Subscribe by RSS
Subscribe by EmailCompany Recruiting, Hiring, and Retention Practices Impact Bottom Line
Do your recruiting, hiring, and retention practices really affect your company’s “bottom line?” Or, is one set of practices just as good as another set of practices?
Now comes a study by Watson Wyatt, which shows that your recruiting, hiring, and retention practices really do make a difference.
The study looked at a variety of such practices, including the use of employee referrals, the speed with which vacancies are filled, the percentage of positions filled with internal versus external candidates, and the rate of turnover.
The results were interesting: Employee referrals were associated with higher returns to shareholders;
Companies that fill positions within two weeks provided higher total return to shareholders — 59 percent, compared to 11 percent at companies that required at least seven weeks to fill positions
The best firms take a more balanced approach to hiring non-entry-level positions, filling roughly half of these positions internally . . . . Firms that fill fewer positions . . . tend to have the lowest returns . . . , while those that fill the most non-entry-level positions internally . . . also have lower performance . . . .
Lastly, too much and too little turnover was bad for an organization.
Read more on this interesting press release regarding return to shareholders and various HR practices.
Sphere: Related Content
Related Posts
If you enjoyed this post, please consider leaving a comment or subscribing.
Both employee referrals and internal promotions are practices that for some companies can be criticized as having a disparate impact, by perpetuating existing racial or sexual imbalances.
Perhaps a study like this will be valuable ammunition in defending such claims by showing the business necessity of such practices, though that is a hard standard to meet.
Alternatively, short-term return to shareholders may not be the only measure of business success [George, you're a heretic and will burn in corporate hell for that!]
For an employer particularly vulnerable to the type of disparate impact claim I mentioned, increased diversity may be a valuable objective in itself.
This might justify a somewhat moderated approach to referrals and internal recruiting.
Question: what is the empirical relationship between racial, sexual, or other diversity in the workforce and return to shareholders?