Retain and Sustain Vs Hire and Fire
Can retention be significantly increased by using psychometric assessments?
Several studies claim that between 75-90% of new employees will decide whether or not to stay in the job, within the first 6 months of employment. Although high turnover costs may not produce recordable associated losses, many employers and HR professionals underestimate the high impact of ‘hidden costs.’
Which is why a lot of them don’t currently put in the effort to understand why an employee decides to leave when they do. Sometimes the cause could be as innocuous as a lack of guidance in the first few months to an overall disconnect with other team members.
Just finding out why an employee is unhappy, employers can do a lot more to decrease the number of people who leave the firm. Scheduling psychometric assessments at random for batches of employees has been discovered to be an effective manner into understanding the mindset of a dissatisfied employee much before the decision to quit is made.
This is also in some form a way to engage in a better manner with employees in order to achieve a specific output, in this case, to retain the employee with the firm. In a study by William M. Mercer Inc., 45% of employers reported turnover costs of $10,000 per lost employee and 20% reported costs closer to $30,000.
After losing an employee, employers often bear the financial burden of recruitment, interviewing, hiring, training, learning curves, a decrease in employee morale, and lost company knowledge, credibility and customers. This stands in stark contrast to conducting psychometric assessments that come at the cost of an annual corporate celebration at a mid-size firm, for several hundred employees.
If and when an employee decides to turn in their resignation, using psychometric assessments in an exit situation can reveal whether individuals feel under-appreciated or find there to be a lack of communication, and also how critical it is to change a specific process. Thus providing a mine of data that organizations can use to create a better retention strategy.
Adapted from Mettlpsych article 2017