The importance of finding the right employee from the start may seem like common sense, but is there a smarter way to reduce the time and money you spend hiring staff?
The answer is data, according to Greta Roberts, chief executive officer and co-founder of Talent Analytics.
Roberts says data can illustrate and even predict employee attrition, or “employee churn”, and can save your business enormously in the long run.
“Employee churn is actually extraordinary expensive,” Roberts tells SmartCompany via phone from Boston. “When you actually graph it out and look at it analytically, you see the massive amount spent on on-boarding, finding staff, training them and a lot of a manager’s time.”
Roberts’ team at Talent Analytics has collected data from a wide range of companies across the globe and they’ve shown – much like customers – it is much cheaper to retain an employee than it is to find a new one.
A 2008 study showed Australian employers were losing $20 billion per year on staff turnover.
Roberts tells SmartCompany how basic data analysis can bring employee churn to a grinding halt in five easy steps.
“Do a lot of work up front and think, ‘what does this person need to do when they get here?’” says Roberts. “Not whether I like them, not what university they’re from or what degree they have. But what do you need them to do?”
Roberts says humans are typically biased and employers tend to think that if they like someone, then they’re going to do well, regardless of their skills. “Liking someone doesn’t necessarily relate to how they’re going to do in the job.”
She says employers, especially SMEs, need to make sure everyone in the company is in agreement about what the employee should be doing in the role and avoid giving mixed messages about the role’s function and requirements.
Roberts says employers should start collecting data about employees straight away. She says start and finish dates are important to record, but so are performance quality data and the motivation staff may have for leaving.
“As much as possible, try to understand why they’re leaving,” she says.
Roberts says it is important to give employees the opportunity to say why they’re leaving in a comfortable space, so that you can track any emerging trends. She says methods such as surveys will often yield better information than exit interviews because employees don’t feel as immediately uncomfortable about leaving.
It is important to quantify an employee’s performance as unbiasedly as possible, says Roberts. Whether or not you liked them is irrelevant to how successful they were in the role.
“Take an analytics approach. You’ve got to compare apples with apples,” she says.
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Kirsten Robb is a former journalist at SmartCompany. Previously, she worked at News Corp as a property reporter for Leader Newspapers and the Herald Sun, and holds a Masters of Journalism at Melbourne University.
