Investing in entry-level employees for long-term success
When organizations invest in developing a comprehensive approach to retaining entry-level talent, they can avoid the high cost of attrition. This should begin as early as the selection process, with an assessment of your job candidates’ skills, and continue throughout their employment. Retaining talent beings with offering training through educational pathways designed to hone the necessary skills for success in their role within the company.
Educational pathways can help new hires become better prepared for success and help them recognize that the company is invested in their individual development. With a comprehensive approach to entry-level training, new hires can gain the confidence and workplace loyalty that translates into higher retention rates, while the business benefits from a skilled and engaged workforce and the cost savings of a low attrition rate.
Cost savings are particularly important right now, as many organizations are feeling the impacts of the coronavirus pandemic and instituting layoffs or furloughs. However, the pandemic also offers business leaders a strategic opportunity to prepare for optimally matching entry-level new hires to skills in demand once the economy rebounds.
Employees develop loyalty to the organization because they recognize an investment in their talent and this becomes a motivating factor for them to persist with that organization.
— Leo Goncalves, vice president, Workforce Solutions Group
The true cost of attrition
For many organizations, employee-related spend is one of the largest line items in their P&L. However, businesses tend to proactively manage this cost solely in terms of the direct payroll components: Salary, benefits and all of the direct costs of employing an individual. What is often overlooked is the cost of losing and backfilling an employee and what can be done to mitigate these costs.
Replacing a single worker is equal to roughly 20-50 percent of the annual salary for their position when accounting for direct costs of hiring, training and reduced productivity during the transition. For entry-level jobs in the $40-50,000 range, this amounts to $10-20,000 to backfill a single employee. Organizations with a large contingent of entry-level positions can find themselves spending big when faced with high attrition rates. But it can also be a big opportunity, especially right now.
Now is the time to make changes
When the economy begins to rebound, companies will have a large pool of available candidates due to the significant workforce dislocation resulting from the pandemic. Even so, traditional hiring practices can be ineffective to find entry-level employees who possess all the necessary skillsets or aptitude for success. This is where the employer can play a vital role.
Take ownership by providing new hires with a preparation program that will lead to a successful first day on the job. Define the skillsets, level of understanding and expertise you are looking for in each role and plan for tiered levels of training.
For an entry-level employee, these skills may be basic. However, having a structured learning pathway alongside key milestones within the company, with the level of training and support matching the next step in their career progression will maximize the realization of their potential.
By connecting these pathways with progression milestones within the company, the end result can be increased retention of those individuals because they see the connection between the job they are doing, the learning, with potential evolution into new roles.
Employees develop loyalty to the organization because they recognize an investment in their talent and this becomes a motivating factor for them to persist with that organization. More loyalty to employers translates into higher retention rates and therefore lower operating costs.
The solution to the high cost of attrition is clear. When you provide new hires with the skills they need to be successful and to grow in their career, entry-level positions can translate into long-term hires.
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