Dr John Sullivan Talent Management Thought Leadership

38% of new hires quit, yet no one attempts to identify the candidates that are likely to quit.

Which is puzzling. Because I have found that you can predict (with up to 70% accuracy) which candidates will quit during their first year.

Article Descriptors| Recruiting /Retention – A Checklist Of New-Hire Stay Factors – 4 Min.

What Are “Stay Factors”? 

This prediction accuracy is possible because there are what I call “stay factors” (some call them “sticky factors” because an employee sticks to the job). That, when present, helps to predict whether a candidate will stay after they are hired. These stay factors fall into four distinct categories: people that influence retention, a high level of interest/commitment to the company, traits of this candidate, and elements of the job that will increase retention.

Do You Know Why Early Turnover Is So Painful And Expensive?

Research reveals that an astounding 38% of new hires quit during their first year. And that makes new-hire turnover a significant problem that can no longer be ignored.

In fact, I have found that new-hire turnover is the most painful type of turnover because these new employees leave so early. There is no time to recoup any huge upfront time and resource investment required to get them up to speed and make them successful.

These non-recoupable costs start with the mental anguish that everyone feels after a promising new hire leaves. However, team costs also result from making teammates share the workload. The team’s productivity is reduced during the time when the position is once again vacant. The manager loses because of all of the unrecoverable wasted time they put into recruiting, onboarding, and coaching the new hire.

Finally, the company’s losses include wasted salary dollars, recruiting dollars, sunk training costs, and any negative customer impacts caused by the new-hire departure. These painful losses will be further multiplied if the replacement hire fails.

A CHECKLIST OF THE TOP 10 “STAY FACTORS”

(That predicts when a candidate/new hire will have a long tenure) 

Yes, there are multiple “stay factors” that, when present, predict a long tenure for a candidate/new hire. And surprisingly, in my experience, the candidate may only need to meet as few as 3 of these “stay factors” to be classified as a “long tenure” candidate.

The most predictive “stay factors” appear first in the following checklist.

• Being referred by a top employee is the best stay predictor – the most powerful of all predictors. When a candidate is made an employee referral by one of your top-performing professional employees (not just any employee), you can be confident that the referred new hire won’t leave early. First, the referring employee will likely coach them to get them up to speed. Later, the referring employee will also help dissuade the new hire if they consider leaving. Research reveals that 47% of the employees hired with a referral stay for over 3 years. However, for job boards, the retention rate is only 14%.
• Being a Boomerang rehire is a powerful stay factor – the second most powerful “stay factor” is when a former top employee tries to return to your company. If you hire them back, they aren’t likely to leave again.
• It’s a major stay factor when a candidate attempts to follow a recent colleague into your company – when one of your employees left their previous company. Proactively urges one or more former colleagues to follow them to your company. Fortunately, if hired, this “follower” candidate is unlikely to become an early turnover statistic. Because if they become unhappy, that colleague will likely coach them and convince them to stay.
• Assume that candidates with a history of long tenure jobs won’t be an early quitter – it might seem obvious that candidates have a history of voluntarily staying a long time in every one of their jobs. You can expect that pattern to continue. Often, they don’t quit because they have thick skin, and they don’t let most problems bother them. However, when you see multiple separations in their resume, it’s a mistake to assume they are “job jumpers automatically.” Instead, you should work with your top candidates to determine if any of their separations were involuntary and beyond their control (i.e., the job/team was eliminated, they relocated, or the company went under). Also, remember when a candidate is offered their “perfect job” by your company. Their job jumping will end. 
• Surprisingly, an easy commute is a major stay factor – it surprises many to learn that a bad commute is a major driver of turnover. In fact, nearly one-quarter of all workers have quit due to a bad commute. So, you need to count an “easy commute” as a major stay factor. So, determine if any of your finalist candidates commute will be bad (over 30 minutes). Also, realize that if your new hire commutes with one of your employees. That strong commuting friendship will likely reduce the chance of either one quitting. 
• Applying once again to your company is a major stay factor – when a candidate your company has previously rejected applies again. Consider their willingness to reapply as an indication of their interest in your company.
• Specifically, targeting your company is a major stay factor – many potential recruits apply to every company that has an opening in their area. So, when a candidate provides you with evidence that they specifically targeted your company, you should take that as an indication that their strong interest in your company will keep them from quitting. Find out where else they have applied. Ask them directly, “Where else have you recently applied?”
• Thoroughly researching your company is a major stay factor – one of the best ways a candidate can show that they are extremely interested is by completing extensive research on your company. Research that’s well beyond the basic information that can be easily found on your company’s webpage. Judge their research by the in-depth knowledge they reveal when answering interview questions. But also, by the questions they ask you about company growth and innovation. As well as about your customers and your products.
• It’s a major stay factor when compensation isn’t a candidate’s top priority – because compensation is often among the top reasons why many employees leave. You can assume that when you have a candidate/new hire who is not easily tempted by “money.” They will be less likely to quit when they don’t get a quick raise or when they get a better-paying external offer. The best approach is to simply ask them to list their top five criteria for accepting a new job.
• It’s a major stay factor when the candidate immediately responds to every interview scheduling opportunity – when fully employed candidates sign up for their interviews on the first available day. It is clear that they have a strong interest in working for your company. Because being employed, they would have had to rearrange so many things to put your interviews first. Another sign of strong commitment is being noticeably early for each interview. And when they never even attempted to reschedule or cancel a single interview.
• Not repeating the same reasons that caused them to quit in the past is a major stay factor – and last, but certainly not least. Candidates that have previously quit their last jobs shouldn’t be automatically rejected. Provided that the manager is willing to work to ensure that those previous reasons won’t be repeated at your company. So, ask your top candidates to disclose their primary reasons for leaving. And work with their hiring manager to ensure that those reasons can’t occur in this new job. If they can’t be, obviously, it makes sense to explain to the candidate why they need not be concerned about those issues repeating.

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SOME ADDITIONAL LOWER IMPACT STAY FACTORS

In the case where you would like to consider some additional stay factors. Here, broken into the four categories, are some additional (but less powerful) stay / sticky factors to consider. 

People-related stay factors

The new hire will stay because of the actions that these people take.

• The opportunity to work for a former manager is a stay factor – when a candidate is applying with the goal of once again working for a former boss who is now one of your managers. That strong connection will likely cause the new hire to stay. 
• Having their mentor working at your company is a stay factor – when a candidate’s mentor works at your company. The candidate is less likely to leave because their mentor constantly coaches them. And if they become unhappy, the mentor will help to talk them out of leaving.
• Having a best friend at work is a stay factor – when a really close friend or relative of a candidate already works here. You can assume that that friend will support the new hire. When necessary, they should talk their frustrated friend out of leaving. 
• Strong support from their references is a stay factor – it’s a stay factor when their references not only give a good reference for the candidate. However, when asked, they unanimously agreed that this candidate would stick with your company. In addition, when one of their references is currently working for your company, You can assume that they will intervene if the new hire becomes unhappy. 

Factors related to the candidate’s strong interest/commitment to the company

There are several ways that a candidate can reveal their strong interest in your company. They include:

• The candidate took the time to submit a cover letter that was customized to your company – whenever you find that a candidate has spent the time to customize their cover letter and their resume to your company and this job. Take this as a sign that they have a deep interest in your company.
• Outside of the interview, behaviors indicate their interest – which is when a candidate continually maintains their excitement level outside of their interviews. They also show extra courtesy and consideration to staff members whom they meet outside of their interviews. Take that as a sign of a genuine interest in the job and company.
• Applying on the first day indicates interest – when a candidate submits their application on the first day the job is posted. Consider that an indication of their strong interest in your company. 
• Peer interviews are a good way to judge genuine interest – peer interviews are where the whole team interviews a candidate without a manager present. They have proven to be an excellent way to judge the candidate’s genuineness and interest.
• When a contractor attempts to shift to employee status, that is a sign of commitment – when one of your contractors wants to shift to permanent status. You can assume that they won’t be a quick quitter. 
• And one final indicator: they don’t immediately accept your verbal offer – there is one final stay factor that shouldn’t be ignored. When the time comes to make your verbal offer to your chosen candidate, they immediately say yes without hesitation. Consider that to be a positive stay factor. However, if they hesitate or want more than one day to think about it. You should at least consider resending your offer because they may be a flight risk. 

These Candidate traits are stay factors

Candidates who provide evidence of their positive attitude and values in these areas are unlikely to have early turnover.

• When asked, the candidate commits to staying – you can learn about this candidate’s intention to stay. By asking them directly during an interview. “If you are hired, will you verbally commit to staying for at least one year?”. If they respond positively and without hesitation, consider that commitment as a stay factor.
• Self-motivated candidates are more likely to stay – if the candidate provides evidence that they are self-motivated. Assume that their turnover risk will be lower. Because they won’t need external things like recognition and rewards to stay motivated. 
• Being late in their career is a stay factor – a candidate’s retention rate tends to increase during the second half of their career. So, candidates at midcareer and later are less likely to quit (Note: This is age preference, not discrimination). It’s also true that when a candidate is within 10 years of possible retirement. If you have a good retirement system, they are unlikely to quit again. 
• A candidate without multiple offers is less likely to leave – candidates who receive only one offer (yours) will likely stay longer than candidates who received multiple offers. Because you are a single offer, candidates can’t be confident that there will be another job waiting for them if they choose to quit.
• An exceptional candidate won’t need to leave – after exceptional candidates are hired. You can expect that they will get constant attention. And as a result, they will be less likely to quit because they feel isolated.

Stay factors related to this job

Sometimes, elements of the job, such as the manager and the work environment, increase retention.

• Turnover will be low when a candidate’s manager is skilled at retention – when the new hire’s manager has a track record of low new-hire turnover. You can assume they know how to mitigate any potential turnover problems before they become severe.
• Fast internal movement can be a stay factor – because many top candidates expect fast internal movement and career progression. The turnover rate of this type of candidate will be much lower. When the group that they are joining and their new manager have a successful track record of proactively getting quick promotions for their new hires. And that proactive internal movement will increase the likelihood that the new hire will stay. 
• The job itself has naturally low turnover – the new-hire in some jobs will naturally stay a long time because the job itself is unique or highly desirable (i.e., remote work, small town postmaster).

If You Decide To Implement This Candidate Screening Process, It Must Be Data-Driven

At least initially, predicting which candidates/new hires won’t become quick quitters will require a lot of intuition. However, eventually, your identification process must become data-driven. Only with success metrics and positive correlations will you be able to prove to executives that your “stay factors checklist” is actually lowering new hire turnover.

Incidentally, you can also improve your retention rate of new hires and regular employees by transitioning away from traditional exit interviews and toward post-exit interviews. Because data shows that they will give you at least a 40% more accurate list of the actual turnover causes.

If you only do one thing – you can conduct a quick snapshot assessment of the effectiveness of this candidate turnover prediction process. Identify a handful of your recent new hires who have successfully completed their first year. Then, use their original resume and your interview notes to determine if this checklist would have accurately predicted their tenure. You can do the same checklist verification on your previous new hires that prematurely quit.

Final Thoughts

It’s a mystery to me why smart talent leaders don’t even attempt to add more value by predicting new hires’ trajectory (i.e., the career movement). In fact, most don’t even make an attempt to predict which regular employees might leave (i.e., flight risks). Although a few, like IBM, have done it with an amazing 95% accuracy rate. 

However, almost no one in the corporate world has even attempted to predict the most painful type of turnover, new hire turnover, even though the identification of the candidates that are likely to become early turnover within their first year. It only requires the use of one one-page checklist. However, for those extremely busy leaders, there is an even simpler alternative. Just select a handful of the stay factors that make sense to you. And when a new hire prematurely quits. Informally see if your handful of stay factors were good predictors

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