The hiring, development, and retention of employees are important cornerstones for any business and its day-to-day operations. For younger companies, however, the hiring and retention of talent is a crucial element in forging success. Early employees play a key role in fostering the corporate culture as well as delivering business value, and for founders, ensuring they build a strong and trustworthy team around them is crucial to the long-term success of their business. Additionally, a tougher economic environment is seeing increased scrutiny placed on budgets and spending. With purse strings tightening, ensuring that your headcount is delivering value for its cost is arguably more important than ever.
This said, the costs associated with a workforce aren't limited to compensation alone, and leaders should understand the burden that comes with failing to retain talent. According to the Work Institute, nearly 38% of employees quit within their first year of employment. Not only does this bring a time cost to others within the organisation when re-hiring and repeating the onboarding process but it can also create a significant financial dent. Research has shown that the average cost of replacing an employee comes at 33% of the cost of their salary (Benefit News).
Honesty in application
An applicant should be aware of the issues they will be expected to solve. Be transparent about the hurdles that will be faced within the role; if you are wanting to recruit to solve issues, then you must be clear on what these issues are and not sugar-coat what the role will entail. The right candidate will feel energised and capable of solving and overcoming these challenges, and others will have the information to self-select themselves out of the process. Without honesty, you risk recruiting a candidate who will feel burned out quickly after overcoming the issues.
Setting new hires up for success
When onboarding, ensure individuals are given the full business picture. Akin to the above, once an individual is hired, make sure they understand the full context of the business area they are entering and are aware of the business journey their new team has gone through. A new hire may have different expectations around priorities and maturity. In particular, those moving from larger companies to start-ups may be used to more advanced systems and processes, so ensure these new hires are respectful of the efforts and challenges of the current workforce.
Growth means more experienced talent may be required
As a company expands, founders may have to bring in a layer of experienced talent above those currently employed. In a scaling organisation, what is required of individuals, especially those in senior roles, will shift, and additional talent (for example, an individual with global rather than regional experience) may be required. Be open with existing talent about these changes and make it clear that as the company grows, so will their current role and remit, even if this means additional new management above them. Work to ensure the employee understands how and why their role is being streamlined and where else this may be happening across the business. This will help make it clear that it is a business decision and not something that is personal to them. Work with the new management to ensure that the original talent still maintains a sense of ownership despite growth and changes.
Keep the current workforce informed
Be cautious not to overpromise what a new hire can realistically deliver. When bringing in a new hire, make it clear what their remit will be and what is in or out of scope for them. Promising that a new hire will solve everything and hold all the answers will simply disappoint current employees and may lead them to see the new hire as incompetent. Be clear on what the priorities of a new hire will be and what they will be putting on pause for now. This will set both the current workforce and the new employee up for success in their roles.
Advocate for employee honesty
Ensure employees can be honest about what motivates them. Have open and honest conversations with your employees about what they want from their role, how they see their career developing, and how they could be better supported to reach these aspirations. In turn, be honest with them about what is feasible and what the timeframes are for them. Ensure you are giving employees opportunities to stretch themselves and grow, but also ensure that they are supported sufficiently when undertaking these. Ultimately, if it is a failure, celebrate it. These are excellent opportunities for employees to learn new skills and feel empowered to do more.