And how to fix it – because it’s costing your company dearly

New employees quit. It happens, right? We just didn’t know it was this bad: Research by specialist recruiter Robert Half shows that 91% of new employees are willing to quit a new job in the first month if it wasn’t what they expected or they don’t like the company culture.

That’s 9 out of 10 new hires, all walking in fully willing to walk right back out within 30 days. And 93% say they are willing to leave within the first three months (90 days), or in their probation period.

“In today’s market, top candidates are receiving multiple job offers and therefore have a host of criteria beyond pure remuneration. Companies need to sell the job, the company culture, benefits and reasons why they are a great place for a prospective employee to build their career,” says Matt Weston, UK Managing Director at Robert Half. “While candidates need to put their best foot forward, so do hiring managers.”

WHAT PERCENTAGE OF NEW EMPLOYEES QUIT?

In their research, Robert Half studied some 9000 new hires in 11 countries on four continents. And they found that, of the 9 out of 10 new employees willing to quit so early, 28% actually do walk out within the first 3 months.

A separate study by Jobvite in the US found that 33% of new employees quit in the first 90 days, according to PsychologyToday.

That is huge. And the implications can eat your company alive from the inside: The cost of staff turnover. Replacing staff in a short-of-skills economy is extremely costly (more on that below). And it’s money that could be used for expansion or investment instead. So we need to find out why people are quitting, and quick. (See our post on feeling always understaffed.)

WHY NEW EMPLOYEES QUIT

According to the Robert Half study, 38% of new employees say they will consider quitting because of company culture – see why company culture is important. And see why it’s particularly important to invest in your company culture in South Africa.

And they say a company’s culture is extremely apparent, too: 47% say they can tell what a company is like just from one meeting. (And there is definitely a reason why you keep having bad meetings.) 20% say they can suss out a company from the first call or email, and 17% say they make up their minds about a company in the first 5 minutes of their interview.

About 44% say they’d quit due poor organisational structure and management, which is why it’s super important to realise that we need a deeper understanding of employee’s minds and behaviour in our companies. For example, when it comes to management and structures, are you aware that people can suffer what we call mental pushback?

It’s also vital to understand how people need to grow and develop in any role with any company – see the human development cycle. And it’s about so much more than money, according to the science behind employee motivation.

WHY IT’S A PROBLEM: STAFF TURNOVER COSTS YOU DEARLY

One of the most overlooked “silent killers” inside businesses today is the cost of replacing staff. (See the effects of employee withdrawal.) Now, the US and UK measure these constantly, and we know staff turnover is costing their economies trillions every year. But we don’t have a single figure for staff turnover costs in South Africa, so we just don’t know it’s full effect.

But we do know that replacing an employee can cost as much as that employee’s annual salary – that’s still very conservative, many experts believe it could be multiple times their yearly pay. Just to replace one employee.

To put that into perspective, replacing an employee that earns about R10 000pm could cost you as much as R120 000 or more. Every time you need to fill that position. Compound that with all your hires per year and you’ll get to a figure that can cripple your business (and maybe it’s doing so already).

And even if you try to cut costs, maybe by handling recruitment internally, you’ll still feel the sting in the long run, because you’re probably tying up HR and management staff in the process – which takes their focus away from current staff and issues that will rear their heads later on as a result.

WHAT CAN WE LEARN FROM ALL OF THIS?

1 COMPANY CULTURE IS SUPER IMPORTANT

If 90-something per cent of the new people you hire are willing to quit based on your company culture, you’d better believe it’s extremely important. Start by discovering what company culture is.

2 STREAMLINE YOUR HIRING AND ONBOARDING

“Organisations must think of their attraction, recruitment and retention practices holistically. Long, drawn-out recruitment processes magnify the opportunity for a candidate to change their mind – which in turn costs the company time and money. Businesses that are serious about finding the best talent need to commit to providing an efficient and engaging experience at every stage – from initial contact through onboarding and beyond,” says Weston.

3 JOB SATISFACTION IS EXTREMELY IMPORTANT

There’s more to work today than money – remember what motivates employees. And this staggering rate of employees willing to quit seem to tie in with another shocking figure: Only 16% of employees are fully engaged in their work.

See, there’s more to fulfilling work experiences than what we’ve been led to believe by the organisational structures of the past. What worked 20 years ago when a lot of jobs were still mechanical in nature has changed now that most work is more creative. And to stay ahead, we need to fully understand what drives people – get some insights with our look at the circle of courage and Erikson’s theory.

4 IF YOU’RE NOT FOCUSING ON THIS, SOMEONE ELSE IS

Here’s another stat you should know: 23% of people who quit in the first 3 months do so because they got a “better” job offer. Better, in this instance, means another company (probably your competitor) who is taking things like company culture seriously and investing in it.

Want to know more? See how we help you create an awesome company culture through our full-service organisational development.

Got a company culture question? Ask us.

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