Similar to the real estate market where there are buyer and seller markets, in the recruiting world there are employee and employer markets. With the upturn in the economy and the baby boomers starting to retire, talent is limited and it is now an employee market in highly specialized fields of professional services. As more baby boomers continue to retire and leave the workforce, the labor shortage is expected to continue to grow.
Talent acquisition and retention is particularly important for professional services (PS) organizations because they are “people businesses.” It goes without saying that for these firms to succeed and grow they depend upon good people that have the knowledge and skills to drive performance, productivity and profit. They are the key to achieving a competitive advantage. So doesn’t it make sense that firms spend a significant amount of time identifying and implementing meaningful ways to attract, manage and retain good talent?
One way for firms to approach the problem is by addressing three key questions:
What are you doing to keep your best talent?
How much revenue are you losing per year through attrition?
What will happen to your firm if you don’t address the issue of talent retention?
What are you doing to keep your best talent?
There is a misconception among employers that most employees leave to earn more money. In reality, most employees leave because they feel they are in dead end positions and no longer growing and moving up to more challenging roles within the organization. This feeling of stagnation leads to attrition which directly impacts company profitability.
How much revenue are you losing per year through attrition?
Typically, it costs between 90% and 200% of an employee’s salary to replace them. When you calculate the cost to hire and train people only to lose them through voluntary attrition, the cost can be staggering. What’s particularly worrisome for most organizations is the risk of losing senior staff who are the face of the firm and have a loyal client following. You cannot afford to have these employees leave when it can be prevented. Remember, your talent is being targeted every day by your competitors.
What will happen to your firm if you don’t address the issue of talent retention?
Companies with great reputations and strong cultures are able to attract exceptional talent. People want to work for them, so it gives them the ability to be incredibly selective. At the same time, these companies know exceptionally talented people are also ambitious and have high expectations. Therefore, these companies know they must double down on their efforts to keep their staff motivated and inspired so they want to stay. Great projects, good tools, career planning, training, and mentorship programs are some of the ways they focus on retaining their talent. They identify their top talent and frequently and openly acknowledge them as top performers. Organizations that succeed in talent retention have very skilled, very experienced people which in turn leads to higher billing rates, higher customer satisfaction and higher profitability for the firm.
If you don’t address the issue of talent retention it will be the opposite. Your best talent will begin to leave first – taking all of that experience and knowledge with them. This situation can easily snowball and negatively impact your project performance, billing rates, customer satisfaction and profitability. Therefore, it is important to address the problem immediately. Identify why staff is leaving: what challenges are they facing and what is making them leave? Take what you learn and build a strong talent management plan – one where your people are front and center, invested in and want to stay for a long time.
This post is based on the just released book, Deltek Special Edition, Talent Management for Dummies. For more information, contact us for a copy of the book here.
Make sure to register for the remaining webinars in the series
June 16 Finding Qualified Talent Fast
July 21 Retaining Top Talent
August 9th Investing in Your People
September 14 Leveraging Technology to Manage Talent
Brilliant HR is aware of the difficulty of locating talented professionals, especially in such a dynamic economy. As we progress into a time of modern achievement and collective transformation we strive to offer the same technology-driven services for your recruitment needs.
Brilliant HR focuses, not on short-term solutions, but rather on developing a long-term strategy to automate, streamline and optimize your growing workforce. Utilizing the latest in Applicant Tracking Systems and Interactive Dashboard Technology, Brilliant HR is now offering the capability to transform your Recruitment Processes into an Efficient and Configurable Service with endless capabilities.
Your New Applicant Tracking System will provide you with:
More qualified job candidates
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Your Personal Applicant Tracking System can be quickly and easily adapted to fit into your organization today!
Recruiter efficiency takes into account several of the metrics already covered, but really comes down to how effective a recruiter is at finding the most qualified candidate in the shortest amount of time, and ensuring that they are someone who will not only accept the company’s offer, but will become a valuable asset to that company.
The following factors should be considered to determine one recruiter’s efficiency versus another:
• Open requisitions assigned to them
• Pending requisitions
• Requisitions on hold
• Requisitions in approval
• Requisitions filled
• Average days to fill
A successful recruiter will know the best sources for each requisition, will be able to realistically portray the company’s needs, and provide the organization with employees that will become top performers and contribute to a high retention rate.
We hope you have enjoyed the Top 10 Recruiting Metrics Series. A successful recruiting strategy depends on the quality of people that are hired, and this starts with identifying areas of weakness having visibility into these important metrics.
A company is only as successful as its employees, which means that recruiting builds the foundation for either the success or failure of every organization. In the words of Lawrence Bossidy from GE, “I am convinced that nothing we do is more important than hiring and developing people. At the end of the day you bet on people, not on strategies.”
Once you have found the perfect candidate for a job, it would be nice to assume that the candidate also believes the position at your company to be a perfect fit for them, but this isn’t always the case.
Some reasons a candidate may not accept your offer could be the salary you have offered them, or perhaps they received a better offer somewhere else, etc. Companies should not expect to have every offer accepted, but they should aim for around 90 percent. If they can’t reach this goal, they may need to look more closely at the reasons behind the declined offers.
Some things your organization can do to improve your offer acceptance rate are:
• Compare your salary offers to industry averages and adjust accordingly
• Try including a signing bonus for high-level positions
• Include salary requirements in the screening questionnaire to fast-fail candidates who will not match your offer
Typically, if the offer acceptance rate is low, it means the company may need to have more realistic expectations for their open positions.
“Qualified applicants per requisition” is a good indicator of the effectiveness of your sourcing channels. This takes into account not simply the total number of applicants for a position, but the number of quality or qualified applicants. One source may produce hundreds of applications, but maybe only ten of them actually made it beyond the screening questions or minimum requirements. The way that you determine what a qualified applicant means will vary based on the specific requirements that you establish for each requisition, but it is important to establish an average over all requisitions for a specific time period. Ultimately, qualified applicants are the ones that matter and the ones that you will want to keep in contact with for future opportunities.
