Should I hire someone new or should I focus on improving retention?

Whilst the recruiter in me would scream out “Hire!” the reality is a lot more complex than that.

While hiring new employees can bring fresh perspectives and skills, improving retention within your workforce can yield significant benefits, including increased productivity, reduced costs, and a more positive work culture.

The average tenure of permanent technology employees is approx. 3-4 years (depending on which website you believe!).

High employee retention can lead to numerous advantages, including:

1. Cost Savings: Hiring and onboarding new employees can be a costly process. By focusing on improving retention, you can reduce recruitment, training, and administrative expenses associated with new hires.
2. Knowledge and Experience: Retained employees possess valuable institutional knowledge and experience specific to your organization. Their familiarity with your systems, processes, and culture can contribute to increased productivity and better decision-making.
3. Productivity and Efficiency: When employees remain with a company for an extended period, they develop a deep understanding of their roles and responsibilities. This expertise leads to increased efficiency and productivity, as they require less time for onboarding and are better equipped to handle challenges.
4. Positive Work Culture: A high employee retention rate fosters a positive work culture, contributing to higher morale, teamwork, and employee satisfaction. This, in turn, can attract top talent and improve your organization's reputation.

When to Focus on Retention: Improving retention should be a priority in cases, such as:

1. High Turnover Rates: If your organization is experiencing consistently high turnover rates, it is crucial to identify and address the underlying causes. Analyze employee feedback, conduct exit interviews, and implement strategies to improve employee satisfaction, engagement, and growth opportunities.
2. Specialized Skillsets: Retaining employees with specialized knowledge or skills can be challenging. Investing in their professional development, offering competitive compensation packages, and providing opportunities for career advancement can help retain these valuable team members.
3. Succession Planning: Long-term employee retention is crucial for succession planning. By nurturing talent from within, you can develop a pipeline of skilled individuals who are ready to assume leadership roles when needed.

When to Consider Hiring: While improving retention is generally advantageous, there are situations where hiring new employees becomes necessary, such as:

1. Expansion or Business Growth: If your organization is expanding or experiencing significant growth, hiring new talent may be essential to meet increased demand and workload. Assess your current workforce capacity and determine if additional staff is necessary to support your business objectives.
2. Skill Gap: When you identify critical skills or expertise gaps within your organization, hiring new employees with the desired qualifications becomes essential. This ensures that you have the necessary capabilities to drive innovation, adapt to market changes, and deliver high-quality products or services.
3. Fresh Perspectives: Introducing new employees with diverse backgrounds and perspectives can invigorate your organization. Hiring individuals with fresh ideas and experiences can foster innovation, creativity, and contribute to a more well rounded work environment.

If you are experiencing high turnover, ask yourself: “Am I hiring the right people in the first place?”. Whilst it can often be advantageous to hire the “top talent”, actually the best fit might be someone with a more appropriate level of skills for your business needs. Asking the following questions in interviews can help you assess whether a new hire is likely to last long term:

• How long do you see yourself doing this position?
• What would you like to do after that? – Ask yourself if your company can provide it
• What frustrates you most in the workplace?
• What is your 3-5 year plan?
• What are your reasons for wanting to move on from where you are now? Have you spoken to your current boss if anything can be done about it?