Management problem or hiring problem?

One of my valued business owner friends shared a story with me yesterday.  She was recalling the day that she realized just how much turnover was costing her business.  “I was appalled,” she said. 

She began looking at how many people had come and gone from her company in the past 12 months, and she compiled a list of those people.  She then asked her managers to identify any of the people on the list of former employees that they would want to rehire if given the chance.  Guess what their answer was — none of them!  There wasn’t a single person who had left their employ that they would want to return.

This caused my friend to have a revelation — her company didn’t have a management problem, they had a hiring problem.  She immediately set out to study what made great employees great and to apply that information more diligently to her hiring process.   She looked at her advertising mechanisms, her interview process, her reference and background checking processes, her pay scale — everything to do with getting the right people in the door.  Once she identified the key success factors and developed ways to screen for those, she began to dramatically improve her hiring process and reduce her turnover.

Her business requires extensive training for associates once they join the company.  Investing in that training time doesn’t make sense if the employee isn’t going to make it long-term.  My friend found it well worth her time to invest more time, effort and money up front to get and keep the right kind of people.

How much does it cost you when an employee leaves?  Most companies never add up the numbers–but you can bet, it’s a significant figure.  If your hiring processes aren’t working as they should — do something!  Develop processes that will help you get the right people in the right places — and keep them there.

Many companies are beginning to hire again as the recession wanes and new opportunities develop.  If you’re one of those companies, now’s the time to figure out how to hire better.

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