Managing Talent Retention and Acquisition Cost

22/06/2021

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For most startups and small businesses, employees and payroll form a major part of business costs. It is important to have good workers so that your business can flourish, but it can be expensive to find good talent and retain it. This is why you have to be aware of actual hiring costs and how to manage it.

Employee costs consist of various overheads, including standard minimum wages.
There are additional costs that cannot be avoided, such as leaves with pay and employee benefits.
Apart from salary, you have to spend funds on the recruitment process as well.

For these three reasons, replacement of employees is not cost effective. Losing good resources can drain funds because you have to constantly look for new people. Finding skilled people to work in your venture and retaining them is not easy though. And, if not handled correctly, it can lead to lingering problems. So, how can one resolve these issues? To begin with, you can develop a smart employee retention strategy.

What is a smart employee retention strategy?

An employee retention strategy is a collection of plans and policies for organizations to manage and keep hold of their employees. It helps them to improve productivity, reduce attrition rate and keep workers engaged. It is important to ensure that this strategy matches your business goals so as to result in a quicker return on investment. A good employee retention strategy can help your company achieve these objectives:

Guaranteeing overall wellbeing of employees
Improved productivity
Long-term, sustainable growth
Minimizing employee turnover hassle
Reducing hiring time and costs

Key Tenets of Employee Retention

Monetary Benefits

Poor compensation can result in the workers quitting their jobs. Hiring replacements is often a costly proposition. Salary hikes and work appraisals are two common ways to fix this issue. A new method is to reward employees when they perform well, come early to work or have less absentee days.

Communication and Culture

Employees deserve open communication, whereby they can freely talk about their ideas, voice their opinions, make suggestions, provide feedback and raise concerns. This creates a good work culture that permits easy working and encourages teamwork for successful results. It encourages collaboration where all can contribute and clarify roles and responsibilities.

Advancement and Recognition

Continuing to do the same work is often tedious and boring for employees. To resolve this, companies can involve employees in different tasks across departments. Doing this can lead to better ideas, employee collaboration, better skills and advanced professional development.

How can you build a robust employee retention strategy?

Your human resources team has to begin with setting goals for employee handling. Think of the things you want to resolve – cutting down recruitment time, improving employee well-being and lowering the employment costs. To find the answer to various issues, you have to create an employee retention plan. There are four basic steps that can make a difference. Let us see exactly how.

Understanding possible candidates

Know what kind of talent you are looking for and match the candidate’s skills with job requirements. Say, you have two candidates suited for a job vacancy. Candidate 1 has the skills required but is not ready for a competitive environment. Candidate 2 has the same skills, but has experience of handling deadline crunches and working in a fast-paced work environment. In such a scenario, Candidate 2 will be a better fit for your enterprise.

Recruiting according to skill

Make a note of the specifics of the job vacancy you have in your company. Then search popular online portals for employee resumes that fit these specifics. For instance, your startup sells consumer electronics, such as smartphones, laptops, ACs, refrigerators, etc. and you maintain all records in a computerized database. You are looking for someone skilled enough to manage this database. So, your ideal candidate should be a person who has requisite knowledge of various documentation software, data entry, understands bulk operations and is an expert at data handling activities. For the role, the candidate should also be able to develop new skills. So, while searching for the right talent, you cannot just look at the past experience, but should also look for skills that they have and if they are ready to upgrade them.

Mobility programs

All employees have a plan for themselves and their careers. To keep your employees happy, you have to give them adequate opportunities to develop and build their careers. You can do this by hiring existing employees into new positions. So, each time you create a new job role, consider the employees working for you already before looking for external talent.

Moving existing workers into new job positions is called internal mobility (IM). Promoting employees to the new positions helps lower costs and increase talent quality. While creating your own IM program, ask yourself these questions:

Do your existing employees have access to new job/career opportunities inside your company?
Can the IM goals be measured? How do you understand the outcome?
Does your IM plan cover all areas of your company?

Pre-boarding and HR uptake

Candidates turn into employees within a short period of time. During this time, companies should ensure that candidates get what was promised. They have just one chance to make a good impression. So, it is important to develop a good onboarding process for all new employees. This includes emails welcoming them to the team/department, describing their role and job description, conducting team introductions, etc. With time, they can be given invites to company events and meet other new employees as well.

How can startups and small businesses improve talent acquisition?

Small business owners have limited resources. They may have a limited human resources team and bringing skilled candidates on board may be challenging. What if you do not have time to put a thorough talent acquisition strategy in place? Are there easier, shorter ways to hire good candidates and lower acquisition costs?
We have listed down a few things that you can do for faster, more effective talent acquisition.

Hire the right workers

Have a clear idea of all the responsibilities that the candidate has to take to execute his job seamlessly. The best candidate fits not only the job, but also the company.

Offer competitive compensation

Offer prospective candidates competitive salary packages with benefits for them to be motivated to join the organization. Salaries should match that of competitors’ and should also justify the job role and responsibilities.

Value existing employees

Celebrate every achievement of your employees – both professional and personal. It could be the success of projects, getting new clients, birthdays and family events. This builds employee loyalty and a connection with the organization.

Offer flexible work schedules

Each employee’s life is unique with many responsibilities. Creating a flexible workspace helps them balance work and home. In order to offer greater work-life balance, organizations should look to provide options, such as flexible work timings, working remotely, access to work networks, systems and equipment. Such initiatives have proved to remarkably improve employee satisfaction and elevate overall productivity and efficiency of the workforce of organizations.

How can startups and small businesses improve talent acquisition?

Conclusion

Small- and medium-sized businesses often jostle with more questions than answers, and with talent acquisition and retention creating the bedrock of seamless operations for these enterprises, the importance of future-facing strategies cannot be overstated. As a startup, you can avail various talent-specific services when you do business on the Amazon marketplace. Register with us today to give your business wings.

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