In the recruiting practice, which is much more formalized, managers and contributors strive toward established targets, broken out by job disciplines, generally putting their heads down and plowing forward lo achieve the goal. Meanwhile, scattered somewhere else in HR. One or more employees run spreadsheets tracking terminations against similar classifications; however, these efforts are rarely organized with established targets to perform against. In addition, groups tasked with both the aforementioned jobs seldom collaborate to isolate trends and characteristics that can identify what makes a top-notch employee worth hiring, keeping, and advancing.

I recently spoke with a friend who is a 30-year veteran CFO in the software and technology space, and our conversation turned to wondering why mature companies constantly miss, or mis-forecast, their revenue targets. Most often, we agreed, it simply comes down to not having enough people, whether it’s developers, manufacturing, or salespeople.

With that in mind, organizations must align their recruiting and retention efforts for actual results, so as to achieve the desired people and revenue targets. Below are some effective tactics that can help in accomplishing such.

Treat the Talent Pipeline Like a Sales Pipeline

Closing new deals is not a sales team’s only job. In addition, they are responsible for developing new opportunities, cultivating greater spend from existing clients, and cutting ties with unprofitable ones. When it comes down to it, shouldn’t these be the same priorities when managing and optimizing a workforce? Finding sources for great candidates, hiring the best, growing them into contributors, and eliminating the unqualified are the most important parts of HR’s job.

If a company is looking to grow revenue by 20 percent, that increase usually involves a proportional increase in headcount. But does that mean the company simply needs to hire 20 percent more people? Certainly not. If that company has a consistent history of turning over 15 percent of its employees every year, then the recruiting target should more logically be set at 35 percent to accommodate anticipated turnover. But is it fair or even wise to place the full responsibility for filling the gap on the back of the recruiting team?

Recruiting versus Retention Teams

As mentioned earlier, a recruiting team is most often firmly in place at larger companies. The individuals on these teams are tasked with obtaining qualified individuals for the interview cycle to be evaluated, and possibly hired, for defined positions within the organization. Recruiters are usually evaluated on the number of hires made and, in some cases, the hire has to remain on board for a specified period of time before the recruiter is credited.

If a company has any retention efforts at a all, they are usually wrapped into employee engagement efforts, like mentoring programs or internal leadership training initiatives. But the professionals tasked with retention efforts tend to be individuals with multiple focuses, and rarely are such personnel held to hard targets like the recruiting team. But if a company is losing a number of high value employees every year, wouldn’t it make sense to have a team dedicated to improving that? Considering the value of keeping a high performing current employee versus the costs of bringing in a new employee who has to be onboarded, trained, and isn’t guaranteed to work out, the answer is a resounding yes.

Setting Targets

If an organization is prescient enough to possess both a recruiting and retention team, what would be the best way to go about setting targets for each team? To begin, it’s important to get Finance involved, because if a dollar value cannot be assigned to a target, it will not be taken seriously by the C-suite. The average cost of employee turnover can range from tens of thousands of dollars to 1.5 to 2 times an employee’s annual salary, according to Josh Bersin. And for highly skilled employees, the associated ratio can be as high as 400 percent of their annual salary, respectively, according to Forbes.

If a company is looking to add 400 employees to a workforce of 2,000, then the goal is to have 2,400 employees at the end of the year. However, if annual turnover has been trending at 15 percent, the recruiting team will need to hire closer to 700 employees for the company to achieve its target. But not all that turnover is what might be termed “regrettable” turnover, as it’s likely a significant portion of those terminations were those the employer desired to replace anyway. Regrettable turnover often ranges from about 40 to 60 percent of a company’s-annual total turnover.

So, if we split the difference and assume regrettable turnover is 50 percent, then one can start to carve out realistic targets for the recruiting and retention teams. The calculations below detail targets where the retention team is tasked with saving the entire regrettable turnover.

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