“Do you think we can retain this candidate?” is often a question posed by hiring managers during recruitment.  Employee retention has been very much talked about especially when the economy is recovering and talent war is fast taking place again.  Each time I get such questions, I’ll ask myself:

• What position do we have?
• What kind of candidates are we looking for?
• Do we have what the candidate want?
• How will employee turnover in this position affect us?
• Is it difficult to train a new employee into this position?

What position do we have?
This determines the type of skills required for the position.  Is it a managerial, executive, administrative or clerical?  It’s important for us to know this and be upfront with the candidate on the roles and responsibilities of this position.

What kind of candidates are we looking for?
This is when we look into the several categories - fresh graduates?  high-flyers?  loyal employees?  hardworking from rank and file?  worklife preference?  I noticed that loyal high-flyers are rare.  So if presented with 2 options - would you prefer the loyal employee or the high-flyers?  I’ll discuss the selection later.

Do we have what the candidate want?
If we’re planning to hire a highly efficient and ambitious graduate, do we have the career path in place?  Are there advancement opportunities?  If we’re planning to hire the loyal employee, are we ready to remain loyal to them and accept some minor flaws they might have?  Are we ready to be patient and guide them through all processes?  Most importantly, are we ready to remain loyal during the hard-times.

Is it difficult to train a new employee into this position?
The last 2 question here helps me choose between loyal and ambitious high-flyer.  If it’s going to be tough training someone into this position, I’d go for the loyal ones.  So if I’m looking for someone fairly senior requiring rare technical skills, maybe a loyal employee who seeks some worklife balance would be good.

How will employee turnover in this position affect us?
Here’s when I’d go for the high-flyers (even if I know they will not stay with me for long).  In today’s world, many employees move jobs every 3 - 5 years.  Loyalty is rare.  In fact, loyalty sometimes creates comfort and comfort zone causes organization inertia and lack of innovation.  Therefore, as managers we need to begin to realize that we cannot retain employees for life.  The best alternative we could is to hire a great person and ensure that he/she is most productive during the short 2 - 3 year stint with us (especially at the fresh graduate or entry level).

In working the final portion out, here’s some maths that I’d like to share.  Considering there are 2 fresh graduates - one highly active in extra-curricular activities and takes much initiative while the other takes little initiative beyond formal education.  I’m not trying to generalize here but the highly active one is often the high-flyer but would only stay for about 2 - 3 years in the first organization but the second is likely the loyal employee who enjoys little uncertainty and prefer comfort (in today’s world maybe stay about 5 - 8 years in the first job).

Here’s the tip - The one who takes much personal initiative probably needs only about a month of guidance and is ready to contribute quite independently while the one with less initiative may take up to 6 months (that probably explains why probation period is often 6 months).  Now calculate the rate of returns.  High flyer 1:24 (assuming 2 years) and loyal employee 6:60 / 1:10 (assuming 5 years).  The high flyer is still giving better returns although it increases employee turnover.  Point to note: some numbers may not mean everything if we do not take into account the qualitative measures.

Finally, when the high-flyer leaves and turnover increases; the least we could do is to be proud that we’ve become a “net talent exporter” when he or she continue to perform elsewhere.  Calling ourselves “training ground” because of that is something of the past.

Before anyone raises this, I’m not implying that all loyal employees are not productive, but rather trying to weigh the options when I can’t have the best of both worlds.

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Tags: employee loyalty, Employee turnover, hr, recruitment, selection, talents

This entry was posted by Clayton J.C Tan on Tuesday, January 19th, 2010 at 1:43 pm and is filed under Generation Y, Human Resources, Leadership & Management. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.