metrics - it’s possible these employees never enter the payroll system. Once again, this is usually related to the pre-hire process. Perhaps they clash with their site manager. That’s something that could be prevented in the interview process. Perhaps they weren’t fully aware of the scope of their job duties. That needs to be addressed honestly during the phone screen. The vast majority of “quick turns” result from a disconnect between their preconceived perception of the job and the reality of it.
3) Employees Reaching 90 Days Employment
If the employee reaches 90 days, the likelihood of one year employment drastically increases. At this stage, they should be fully trained and up to speed with the rest of the team. They should know all the policies and procedures and they have solid enough of footing to be comfortable in their work. Of course, this is helped by an employee engagement plan out of the gate. We’ll be discussing that in detail in future blogs.
4) Employees Reaching 180* Days Employment
We have marked this with an asterisk because this is typically the “break-even point” for most part-time jobs. The break-even point is the point in time where the profit generated by the employee meets the cost it required to hire them. For example, if you receive $2 profit for each hour the employee works, it would take 500 work hours to break even given a $1,000 cost per hire. If the employee is working 20 hours a week, you break even at just under 6 months.
5) Employees Reaching 1 Year Employment
One year’s employment is usually the gold standard. Employees that make it to one year are ten times more likely to make it two years with the company than the average employee at day zero. If you can get them to one year, it’s likely you’ll be able to get them to two years. This should always be your goal!
Over the next two weeks, we will dive deep into different ways to reduce retention. But, if you can’t measure it, you can’t manage it. This is why it’s highly important to start with a benchmark so you can identify WHEN your employees are turning and which processes should be improved.
Be sure to check out our next blog in the series around how to instill your company culture in the pre-hire process.