Skip to content

Employee Retention Part 1: Why Good Retention Starts with Hiring

In recent months, companies have experienced so much turnover that economists have given it a name: The Great Resignation. In September of 2021 alone, the U.S. Bureau of Labor Statistics reported that 4.4 million Americans—3% of the workforce—quit their jobs.
In this environment, many employers are stepping back to evaluate exactly why this is happening and how they can stop it. While the primary drivers of the Great Resignation are still being debated by experts, there are a few steps employers can take now to improve employee retention. One of the most important strategies is to hire smarter.

According to a recent report from Harvard Business Review (HBR), as much as 80% of all turnover is the result of poor hiring decisions. If companies hire employees that aren’t a good fit for a position, they’re more likely to leave. Here’s a closer look at why smart hiring matters, as well as suggestions for how to better screen candidates during interviews.

Why Smart Hiring Matters

Many employers work hard to make their companies appealing by offering things like good benefits, fair pay, commute support and transit subsidies, and other perks that promote overall wellbeing. These are all important steps that draw more candidates to your company and keep them around longer. That being said, the HBR report states that according to a meta-analysis from 2018, most drivers of turnover are more closely related to employees’ attitudes and personal life than the job itself.
For example, this study suggests that over 40% of people who leave their jobs do so because of concerns related to their overall life and career satisfaction—something far out of the control of most employers. Just under 40% were driven from their jobs due to a poor ability to cope with stress. The third and fourth highest drivers of turnover were found to be employees’ level of commitment to their overall career and to the organization—things employers can cultivate to a certain extent, but that are primarily driven by the employee’s personal attitudes about work.

Engaging employees does matter. About 20% of employee turnover is driven at least in part by low engagement. But more important than engagement are factors largely out of your control. The best way to control for those factors are to screen for them in the hiring process.

What to Ask in Interviews to Reduce Turnover

To prevent future turnover, HBR recommends asking interview questions that screen candidates for high career satisfaction, strong coping skills, and commitment to their work.
One thing to note is that a positive, optimistic outlook correlates well with high career satisfaction and, therefore, long-term commitment to your company. So, it’s helpful to ask questions that help you evaluate whether candidates have this type of attitude. For example, asking for stories of past career-related challenges can illustrate not only the candidate’s problem-solving skills, but also if they confront challenges with a can-do attitude. Inquiring about overall career satisfaction or long-term career goals can give insight into their overall attitude toward work.

Another important thing to screen for is the ability to manage stress. Of course, a good employer doesn’t put undue stress on an employee, but many roles involve stressful situations. Asking the candidate how they have handled difficult situations in the past, how they cope with stress, and if they’ve ever had to battle burnout can tell you if they would be able to thrive in your company’s work environment.

Finally, it’s key to make sure the candidate is the right fit for the job not just in terms of qualifications, but in terms of the necessary “soft skills.” Be sure to discuss the candidate’s strengths, and then consider how well those strengths match to the needs of the role. It can also be helpful to ask candidates why they’ve left jobs in the past. If the issues that drove them to leave a past job are likely to also occur at your company, they may not be a good fit.

Waiting for the Perfect Fit

It can be tempting to hire the first applicant who can do the job, especially when you’re short-staffed. In the long run, though, that approach can backfire. A candidate who’s just good enough, rather than the perfect fit, is more likely to leave, making things more difficult for you in the long term as you spend money to recruit and train yet another person.

Instead, consider waiting for the exact right person to come along. Tweaking your hiring to find perfect fit candidates can reduce future turnover and keep your company staffed with happy employees for longer.

Looking for ways to incentivize that perfect fit candidate to work for you? Stay tuned for the second part in our series on employee retention, where you can learn about growing engagement with perks like stress-free commuting and more.

More Like This