Staff turnover is an inevitable part of any business, but how it is handled can make the difference between an angry, disgruntled employee and one that leaves the company with feelings of goodwill. An ill-planned exit by one employee can cause the spread of negative information internally, and has the potential of reaching future potential employees in extreme cases.

The frequency and need of exit planning should not be ignored, and while the cost of replacing an employee can be considerable, it can also be an important source of information and provide an opportunity to examine workplace practices and culture.  

Pros and cons of staff turnover

Pros:

• Creates opportunities for upward mobility
• Encourages staffing flexibility
• Attracts employees with new ideas and experiences into the business
• Reduces frustration of employees staying in the same job – for both them and subordinates

Cons:

• Costs of replacing employees including advertising, recruiting, orientation and training
• Potential of losing high performing members
  (Neal, 1987)

All companies should have formal, standardised exit procedures to make sure a positive employer brand is upheld. Best practice includes the following:

Exit Interviews

An exit interview is often a verbal, face-to-face interview but can involve an online survey or be conducted over the phone.  It provides an employee who is leaving the opportunity to discuss their time with the organisation, their perceptions about the organisation, workplace morale, what they liked about the company and what they would change.  If the employee is departing because of sensitive issues such as harassment, discrimination etc., then legal advice should be sought before conducting an exit interview.

Some of the benefits:

- Ensure that the employee feels cared for and respected by their employer, and that their voice is being heard

• Understand the basic reasons behind the employee leaving
• Enables transfer of knowledge and experience from a departing employee to a new employee
• Provides information on how to make the organisation a better place to work, leading to changes in satisfaction and ultimately higher productivity
• Exit interviewing is a straightforward procedure that can be incorporated into the resignation processes
• Reviewing summaries of exit interviews can assist in identifying causes and trends which may be contributing to staff leaving and help employers consider options to prevent future staff losses

Exit checklists

The exit checklist provides a structured and practical tool to ensure all processes are completed.  The best person to complete the checklist is usually the employee’s supervisor and should be done on the day they leave.

The checklist can include:

• Handover information, if possible try to begin organising necessary tasks and information that needs to be shared as soon as it is known the the employee will exit
• Collect any company property such as credit cards, mobile phones, keys, security passes or password information
• Notify all relevant areas of the business, eg. Payroll, IT
• Disable access to the building and computer network
• Review any existing contracts and what expectations of the employee may remain post-employment
  Be sure not to leave any loose ends behind.  While you may have the highest level of trust with your exiting employee you need to know that only existing staff have high level access in the future.

What happens if you don’t have a good employee exit process?

• Legal action (unfair dismissal) – while unfair dismissal claims may not always go to court, the time and money associated is enough to do some permanent damage to your productivity and public image
• Use of intellectual property – it is likely that your employee may use their skills in a similar environment.  It is your responsibility to make sure that reasonable limitations are set with insider knowledge and trade secrets through relevant agreements.
• Brand damage – all your efforts in creating and maintaining a positive workplace can be ruined when people believe that you care more about short term gains than the overall care of staff.  Today information travels much faster than before, especially through social media.  It doesn't take much for potential candidates to dig up previous information or rumours about how staff have enjoyed (or not enjoyed) working for you.

Implementing a sound Exit system

Psych Press provide a structured online exit survey that effectively assesses an exiting employee's feedback. Whilst face to face meetings can gather some emotional information, an online assessment aims to build your trend analysis information to allow you to identify areas of improvement for long term satisfaction and growth. Talk to a consultant on 03 9670 0590 or email [email protected] to find out more.

Human Strategy making Technology Work Harder “Translating strategy into online efforts means not just considering the short term benefits of quick and cost effective recruitment”

Key messages

• There are areas to consider when strategically aligning yourself to online sourcing, there are also areas to consider when aligning yourself to online assessment.
• The specific nature of which online tools to use depends on the nature of the enterprise
• The human resource balanced scorecard approach is helpful in establishing “managing by measurement”

The potential employer asks the candidate to come in and sit down. After the usual pleasantries are exchanged, the employer says, “So, I do not like to formalise an interview with a lot of stock-standard questions, so I thought we could just have a conversation and see where it leads.” What follows is an unstructured discussion that goes nowhere. Such an interview is not uncommon among those with limited experience or training in recruitment methods. The use of online tools to improve the speed and cost-effectiveness of the recruitment process can translate into a process more effective than this hypothetical interview and other traditional hiring methods when used objectively in accordance to goals. When done well the benefits are considerable: a major telecommunications company in the UK found it could improve its reporting systems, improve retention rates, and save thousands on every hire using online systems (Pollitt, 2008).

So how can human resource practitioners utilise online recruitment tools both to enhance effectiveness of the process and improve the chances for success? Let us consider the use of online recruitment tools at two steps of the process: sourcing candidates, and assessing candidates.

Online Sourcing: considerations to make it work for you

Online sourcing methods are very popular amongst the available online recruitment tools, comprising activities such as placing ads on job boards or searching through business networking sites for potential candidates. They are now so common that traditional methods such as newspaper advertising can be perceived as out-of-date. One of the key benefits of using online recruitment and selection tools is their automation. With the average internal recruitment department being—according to one researcher—fifty recruiters maintaining workforce headcounts of up to 170,000 workers, the number of candidates and appointments being made by the average recruiter requires not just standardisation but automation of much of the process (Veger, 2006).

Online recruitment tools such as automated pre-screening of candidates is useful for time-efficient accuracy, but is made increasingly useful when the human interaction can understand its best placement.. In these terms, the tools used can be considered as either “we find you” or “you find us” approaches: “we find you” is where the recruiter actively searches for suitable candidates to approach, while “you find us” is where the role is publicised so that potential candidates can apply (Veger, 2006). Making online recruitment tools work better than alternatives means measuring and taking actions to improve, as well as avoiding those activities that will not gain advantages or even result in poorer outcomes. Take for example the inclusion of an “Employment” section on the typical enterprise website: unless the employer has a strong employer brand—or even a strong employer brand in a niche market—such a page is unlikely to result in a good pool of candidates (Parry & Tyson, 2008: 23).

Where people need to make strong considerations revolves around the message portrayed versus the typical viewers behaviour. For example, a job ad for a part time fast food chain opening may receive the right attention when giving the bare basic details of remuneration, location, and what is required whereas a new opening for a Marketing Manager will need to go to more depths to show the key benefits of working in the organisation and perhaps also show off media that gives an air to what the seeker can expect to give them an idea of whether they could align their goals to that of the business. In order to understand how different online sourcing and channel options benefit your campaign, we need to address a few questions to avoid over or underselling and also avoid investing in the ‘biggest’ option when a niche player may be far more effective: 
1.    Is this opportunity open to specialised or large scale personnel? 
2.    Will my message and channel choices attract a high pool of lesser quality candidates that may incur larger screening costs early in the process? Or is there an option to source a small pool of high quality candidates to increase my budget down the line? 
3.    What is my preferred time and cost expenditure against when I need to see a new candidate perform?

Once you can comfortably put the above considerations into your goals and then action plan you should be able to successfully judge between different online sourcing options, and not ‘over-reach’ or under-sell your opportunity to the wrong pools. After such time, online mechanisms catered to usability can do the rest.

Online Assessment:  From why, to when, to getting results

One of the methods used to improve the chances of hiring success (and avoiding painful ‘bad hire’ failures) is the use of testing. Historically this has been done through ‘pen and paper’ style assessments and face-to-face simulation conditions. For the sake of linking online sourcing to online testing and ongoing performance, let us focus on what is being taken on board more frequently in recent years with virtual and online testing.

For the typical employment process, the use of online tests is firstly seen by some as challenging because the potential for cheating is seen as a concern; however in most hiring tests that measure important ‘fit’ factors it is not possible to cheat as there are no right or wrong answers, and follow up questions dictate how truthful someone is being about their attitude or behaviour. Another concerning factor is that the pragmatic reality for human resources is that the choice is between online testing and no testing at all. If no tests are undertaken then the success or failure of a hiring decision rests on the intuition of the recruiter. While the typical recruitment process can find some information through reference checking and interviews, the lack of testing means that incorrect or misleading information in résumés and at interviews may not be detected, and a true ‘fit’ is never validated or recorded.

Once you have your pool of candidates from online sourcing and have already understood the benefits specifically for your organisation in utilising online assessment, you are then able to look into what your business needs. Just as choosing a sourcing channel online relies on the specialisation, goals and budget, so too does online assessment rely on how much information you need to accurately extract from your particular pool size against how much value (hence; budget) the role in question can bring into your business. The below questions should be addressed to help give you an idea of this.

1.    Do you have a set of Capabilities that have previously shown the desired performance level of this role? Alternatively do you have a Competency Model for this role?

2.    How do the outcomes of this role along with the necessary capabilities align to the strategic goals of your organisation? Are you generating a shopping list of what you’d like in a person or do you know which skills and abilities typically create the strongest ongoing value for your business against the role and the core function your business delivers.

3.    What kind of time and money budget are you allocating to finding the best performers for the role/s? Do you need 100 fast food personnel, or 1 manager? Would you like the person to stay within the role for 12 months, or 12 years? The budget could be the same, it all depends on the above.

Measuring the costs of traditional alternatives

The value of online testing can also be explained when considering the alternative of the in-house test or the proctored test. Proctored testing is where a proctor or invigilator is present as a supervisor of the test, such as happens in school or university exams. This limits the potential for simplistic cheating such as the test being taken by a person other than the candidate, and controls the conditions under which the test is taken. For human resources, this is expensive as it requires the provision of a test centre, staff and equipment while also being inconvenient for the candidates. The in-house test is outside practical opportunities for all but the largest enterprises: the cost of developing and testing the veracity of an assessment includes financial costs as well as the need to test it with vast numbers of test-takers, or at least using highly sophisticated—yet not as reliable—statistical methods (Tippins, 2009).

Online Success is a Strategic Decision

Online recruitment and selection tools such as job boards and online assessments are useful when they are used in a strategic and informed way. Following a popular online option must still cater to your needs and goals to be relevant to any online strategy. The very nature of strategy aims to achieve a set of goals in the long term. Translating strategy into online efforts means not just considering the short term benefits of quick and cost effective recruitment, but how this impacts your over-arching objectives and how things like the retention behind a good hire will give you time back from greatly decreasing turnover, for example.

The success of online recruitment depends on the interplay of two key factors: the nature of the people using them, and the strength of the strategy behind its use (Parry & Tyson, 2008: 9). People are influenced by a range of rational—but also emotional—reasons which can encourage them to use methods such as online recruitment whether it works or not for them, or discourage them from trying in the first place. Organisation structure, particularly strategy can also have an influence on the use of online recruitment tools: some businesses allow or even demand that all openings are placed online regardless of the strategic benefit of doing so.

Table 1: reasons online recruitment is used
Cost effectiveness	75 %
Easy to use by candidates	64 %
More candidates	53 %
Easy to use by the enterprise	52 %
Speed to hire	52 %
Company policy	50 %
Success in sourcing candidates	44 %
Competitive advantage	32 %
Source: Parry & Tyson, 2008: 14

Which online recruitment tools are used, and how they are utilised needs to be dictated by strategy. The strategic benefits will also differ according to the nature of the organisation using it. Yet often the reasons are less than strategic: research suggests that online recruitment is used to improve traditional ideals such as faster recruitment at lower costs rather than a strategic attempt to improve quality of hire or retention of appointments (see Table 2). Indeed, seeking to broaden the search by going to more undifferentiated and larger online recruitment pools appears to be a typical reaction when an enterprise is having trouble finding suitable candidates, signalling that online recruitment suffers from being both a scattershot and ad-hoc approach (Parry & Tyson, 2008: 20). What human resources practitioners need to do to combat this is to develop a strategy that identifies, compares and measures recruitment and selection tools and outcomes, regardless of the specific type used in any particular case.

A Balanced Approach…

Veger (2006) suggests that enterprises can use a Balanced Scorecard-based approach modified specially for human resources. The benefits of such an approach are twofold: it is top-down from organisational strategy, and it includes both financial and non-financial measures (see Table 3). 

Table 2: The HR Scorecard

1.    Clarify and articulate the organisational strategy 2.    Develop the business case for HR as a strategic asset 3.    Create a strategy map 4.    Identify HR deliverables within the strategy map 5.    Align the HR architecture with the HR deliverables: HR functions, HR systems, and strategic employee behaviours 6.    Execute a “management by measurement” approach

Source: Veger, 2006

Ultimately the most important factor is not simply in following the crowd, or implementing a recruitment method because it is policy, but it should be carefully researched and constructed to deliver on both financial and strategic imperatives of the enterprise. Knowing ‘why’ something works is just as important as knowing ‘what’ works—even more so if you consider that knowing why something works will provide valuable information to help replicate that success in other areas.

Regular recruitment activities are routine for almost every business, yet the need to review and update effective processes are often forgotten in the hustle and bustle of everyday work. The standard process of recruitment and selection follows a well-worn path of defining personal and position descriptions, sourcing candidates, screening applications, developing shortlists, conducting interviews and reference checks, and making a job offer. The exact nature of these activities may differ slightly between countries and over time with legal and technological advances, but they have remained essentially the same for decades.

Sourcing candidates by asking high-performing employees who are already working in the enterprise for referrals is still popular, and reference checking is reappearing as a valuable source of supplementary information to business and social networking sites. According to research published by Beaman and Magruder (2013), finding potential recruits through current employees is becoming more popular. Their research found 45 per cent of employees had helped friends and relatives secure employment. Similarly, in the United States between 30 and 60 percent of employment decisions are influenced in this way. This has benefits for employers and employees. Employers can use it as a screening mechanism, particularly when they include a ‘pay for performance’ component in rewarding referrers, while potential employees find it lowers the costs of job searches. 

Risks in Referrals and Finder’s Fee schemes

The obvious yet frequently overlooked risk in these methods of sourcing candidates is that your current employees lose time in completing their important deliverables. It’s very easy to fall into a pattern of believing this process is quick and easy to complete only to realise that much time is lost to back and forth communication and information exchange. Considering networks can be a great starting point to the recruitment process, but be sure to place a cap on time and ‘promises’ exchanged with the outside world.

Another reoccurring risk in sourcing candidates this way is determining whether the candidate is being put forward because they’re good, or because it’s a favour: in other words, who exactly is going to benefit the most if they’re appointed? You can reduce this risk so long as you do two things: 

 First - high-performers are better at identifying and recommending other high performers, so consider how to limit any referral program to employees who do well themselves. 

 Second - instead of paying a flat finder’s fee on appointment, consider ways to link the referrer’s reward to the performance of the candidate in the job. Beaman and Magruder’s (2013) study found that employees were seven per cent less likely to refer relatives in “finder’s fee on performance” schemes.

Validating with Reference Checks

Of course, there is no silver bullet in hiring, and recruiters are always looking for new ways to further improve the reliability and validity of the predictive tools available to them.  The popularity of reference checking as one of these tools has re-emerged for several reasons: the desire to reduce risk in the hiring process by improving the quality of hires, the reestablishment of favourable legal structures in some countries, and empirical support for the value of reference checking.

However, the best reference checking requires a disciplined and methodical approach of asking referees to provide specific and routine answers to questions that are not only consistent across candidates, but also identify a candidate’s required developmental areas and performance strengths. This can then be compared to other sources of information as well as between candidates (Hedricks, Robie & Oswald, 2013).  Focussing on reference checking as a comparative tool can also help temper any overenthusiasm by individual employees involved in the hiring process and alert hiring managers to issues with online information, such as intentional overstatements, or unintentional instances such as people with the same name showing up in online searches.

Taking personality predictors on board - Conscientiousness

Finally, to supplement the suite of psychometric and other testing procedures, the trait of conscientiousness can be useful. Personality traits are useful predictors of performance and research on conscientiousness has shown that this facet is particularly useful. But, its value in predicting performance decreases as the cognitive requirements of the job increase. While it’s still useful to assess for conscientiousness no matter the job, it should become less of a priority in the final decision for higher-level jobs. As with any psychometric assessment tool, expert advice will help you implement it correctly and effectively into your process.

In order for human resources practitioners to improve the recruitment and selection process they should consider increasing quality sourcing with performance-based rewards for candidate referrals, improving reference checking with objective comparative tools, and assessing candidates for key attributes such as conscientiousness. These improvements in sourcing, screening and testing candidates help provide hiring managers with more comprehensive and cross-checked information on candidates.

Understanding the need for video and phone interviewing tools

Thought leading and innovative Australian hiring managers are now learning more about the latest advances in virtual interviewing. Voice Advantage allows you to quickly interview hundreds (and even thousands) of applicants online with a constant goal being the effective adoption of new technology to eliminate laborious aspects of the entire recruitment process (phone tag, courtesy calls, setting up interviews for starters). An important notion to remember is that not all recruitment processes are focussed on time management. Managed effectively, adopting pre-recorded interviews through a customised platform gives you earlier access to A-grade applicants whom you have limited time frames to hire due to their universal appeal. By using a controlled and uniform interview process you also gain a fair, recorded and defensible benchmark to refer back to during early stages of employee development.

For more information about how utilising an online interview platform relates to your hiring needs be sure to call us on +61 3 9670 0590 or email [email protected]. We also have a free online interview demo available for you.