How to Increase Employee Retention Through Skills Testing
Posted by Kelly Painter
HR professionals have many responsibilities, from recruiting to hiring to retaining talent. Although recruitment traditionally gets a lot of attention, retention is just as important, if not more important. HR professionals need to focus on finding ways to increase employee retention. This is where skills testing comes in. Incorporating skills testing into the recruitment process is a proven way to help companies make better hiring decisions and increase employee retention.
Employee retention is usually talked about in terms of companies working to prevent their employees from leaving for greener pastures. However, this is only one side of the retention coin. Retention also depends on the ability of employees to succeed on the job. More than preventing employees from leaving the company, retention is also about hiring smarter to avoid terminating employees who don’t perform as well as expected.
One way to hire better candidates who will succeed on the job is by administering pre-employment skills tests to determine whether a candidate really has the skills he claims to have on his resume.
According to a CareerBuilder survey of more than 2,000 hiring managers, 56 percent stated they have caught candidates lying on their resumes. The most common lie: embellishing skills or capabilities, according to 62 percent of respondents.
Retention depends on hiring employees who are equipped to succeed on the job, which means that finding the right candidate with the right skills is crucial. Given that the majority of applicants lie about their skills on their resumes, skills testing can help hiring managers verify that candidates actually possess the skills they claim to have. Instead of relying on possibly fictitious resumes, hiring can be based on hard facts and proven evidence that an applicant can really do the job.
Finding candidates with proven skills becomes even more important for retention in some industries. CareerCast projects certain jobs will be especially difficult to fill in 2016 due to a lack of applicants with the right skills. Jobs like electrical engineer, information security analyst and software engineer. To fill these jobs, hiring managers will have to find candidates with proven hard skills.
Retention is also linked to realistic job expectations. Skills tests can help present a realistic job experience through job simulations—a test that simulates real workplace scenarios. When presented with this type of test, the candidate gets a taste of what the job will be like and can make a better informed decision to join the company because he knows he’ll be able to succeed and therefore grow his career within the organization.
When considered monetarily, skills testing can help companies save through improved employee retention. In an article for LinkedIn about employee retention, Josh Bersin of Bersin by Deloitte outlines some of the factors that contribute to the real cost of losing employees. These include the cost of hiring a new candidate, the cost of onboarding a new employee, the loss in productivity, training costs and cultural impact.
Bersin refers to a study by the Center for American Progress, which estimates that the total cost of losing employees can be as much as 2x the employee’s annual salary. The study found the average cost to replace an employee to be about 16 percent of annual salary for low-paying jobs (a retail employee earning $10/hour would cost $3,328 to replace); about 20 percent of annual salary for mid-range positions (a manager earning $40k would cost $8,000 to replace); and up to 213 percent of annual salary for executive positions (a CEO earning $100k would cost $213,000 to replace).
Considering the high cost of replacing lost workers, especially in jobs where skills testing applies, the monetary value of skills testing is, at the very least, in the tens of thousands.
Have you seen improved employee retention in your company thanks to skills testing? Would you consider including skills testing in your recruiting strategy to help reduce turnover?
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Kelly Painter, Vice President of Sales, has over 12 years of experience working in talent management.