Struggling to Retain New Hires: How Can We Improve Our Hiring Process?

Dear HR, I have been working with a mid-sized IT company for the past year. From the beginning, I have been facing an issue with hiring people for the company. Candidates come for interviews and get selected, but they do not end up joining.

Current Hiring Policy

Our policy states that anyone joining our company must sign a Service Level Agreement committing to a minimum of 18 months of service with us and a bond agreeing to serve a 2-month notice period.

I would appreciate your suggestions on any potential modifications to the hiring process that could help us attract and retain quality candidates.

Thank you.

Challenges Faced by Mid-Sized Companies in Hiring Talent

Mid-sized companies have always found it difficult to hire talent. The expected skill set is more or less the same as that of giants, but the big companies command higher brand equity and can also afford higher salaries. I know the cost of hiring and training a resource. It wouldn't be feasible for a company if an employee joins, acquires training, and then moves out in 6 months. The attrition rate could be 25% to 30% in mid-sized/start-up companies.

At the same time, when you ask them to sign a bond for 18 months, it makes the employees think twice. They always keep hoping that they would get an offer from a blue-chip company and won't be able to move if there is a bond.

Evaluating Workforce and Attrition

Sit with your management and find out which would hurt you more: working with a minimal workforce or experiencing attrition of 1/3rd of employees every 6 months.

Carrot or Stick Approach

We all know the Carrot or Stick theory. Try a carrot method instead of the stick (service agreement).

As a temporary measure, you can do away with the service agreement. Announce an accrual joining bonus of 10000 for those joining before 31st August, which would be paid after successful completion of 6 months in service. I do not know if this would work, but if I were in your position and able to convince the management, I would do this.

Once people come in, I am sure you can do your best to retain them for a longer period.

Regards,

Sivaramakrishnan

[Phone Number Removed For Privacy Reasons]

Mr. Sivarama Krishnan has come up with a good suggestion of offering a joining bonus in lieu of a service agreement to attract candidates. You can also consider using the carrot of a retention bonus payable to those who stay with the company for one year to retain them. Hopefully, this approach may also be beneficial. A service agreement with a mid-sized company may attract a candidate who is desperate for a job, but then arises the question of whether such a candidate will deliver the desired results.

Regards,
B. Saikumar
In-house R & IR Advisor

The Fundamentals of Hiring

Remember the first fundamental: hiring is not everyone's cup of tea. Interviewing is like conducting a religious function wherein you have to connect with the candidate in 10 to 15 minutes. If this process is established, then you need not interview an endless number of candidates, as advised by one of our members, and waste your valuable time. You need to analyze what went wrong and rectify these deficiencies in the existing process. There can be some gaps. It might be that you are not using the right tools to pinpoint the right candidate.

Evaluating Compensation and Opportunities

Finally, everything boils down to money. Check if you are paying on par with other organizations. It's a great thing that you have openly admitted your problems. Don't look at it as a problem. Look at it as some possibilities, and you will end up with some nice solutions.

Best of luck.

The points mentioned here are valid, and adhering to them helps you be in a better position. Beyond them, there are a few factors listed below:

Is the 18-Month Agreement the Real Hindrance in Joining?

Though I am against the concept of service agreements or bonds, I still feel it's only one point among others for the dropouts.

• How much do you engage with the offered candidates? We need to make them feel like a part of the company family even before they join. Don't just call them and confirm the joining once in a while. Share some updates or recent developments with them, creating a feeling in the candidate that the company is considering him/her as a part already.

• Why should they join you? How clear are the candidates about the opportunity available and the career progression? What will they achieve if they spend the 18 months or more with you? This clarity and transparency play an important role in convincing the candidates.

• How well do you read the candidates? Not all candidates are job seekers. Some are just checking out opportunities and attending interviews to increase their market value or negotiate with their present company. (I am not saying all candidates belong to this group, but a significant number does.) Conduct a thorough level of screening and HR interview before the offer to understand the candidates in-depth.

• How well did you negotiate with the candidate? Salary negotiation plays an important role. While candidates may have high salary expectations, how efficiently and convincingly we negotiate is key.

• How good is the process? The interview process and delays in decision-making are factors that some candidates consider when selecting the next company. If updates/feedback are not provided on time, delays in response from HR/recruitment teams, or delays in processing the offer create a negative image of the company in the candidate's mind. He/she may feel the same will happen once they are inside, not creating an encouraging atmosphere.

There is more to add. Do a good search on the topic, and you can find good articles and case studies by industry experts.

Regards,
Bibin Kurian

I don't think there is any legal binding when you are framing rules. First, prepare a manifesto of your company—what are the goals of your company and how does your manifesto outline the way to achieve these goals? It should be very clear, honest, and easily understandable for the applicants. Why are such rules being created? What is the responsibility of the employee in carrying out their job? I mean to say, the employee should embrace the company's motto to fulfill their duties.

Regarding your challenging task, start by asking your applicants about the difficult parts of your agreement rules. Consider deleting or modifying based on the suggestions of your applicants if you aim to enhance your company's status. All the best.

Suggestions for Improving Hiring and Retention

Following are my suggestions:

• Hire more people. It increases the probability of new members joining.

• Take the help of Naukri, Monster, and other job portals to scrutinize candidates.

• If you are hiring freshers, the best possible solution is campus recruitment. Visit a reputed college in your locality and conduct interviews.

• Compare the salary package, timings, and other benefits in your industry.

• Decrease the bond period to one year.

• Complete all rounds of interviews in a single day and provide the joining date immediately.

Regards,
Srinivas Tanku

Improving the Hiring Process

I am assuming you wish to know where you feel you are going wrong in the hiring process. A couple of things to keep in mind when hiring are:

- Is the job description exactly matching the requirement? An easy way to make this better and more specific is to have the position supervisor prepare it. If he/she is unable to, you need to sit with the supervisor and prepare this document with clear specifics of what the primary task will be, what the secondary task will be, and what additional responsibilities may be assigned. If it is a new position, the person who has created the new position needs to likewise be involved.

- Is there a career progression for the person who takes up the position? People like to know where they are headed in their career path. If there is a chart that can show the candidate what their possible career path will be like, it helps.

- You could work out a performance-related bonus with KPIs chalked out clearly for the year or indicate to the candidate that this will be initiated upon joining.

- Who is in the interviewing panel? Is the supervisor involved? It is always sensible to have the supervisor interview the shortlisted candidate at least once.

- Seek three references from the candidates - one from a former or current supervisor, one from a work colleague, and one from a junior who the person supervised. It gives you a fair view of the person you are hiring.

My advice is, never get into desperate hiring. If you hire an A Player and he/she joins, the firm will progress. Hiring someone who is there only for a job but won't enjoy working there is a slow productivity killer.

Also, be specific about the budget and shortlist candidates who fit the budget. It helps sieve out those who are not likely to join later.

Where are you located? If you need assistance, please feel free to contact me.

Best regards,

Sandhya Suri

[Phone Number Removed For Privacy Reasons]

Recruitment is like sales; the more you meet, the higher the conversion rate. Increase your job postings and recruitment resources to attract an adequate number of candidates. Desperate candidates are likely to join the company, but it may take time to identify them. Keep recruiting and communicate that you are hiring for a specific domain; this strategy is effective.

Regards,
Senthil Kumar

This seems like the best approach. The only consideration is that you may need to invest more in advertising and job postings. However, the potential benefits make it worth the investment.