Most employers are well aware that employee turnover costs them dearly. A 2013 study highlighted just how serious this problem can be by showing that the direct costs of replacing an employee can be as high as 60 percent of their annual salary.
High turnover rates also adversely affect customer satisfaction, productivity and profitability, so the total costs of turnover can range from 90 to 200 percent of an employee’s annual salary.
Effective employee retention strategies can certainly address this problem, but what about employees who just aren’t very committed from the get go?
Proper screening practices can and do take some of these applicants out of the running, of course, but considering that most people present the best version of themselves on their CV; it’s not always easy to tell which applicants are planning to stick with the company for the long haul.
To tackle this issue, psychological scientist James A. Breaugh of the University of Missouri recently compared the job turnover rate of 414 recently hired employees to their job application information.
Interestingly, he discovered that the information available in most job applications can indicate whether someone is genuinely interested in working for a company and even predict how likely they are to quit. It’s all about knowing what to look for.
The following three pieces of information were found to be particularly useful for screening applicants. They could help organizations significantly cut down on hiring costs and improve their productivity and profitability.
1. Reapplications
Hiring someone with a strong interest in working for your company is important because it means they will be less likely to leave. However, can you tell the difference between an applicant who wants a job and the one who wants this job?
Of course, one way is to ask an applicant directly by using questions like “Why do you want to work for us?” or “Where do you see yourself five years from now?” . However, it’s not always easy to measure the truthfulness of answers to such questions.
Looking at whether someone has reapplied for a position, on the other hand, can tell you a lot about how motivated they really are. Only 19 percent of the re-appliers in Breaugh’s study quit after 240 days, whereas a whopping 51 percent of the first-time applicants quit during this time.
2. Employee referrals
Applicants who have been referred by current employees are less likely to quit than those who have been recruited in other ways, such as through a placement office or online application.
Why? For one thing, they tend to have more realistic job expectations because the referee was able to provide them with an accurate view of what the company is like.
Unlike other new hires, they already have a relationship with someone at the company. This can also help them feel more job embeddedness. Moreover, current employees are unlikely to refer someone unless they think that person possesses most of the skills and attributes required for the job.
In Breaugh’s research, 31.8 percent of employees who had been referred by current employees quit after 240 days. For non-referred employees, this was more than 50 percent.
3. Employment status
Past behaviour is the best predictor of future behaviour. An applicant who has done several short stints with different companies will generally be seen as a riskier hire than one who has been with the same company for five or more years.
However, it’s not always possible to measure someone’s motivation based solely on their work history. For instance, a recent graduate simply won’t have much experience yet, and although a short stint with a previous company might indicate a lack of motivation, it could also be down to layoffs or personal matters.
On the other hand, someone who already has a job will naturally be more selective when applying for new jobs. Therefore, it’s likely that they will have higher level of interest in your specific company than someone who is currently unemployed.
In the study, 66.7 percent of unemployed applicants had quit after 240 days, compared to only 33.3 percent of employed applicants.
“For recruiters and organizations, the results of this study demonstrate the potential value of using personal history information on job applicants as part of the hiring process,” says Breaugh.
He notes that using this information during the hiring process is something that most organizations can and should be doing. However he also cautions that sensitivity needs to be exercised concerning whether certain information makes it more difficult for members of certain groups to be hired.
In short, the next time you’re sorting through stacks of job applications in your quest for the perfect candidate, you can save yourself some time and find the truly motivated applicants by simply checking if:
a) they’ve applied for a position with your company before,
b) they come recommended, and
c) they’re currently employed.
