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Risk Report: Attracting & Retaining Talent

March 2017

STRATEGIC RISK – Talent is key to obtaining the strategic objectives of the organization as the business moves forward.

BUSINESS RISK – A lack of talent within any organization can impact the daily operations of a business by slowing down the organization (productivity) and impacting customer retention 


 

Methods to Manage this Risk

PREVENT: Hire, train, and engage employees at a high level. Evaluate skill set as well as personality traits that fit organizational culture. Have scheduled training that pushes the employee to become better. Engage employees with a clear understanding of their importance to the success of the company.

MITIGATE: Establish a pipeline of potential employees. Regularly interview qualified, referred candidates for key positions. Stay engaged with top candidates with regular updates on the organization. If a position opens unexpectedly, this pipeline will fill the gap, fit the culture, and lessen the loss. Have employees learn multiple positions within the company with established support systems so that if an employee exits the position, there is an immediate replacement and you can hire at the lower position.

TRANSFER: Contract with an employment agency/firm to identify potential candidates. Have a clear understanding of what skills and characteristics are essential and engage the firm with feedback on good candidates.

FINANCE: Key-man life insurance with bonus program. Other incentives for employees based upon performance.

ASSUME: Realize the risk inherent in not having an engaged workforce and the dangers of high employee turnover (lower production, high training cost, low motivation, decreased profitability, low employee morale, etc.). Lower the organizations budget to absorb costs and lower the financial forecast.

 



ADDITIONAL RISK INFORMATION AND FACTS

PROBLEMS IDENTIFIED WITH THIS RISK:

  • Hiring is the tipping point of the employment relationship.
  • Most employee risks can be eliminated in the hiring process.
  • Most companies hire to get it over with.
  • Half of all companies hire better than the other half.
  • Most small and mid-sized companies don’t dedicate the resources necessary to make great hiring decisions. 

CURRENT AND POTENTIAL COSTS:

  • According to the HR That Works Turnover Cost Calculator, it costs approximately $54,000 to replace a $50,000/year employee. This does not include if they file any claims, swipe information, flame you in social media, or take any clients and employees with them.
  • It is difficult to quantify what it costs a company who makes less than a great hire and keeps that employee on staff. What if they leave 20% on the table year after year after year? 

SOLUTIONS:

  • Identify the ideal employee profile.
  • Attract the interest of the profile candidate. 'Hunters vs. Gatherers' approach: do you hunt for talent or do you gather whatever walks through your door?
  • Conduct tests, assessments, extensive interviews and background checks.
  • Make sure to take a checklist approach to ensure managers follow it every time.
  • Use offer letters and contracts.
  • Conduct pre-hire fit-for-duty exams.  
  • Have an onboarding plan.
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