Your Turnover Will Double Unless You Improve Your Hiring & Selection Process

hiring processALERT-Your Turnover is About to Double Unless You Improve Your Hiring Process

Storm: (noun) A violent disturbance of affairs.

A storm is brewing.   A perfect storm. And you don’t have to live in a hurricane zone to know it’s unwise to ignore the warnings. What is this “perfect storm”? It’s a tsunami of increased employee turnover, and you better be prepared. We’re losing and hiring workers like never before—and not for the reasons you might suspect.

Consider the following:

Until just this year, the number one reason employees left their jobs was because of an “unskilled manager.” (Gallup, February 2017) That is, they quit because they didn’t like the boss. This is no longer the case. Other reasons, like seeking better pay and benefits or being dissatisfied with the company culture are two other reasons cited, but not number one. For the first time in 40 years, the number one reason for employee turnover is lack of training, development and career options. So while you can’t control the weather, knowledge is power. And now that we’ve identified the problem, we can set about brainstorming for solutions.

Problem: The skills gap

The skills gap is a threat to American growth and competitiveness. That is, there exists a mismatch between the needs of employers for skilled talent and the skills possessed by the available workforce. While millions of Americans are unemployed, and millions more are underemployed or have dropped out of the workforce, businesses increasingly report they can’t find the skilled workers they need.

How many times have you said or heard a colleague shout, “I just cannot find good people!” Indeed, there is a shortage of the kind of quality workers you’re looking for. In manufacturing alone, more than 75% of manufacturers report a moderate-to-severe shortage of skilled workers, and the problem is expected to grow. If left unaddressed, the skills gap could cause more than 5 million positions to go unfilled by 2020. And his problem will only escalate. First, more Millennials enter the workplace: It’s estimated that 50% of all workers in America will be Millennials by the year 2020. Gallup’s 2016 How Millennials Want to Work and Live report revealed that 21% of millennials — more than three times the number of non-millennials — switched jobs in the last year. Gallup also found that only half of millennials strongly agree that they plan to be working at their current company in one year. Gallup also estimates that millennial turnover due to lack of engagement costs the U.S. Economy $30.5 billion each year. Is your company going to take advantage of this opportunity or be a victim?

Concurrently, approximately four million Baby Boomers are retiring each day, resulting in a shrinking workforce! The Tsunami is already here, and next year will be worse.

A recent survey found that 92% of executives believe there is a serious gap in workforce skills. When you consider the fact that, 51% of U.S. employees say they are actively looking for a new job or watching for openings, (2017 Gallup Workplace study) you can see it’s a real conundrum. But I will show you there is a way out.

If you’re not already convinced, here’s more proof:

Employers are paying a premium for today’s skills gap, including lost revenue and productivity:

  • Forgone revenue and profits can be as high as $23,000 per unfilled position, while turnover costs can range from 20% – 210% of an employee’s annual salary. (CareerBuilder)
  • Mid-sized manufacturers alone report more than 11% loss in annual earnings or $4.6 million annually because of the skills gap. (Accenture and the Manufacturing Institute)
  • Because of ineffective associates, 43% of employers failed to achieve key financial targets, 40% had a reduced ability to innovate, and 37% were unable to start a major project or strategic initiatives. (Chartered Global Management Accountant (CGMA) )

The skills gap is also reflected in the experience of students and other job seekers: The value of postsecondary training and credentials is not what it used to be, considering the rising costs of education; extended periods of time to secure degrees with foregone earnings; and a wide variation in return on investment.

  • Only 36% of full-time students enrolled at four-year research universities graduate in four years, while 19% of full time students at other universities earn a bachelor degree in four years, and a shocking 4-5% attending community colleges earn an associate degree within two years.
  • For those who do graduate, nearly 54% of bachelor degree holders age 25 and under are either unemployed or underemployed. These uneven returns from postsecondary education are symptomatic of a serious disconnect between employers and education and training providers.
  • Finally, only 11% of business leaders say they are confident that college graduates are well prepared for the workplace, while a full 96% of chief academic officers of colleges and universities report being somewhat or very confident that they are preparing students for success.  (Reported by U.S. Chamber of Commerce Foundation 2014)

Problem: Retention

As illustrated above, it’s getting harder to find good, qualified employees—and keep them—despite what we hear about the unemployment rate. A Department of Labor study found that, when it comes to Millenials, the average twenty-something will have 10 to 14 jobs by the age of 38. Wow. That represents tremendous turnover. The skills gap coupled with workforce overturn presents a real challenge to companies today –for who can afford to lose employees with such frequency?

The skills gap inevitably leads high turnover; in other words, a crisis of retention. But there are other factors relating to retention that are at play. For example, it may seem obvious that you need employees who are engaged in their work. But have you really hired employees who are a great “fit.”? Are they truly engaged? The impact is illuminating: According to a 2016 poll by Gallup, companies that embrace engagement can expect 59% less turnover, in addition to 41% less absenteeism, and 17% higher productivity. And that’s just one example regarding the importance of having and keeping satisfied, loyal, engaged workers.

The question remains, are you hiring the right people?

Turnover is the business consequence of not having a top-notch hiring process; you suffer the high cost of turnover—in terms of both time and money, poor quality and reduced productivity—when your hiring and selection system is not very effective. Selecting the right talent requires discipline, and is both art and science. With the right tools, the right process, you can find the right people.

As the #1 rated Business Advisor in North America for four consecutive years, countless CEOs have sought my expertise to identify and help solve a wide range of business challenges. As a response to this present crisis—which has the potential to radically change the direction of your company—I have designed a powerful and proven set of solutions guaranteed to ensure the security of your company’s future. And your livelihood.

What follows are a series of strategies, that in combination are guaranteed to significantly improve your chances of selecting high performers to join your company.

Prior to recruiting:

  • Keep a very accurate and updated job description for all positions.
  • Conduct an annual compensation analysis to ensure you are offering a good or at least above average compensation package to any top candidate.
  • Put your best face forward: Create an engaging and dynamic website, which will improve your chances of attracting top talent.
  • Conduct an annual confidential employee culture survey, you may be surprised why people stay and why some people are disengaged.
  • Design a well-developed exit interview process to collect more data about why people are leaving.

Preparing for the interview:

  • Make a list of the top four and secondary 5-8 SMART performance responsibilities, as described below. These will be the eight performance standards that set the bar for what a top performer is expected to deliver:

S– Specific   M– Measurable   A– Achievable   R– Realistic   T– Timebound

  • Train/coach and mentor every associate involved in the hiring and selection process.
  • Remember that associates should be one of your top recruiting assets. Are they?
  • Integrate your company values into the hiring process.
  • Require your hiring manager of the department or team where the new candidate will be assigned to attend the interview. Fit between manager and associate at all levels is essential to the final offer.
  • Devise a scoring system to determine who makes the cut and invited to come in for a live first interview. Follow the identical process for all candidates.
  • Customize the interview questions for each position. Never simply use an old list of questions for all candidates, as each position require different skills and experiences.
  • Prepare a list of the top-ten benefits of working for your company. Consider providing written testimonials from your staff. Specific examples of why people like working for you may be found in your annual culture survey.

The Hiring Interview:

  • Begin with a phone interview to filter possible candidates. Only strong candidates may proceed to the next step in your interview process, usually a first live interview.
  • Conduct a 60-Day Hiring (Step-One) Assessment Pilot. Consider using an assessment tool during all interviews for a 60-day pilot. The assessments would be used for all candidates that pass the first live interview. For a small fee, the assessment will provide information about whether candidates are honest, their attitude toward drugs, whether they are likely to be dependable, and whether they are likely to work hard.
  • Consider using an assessment tool during all interviews for a 60-day pilot. The assessments would be used for all candidates that pass the first live interview. The assessment will provide information about whether candidates are honest, their attitude toward drugs, whether they are likely to be dependable, and whether they are likely to work hard.
  • Confirm that you have the candidate’s permission to contact their current and/or former employer early in the interview. This strategy improves the likelihood that the candidate will respond honestly to your questions.
  • Always use behavior-based interview questions. For example: “Please give an example of a time that you ___________? Followed by, “What was the impact of your actions?” Then, “What did you learn from that experience?”
  • Ask what they know about your company. You may find they did little or no research. Their answer will reveal whether or not they are committed to your mission, or simply looking for any job.
  • Consider using scenario exercises. For example, if decision making is a critical skill for a specific position, provide a scenario that is slightly confusing, and missing some facts. Give them a limited time to devise a game plan, which will reveal their thought process, how they behave under pressure and their ability to make good decisions. Listen for their approach to engaging others and/or their approach to collaboration.
  • Consider inviting candidates behind-the-scenes for a “day in the life”. Let them experience the noise, the culture, the people, the sights etc. This strategy can often times weed out candidates that are simple not a good fit.
  • Don’t make the mistake of overselling your company. At first, let them do most of the talking.
  • Use videos to help educate and bring your company to life.
  • Depending on the positions that are open, bring executives and or the founder of the business into your process at some point.
  • Take the candidate on a specific tour of the building, plant or work area where they will be working. Afterwards, ask the candidate: What did you observe? What did you learn?
  • Ask the candidate for questions at the end of the live interview. Pay close attention to their thoughtfulness.

Post-Hire Interview:

  • Say thank you! Mail a card after live interviews or an email following phone interviews within 24 hours. Make a note of which applicants follow up as well.
  • Track your process. Monitor what steps in your process are working and which steps or results need improvement.
  • Ask your hiring team what would they do differently if every new associate hired could never be fired. i.e. associates for life!

Again, these solutions will require discipline to design and implement effectively. Keep in mind it takes practice to perfect your hiring process, and you and your associates may need additional assistance.

My Talent Management System includes nine specific systems focused on the “People” side of the business. To sustainably grow, you must master each of these talent systems- or else, they are your;

  1. Recruiting system
  2. Hiring/selection system
  3. Onboarding system
  4. Training/development system
  5. Accountability system
  6. Compensation system
  7. Promoting talent system
  8. Leadership development system
  9. Measure culture system


So, if you are truly determined to “weather the storm,” but unsure about going it alone, contact me:

John Lankford

John Lankford was recognized as the 2007-2010 Associate Business Advisor of the Year in North America and brings proven executive experience and best practices to select companies every year. He served 18 years at the Executive Education Center at Ford Motor Company and is former Senior Director of Ascension Health Learning Institute. John has developed top leaders around the world in partnership with the University of Michigan Business School, the Center for Creative Leadership, Comcast University and GE University, to name a few. His business expertise has been tapped by prominent business media such as the New York Times, CBS and Dbusiness magazine and has been a syndicated business columnist. He is the author of The Answer is Leadership and Superstar for life…Career Transitions. John’s keynote speaking has landed him on the elite team that trains and certifies the new Executive Coaches joining the worldwide coaching community. John is also former Chief Executive Officer of the Innisbrook Leadership Institute. Lankford can be reached at [email protected] or call (888) 730-1950

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