Recruitment

How to decrease turnover in high-volume sectors

Ettie Holland By Ettie Holland on 14.08.2019
Employee leaving their job

Sectors that depend on high-volume recruitment often battle higher-than-average turnover. Lower-paid public service roles in retail, hospitality and call centres are some of the worst affected, and recruiters face an endless balancing act.

Many volume recruiters find their turnover is climbing, and aren’t sure how to increase retention while meeting volume targets.

All while avoiding that slippery slope, where increased pressure means quality of hire slips, which causes increased turnover, which in turn amps-up the pressure.

Here’s how to break the cycle, increase turnover and create some headspace so you can focus on delivery.

Where high turnover and high-volume recruitment intersect

High turnover is a problem in every industry. The CIPD say the average UK turnover rate is 17.3%, while Gallup report more than half of all employees are considering a new job.

Once you consider direct and indirect costs, that’s an expensive problem. Oxford Economics say turnover costs an average of £30,000 per hire, for example. At senior or executive level, turnover costs leap to more than 200% of first year salary.

It’s no wonder that improving retention is a critical business priority for 87% of employers.

And that’s the world of work in general.

High turnover is an even bigger issue in industries that rely on high-volume recruitment. Like call centres, hospitality and retail.

As the CIPD say: “Successive CIPD surveys of labour turnover show that the highest levels are typically found in retailing, hotels, catering and leisure, call centres and among other lower paid private sector services groups.”

Contact Babel report, nearly a third of call centres have turnover between 26% and 50%. Another 7% have turnover over 50%. (And if you’re paying new agents an average £13,420 or less, you’ll see over 50% attrition within the first six months.)

High turnover is predicted to cost UK call centres £2Bn in the next year. That’s not a problem you can afford to ignore.

Hospitality is up there too, with an average turnover rate of 30%. That’s double the UK average.

Then retail – the worst of the bunch with an average turnover rate of 60%. When you drill deeper, part-time hourly store employees are the worst culprits, with an average turnover rate of 81% in 2018.

If you recruit into these industries or similar, you’re familiar with the balancing act. It feels like an endless conveyor belt, where you’re running to stand still. Or one of those games, like Space Invaders, where you’re knocking your targets down one-by-one but they keep coming closer.

Here are five ways to fix it.

Five ways to decrease turnover (to give high-volume recruiters some breathing space)

1 - Externally benchmark salaries

Most companies battle a gap between what employees wish they were paid versus what you can afford to pay them. An entry-level call centre agent will never command a salary of £30,000 or more. That’s just not the market reality.

But that doesn’t mean jobseekers should settle for what you’re offering. Even when you’re recruiting at volume, be aware of factors that drive jobseekers away. And a major competitor offering better rates is a biggie.

Benchmark your salaries against others in your industry regularly. If you’re not competitive, consider increasing your rates. Or quantify other benefits of working with you, so jobseekers have other compelling reasons to choose you.

2 - Consider a bonus program

If your hands are tied on salary (or even if they’re not) a bonus programme can be a compelling advantage for jobseekers. Pay and benefits are one of the biggest factors driving turnover in hospitality, for example, with 63%of hospitality employees leaving the sector for that reason.

You could link bonuses to company, team or individual performance depending on which traits you want to motivate.

So, say you offer a 5% annual bonus if employees overachieve targets by 25%. That’s a compelling proposition that boosts engagement – but you don’t pay a penny unless employees perform. It’s risk-free.

Plus, such schemes are more attractive to the type of people you want to hire. The ambitious, driven, hard-working candidates. So you increase quality-of-hire as well as keep turnover down.

3 - Listen to your people regularly

Maybe your employees work on a part-basic, part-commission basis. That can work exceptionally well but it’s important to get the right balance, because unstable income is a major turnover driver. (For example, 52% of hospitality workers said they’d be less likely to leave their role is they had a more stable income).

Or maybe your employees are plagued by awkward shift patterns. Another major driver of poor engagement and high turnover. (55% of hospitality workers would be less likely to leave if they had more control over shift patterns).

Or maybe there’s a personality clash between two great people. But unless you fix it, one of them will leave the business. ( Like the famous Gallup stat that 75% of people who voluntarily left their role did so because of their boss).

The best solution is to listen to your people regularly. Interview them. Give them space to anonymously feed-back. Ask them what they need. You have limitations but a little flexibility could make a big difference to your retention rate.

(This doesn’t only apply during tenure. Run exit interviews, then use any insights to improve life for current employees)

Like, maybe a slightly higher basic salary would ease employees’ anxiety – but would pay for itself with a tweak in commission structure. Or perhaps some team members would welcome split shifts so they can pick the kids up, while others are desperate to trade.

Some elements of the role are unchangeable but a small change can make a big difference. And you don’t know until you ask. Even in low-paid, high-volume roles, recruitment and HR is a two-way street.

4 - Invest in training and development

A recent LinkedIn survey asked 10,000 recent jobseekers why they left their job – and the majority (45%) credited lack of progression. And 94% of employees say they’d stay longer with a company that invested in their career.

Development potential is a big deal. And unfortunately, it’s often (perceived to be) lacking in high-volume recruitment sectors.

Like, only 40% of hospitality workers believe it’s possible to have a long-term career in the industry. And only 35% of people leaving retail jobs stay in the sector.

You’ll have a big impact on retention if you invest into better training and development, including onboarding, which is crucial to increase new hire engagement. But investment isn’t always in your control.

What recruiters and HR can control are the conversations you have, and encourage managers to have, around career progression.

LinkedIn, for example, found attrition decreased to only 5.5% simply by encouraging managers to have career-focussed conversations with their team. (Here’s how they structured those conversations).

5 - Hire right to start with

The previous four tactics all happen post-hire, but recruitment can’t be separated from retention. The two are intrinsically linked.

Hire right, and you’ll bring better-equipped, better-fit, better-prepared candidates into the business. Which means they’ll be more likely to succeed, thrive and love their role. Which means they’ll be less likely to leave.

(Check out our comprehensive guide to quality-of-hire in volume recruitment).

One problem is, hiring great people is becoming more difficult. In every sector, customers expect better, more intuitive, faster, richer customer service and experiences. Which means there’s a whole new pressure on the people we hire to deliver those experiences.

Another problem is, identifying those great-fit people can be really difficult in high-volume recruitment. You’re under huge time pressure, and early-stage interviews are time-consuming. Most candidates get a cursory 20-minute call, if at all.

That’s a major value proposition for video interviewing. Tools like Tazio INTERVIEW slash the time you spend on first-stage telephone interviews, while giving you a deeper perspective on candidates earlier in the process. So you can identity better-quality candidates at scale.

There are several aspects to decreasing turnover but bringing the right people into the business in the first place plays a huge role.

High-volume recruitment and high-turnover sectors often overlap, and it creates unnecessary extra pressure for recruiters. High turnover doesn’t have to come hand-in-hand with recruiting at volume – and changing things isn’t an insurmountable challenge. As these five tips hopefully prove.

Tazio is an intelligent recruitment platform that combines video interviewing with paperless assessment, comprehensive online testing and effortless onboarding and engagement.

It’s especially popular for high-volume recruiters like the NHS because it increases recruiter bandwidth, slashes recruitment costs and increases quality-of-hire. Book your personalised 20-minute demo.

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