Almost 50% of businesses have no recruitment or retention strategy

Empty 26 October 2021

Recruitment challenges for business owners are not a new issue, and have likely been even more prominent over the last two years. However, despite the pandemic and the extensive list of reasons why businesses may have been cautious when looking to hire new staff, this does not mean that recruitment and retention plans should be completely paused or overlooked.

A recent survey completed by CIPD found that 43% of businesses are taking an “ad hoc approach” to recruitment and retention without developing a clear strategy.

In addition to this, the results also stated that out of more than 1,000 HR survey respondents, only approximately 40% had attempted to introduce retention initiatives within their companies.

Why is a recruitment and retention strategy important?

No matter which industry or sector your organisation is in, having a lack of direction when it comes to recruitment and retention can have a negative impact on employee turnover. As a result, this can also have a negative impact on a company’s overall performance. 

Recruiting and training staff on a regular basis can not only take up a lot of time, it can also be quite costly if there is no real strategy behind it. Whilst employers may be under the impression that spending money on recruitment is an unnecessary cost, this isn’t true when it comes to long-term business growth - as long as there is a strategy in place.

Why is employee turnover so expensive?

Losing a member of staff and hiring their replacement is not simply putting that person on the same salary their predecessor was earning - it can actually be quite a costly process.

Research by Oxford Economics shows that on average, the cost of turnover per employee on a salary of more than £25,000 is £30,614. Therefore, if three members of staff earning over £25,000 leave and need to be replaced in the space of one year, this will cost the business around £100,000.

If you’re wondering why the cost is so high, take into consideration factors such as:

- The cost of advertising jobs on a variety of platforms and job boards

- The time it takes to review applications and CVs

- The time it takes to screen candidates over the phone, as well as interview them in person

- The onboarding process, as well as induction and training

- The loss of productivity while new employees learn about their responsibilities in the role

Of course, these costs will vary depending on the industry, business and role, as training times can vary, for example. For larger businesses, they may hire several people at a time in order to put them through the onboarding and training processes together in order to keep costs down. However, it is still more than simply losing one member of staff and replacing them with no cost to the business.

Taking an “ad hoc” approach to recruitment and retention, like the  43% of businesses discovered by the CIPD survey, can increase outgoing costs and have an impact on a company’s profit if there is no real strategy in place.

How do I reduce recruitment costs and improve retention?

Firstly, the benefits of working with a specialist recruitment agency are more than working with recruiters who know and work with candidates in your industry. It can actually be a lot more efficient in the long-run, given that overall it is cheaper to work with recruitment agencies on a partnership basis than it is to do all your own recruitment. Why? It’s simple: because when you do it yourself, you’re using up your own internal resource.

As long as you brief the recruitment agency you’re working with correctly, they’ll be suited to find the needle in the haystack that may take you weeks or even months to find. Not only will they ensure they find candidates with the right experience skills, but also someone who is the right culture fit - to avoid having the same problem a few months down the line.

Secondly, in terms of retention, having a well thought out strategy in place is where you need to start. Have a look at all employees that have left in the past five years - what were their reasons for leaving? Create a document to keep track of all reasons for leaving going forward, in order to tackle the problems head on. If you aren’t performing exit interviews or asking staff why they’re leaving before they finish their notice period, you will be missing out on an opportunity to improve going forward.

Businesses should also be aware of employee turnover rates within their specific industry, in order to be able to compare their business to the market overall. Is your turnover rate higher or lower? How do you think this can be improved?

Another factor to take into consideration is employee satisfaction. Is your business sending out monthly or quarterly satisfaction surveys to staff to keep track of where they’re happy, and where they’re not? Being able to get direct feedback from your existing workforce will also help you to put a strategy in place for the future.

Get in touch

If you would like help with your recruitment within the Finance and Accounting or Technology sectors, get in touch with WSH Recruitment to find out how we can assist you.

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