Josh Merrill, Co-Founder and CEO of Confirm.
Employees leave for a number of reasons, including not being recognized for their work and feeling undervalued, but one thing is clear: Attrition is costly.
LinkedIn reported a 12.9% employee attrition rate in the tech and media industry between 2021 to 2022, which was the second highest of all industries. And the cost of replacing an employee ranges from 1.5 to two times an employee’s annual salary. Replacing a high-performer or an employee in a senior-level position can be even higher.
I believe that three key changes to my company’s hiring process helped retain top talent and achieve zero regrettable attrition. These changes helped attract better-fit candidates and hire employees who aligned with my company’s mission, values and culture.
The following are the hiring practices we used that I believe can help you attract better-fit candidates.
1. Craft detailed job descriptions.
Most job descriptions are just a laundry list of skills and responsibilities. If you scroll through LinkedIn, they all tend to look the same.
I recommend making visual presentations (deck style or otherwise) that offer:
• More insight into the purpose of the role.
• What success looks like in the role and what will help a candidate succeed (and what won’t).
• Areas of ownership and collaboration for the role.
• What life is like at the company.
• Who the founders are to give candidates a feel for the culture.
Detailed job descriptions help weed out the candidates that would likely not be a good fit long-term. The more detailed you can make your job descriptions, the better.
2. Follow a ‘first and best’ job offer policy.
The “first and best” job offer policy means candidates are presented with the highest and most competitive compensation right from the beginning, prioritizing fairness, transparency and trust. This goes a long way to reducing the systemic pay gap between men and women, especially women of color.
Implementing this policy does mean there are no salary negotiations. Will you lose candidates due to this? Yes.
But, consider this: Having a company where those who negotiate aggressively are paid more than those who don’t can create internal inequities and dissatisfaction among employees. By adopting this policy, you prioritize fairness.
Research by Gallup revealed that one of the key changes “quiet quitters” want to see in the workplace is fairer treatment. By implementing the first and best policy, you can foster greater equity and maintain a level playing field for all.
3. Share transparent job offers.
My company’s job offers include a lot of detail and context. Most employers use an offer letter template from their human resources information system—typically, a one-pager listing the role title and details such as salary, benefits and stock options, along with terms for acceptance. Again, something like a slide deck can provide these details plus:
• Who’s on the board.
• Its preference stack (which explains how much funding the company has raised and how much it’d need to sell for in order for employees to make money).
• Stock option dilution details.
• A primer on equity.
• How vesting works.
It’s unusual to see this level of detail in job offers, but it works. You want your team members to understand exactly how everything works and what to expect so there are no surprises later. Because startup compensation typically relies heavily on equity, it’s crucial to provide details instead of glossing over them.
Candidates know themselves better than companies ever will. By leading with transparency, they can make informed decisions about their fit within your company. If they realize it’s not a match early, it saves them from negative experiences and it saves you from costly attrition down the road.
The proof is in the numbers.
Not only has implementing these hiring practices led to zero regrettable attrition and helped retain top talent, but 60% of my employees are from referrals. I believe this demonstrates the high level of trust our employees have in our fair treatment of candidates and hires.
I believe that transparency is often lacking in HR, yet it’s needed now more than ever. Being upfront with candidates is the best way to ensure alignment on expectations, increase the likelihood of a good fit and boost their chances of success in the workplace.
Doing things a little differently at my company is working. I encourage you to try these strategies for hiring within your own organizations.
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