How to Align Recruiting and Retention Efforts for Optimal Results

Although they are often used in conjunction, the actual practices of recruiting new employees and retaining existing ones are typically independent within organizations.

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.

Current Number of Employees 2000
Target Annual Employee Growth 400 (15%)
Projected Annual Turnover 300 (20%)
Total Recruits Needed 700 (New Plus Replacement Recruits)
Estimated Regret Turnover 150 (50% of Total Turnover)
Recruiting Targets 550 (Total minus Estimated Regret Turnover)
Retention Targets 150 (Estimated Regret Turnover)


Using this approach, the retention and recruiting team collectively shoulder the burden for ensuring that the workforce not only has enough people, but that it has more of the right people.

Collaboration Between Teams

Don’t assume that once the recruiting and retention teams and targets are established that the two will work together in tandem. Set regular meetings to coordinate efforts and shore information. Any data accumulated on why employees stay or leave, or what characteristics make for a successful employee, need to be socialized. Recruiting teams can benefit greatly by knowing and emphasizing what aspects of the company and position attract the best candidates. Also, existing employees are the best source of what to look for in potential ones.

Regularly updating the C-suite and business side of the company on information gathered for retention efforts is also essential. Companies are always looking to improve their brand, not only to recruits and employees, but to the market as well. People like to buy from organizations that treat their employees well. In a recent survey from Accenture, most consumers (65 percent) said that outside of price and quality, a company that treated its employees well attracted them to buy from one brand over another.

Applying Technology for Greater Insight

It’s hard to solve a problem without being able to see it.

Finding a tool, that can visualize key metrics or key performance indicators, is the first step. Overall, the question is: is the company in good shape or not? Once you have that evaluation, it’s important to know how things got to where they are and what can be done to improve them. That’s where analytics comes in. The ability to trend snapshots from the past and leverage historical information to project future states provides the context and insights to better understand how and what to improve.

For example, consider this visualization of an organization’s people data.

In the dashboard, we can see a number of alarming factors: turnover has been steadily climbing and more employees were terminated than hired last month. One possible explanation for this downturn is pinned to the timeline, a note that a merger had taken place over the last few months. Therefore, this event could provide a possible, atypical reason for a spike in departures.

A robust people analytics solution can incorporate not only an organization’s internal data but can also bring in external information such as surveys, events, and industry benchmarks. Knowing how a key performer is being paid compared to industry averages is a very important factor in determining whether someone is a flight risk. Also, from retention and recruiting standpoints, being able to identify areas where a candidate pool can be very rich or where competitors abound would undoubtedly provide a competitive edge. For example, a software developer is probably much more in demand in San Jose, California than in Omaha, Nebraska due to the high number of software companies located in Silicon Valley. The right analytics system should be able to provide insight and incorporate these factors into its broader calculations.

One technology development that has really allowed analytics systems to take the next leap in capability has been the introduction of artificial intelligence (AI). Solutions that incorporate AI with machine learning provide the capability to not only automate queries and algorithms, but also enable the system to learn on its own (machine learning) as more data and cycles are introduced.

Better Collaboration Equals Better Results

In conclusion, the value of having a dedicated retention team cannot be overstated. Keeping a trained, experienced performer is significantly more preferable than recruiting a replacement. By the same token, not all turnover is negative, as companies must continually replace underperformers. Enabling and expecting recruiting and retention teams to work together, armed with optimized targets and an advanced analytics solution, can make the difference between a company who is an industry leader or one who is always trying to catch up.

Connect with Tom

Tom McKeown was recently the CEO and Co-founder of TrenData, which was acquired by isolved HCM in 2021. He currently manages the product team and business unit for their People Analytics offering.

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