Put an end to employee turnover through the revolving door

Organizations continue to struggle with this expensive problem. Psychological assessment science has advanced significantly in recent years, allowing for the development of significantly more predictive assessment tools.

If you are unsure of the cost of employee turnover, many experts agree that you can get a good estimate of the cost of a single turnover incident by multiplying the annual salary for the position by 2.5 – this will cover productivity loss, recruiting and hiring costs, training costs, liability, and unemployment, as well as the other 101 hidden costs that we generally avoid thinking about when we hire.

Employee turnover is frequently the result of a poor hiring decision. When we hire someone who is not a good fit for the job, we have already started down a path that is almost certain to end in failure – and another turnover casualty. A portion of the problem of poor hiring is due to our inadequate tools: According to one comprehensive study of the hiring process, relying solely on an interview results in a 14% chance of making a good hire. With proper reference checking (which we all know can be difficult), you can increase your success rate to 26%. If you want to beat one out of every four odds, you’re going to need better tools!

Fortunately, the science of employee evaluations has resulted in an increasing number of useful tools to complement the art of hiring. While no assessment, or even a combination of assessments, guarantees success, the same study demonstrated that incorporating personality, abilities, interests, and job matching measures can increase your success rate to at least 75%. Additionally, valid pre-employment screening assessment tools in each of those areas can be implemented for less than 1% of the projected cost of a bad hire.

Why aren’t more of us utilising employee assessments to enhance our hiring processes (and thus reduce turnover)? A large part of the explanation is due to a lack of education on the subject – few of us have attended even a single seminar on the use of scientific assessment tools. Part of the reason is a reluctance to invest in new processes. To be honest, part of it is the already overwhelming load we place on those doing the hiring – they are too busy bailing the boat to turn on the bilge pumps! To alter the course of turnover, you must first recognise that the costs are prohibitively high, that you can alter your course, and that the rewards are well worth the effort.

Profiles International, Inc. is the leading publisher of employment assessments in the world. Its products benefit business, industry, education, and government by facilitating the acquisition of information that employers can use to make more informed hiring decisions.

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