Why Choosing The Right People Matters

Employee turnover rates vary globally by country and industry, but recent studies highlight some concerning trends. According to Mercer's August 2021 report, the global average turnover rate was approximately 18.5%. The 2022 PwC report indicated a slightly higher rate of 18.7%. On average, turnover rates worldwide are around 19%. The COVID-19 pandemic has further exacerbated talent migration, making the challenge even more pressing.

One significant reason employees leave companies, even those they were initially enthusiastic about, is a cultural mismatch. When the work environment doesn't align with an individual's values, dissatisfaction often follows. To mitigate high turnover, companies need to focus on several key areas: accurate assessment of skills and cultural fit during hiring, effective onboarding, growth opportunities, strong leadership, recognition, work-life balance, and fair compensation.

Data from Glassdoor reveals that 17% of employees leave their new job within the first 90 days due to poor selection and onboarding processes. Additionally, 48% of employees leave their job within the first 12 months. First impressions are crucial, as they lay the foundation for long-term satisfaction. Factors such as career development, relationships with leaders, and company culture significantly impact employee retention.

Turnover rates are particularly high among Gen Z employees, who often seek faster career advancement. This demographic trend highlights the need for companies to adapt their talent acquisition strategies to address varying expectations across generations.

Filling open positions can be time-consuming. According to the 2022 Joblist report, it takes an average of 60 days to fill mid-level positions and over 70 days for higher-level roles. Investing in strong employer branding, modern digital selection systems, and efficient interview scheduling is crucial. Balancing the speed of the hiring process with the quality of candidate selection is essential to prevent losing well-suited candidates who may leave if the process drags on.

The average 45-day hiring process translates into significant costs for businesses. Early employee departures, particularly within the first few months or year, pose several challenges:

1. High Recruitment and Training Costs: Investing in recruitment and training only to lose employees shortly afterward incurs substantial costs.
2. Delayed Productivity: New hires need time to become productive. Early turnover means minimal results are achieved.
3. Impact on Team Morale: Frequent churn undermines team confidence and engagement.
4. Managerial Burden: Managers must spend additional time addressing turnover, diverting focus from other priorities.
5. Loss of Institutional Knowledge: Early departures hinder the development of specialized skills and knowledge, risking talent continuity.

While losing any employee affects a company, early attrition amplifies these issues. The trends and data discussed in this blog suggest that companies should reassess their practices and implement modern processes and technologies to ensure the rapid and effective selection of the right people.