Isn’t it ironic. Companies spend anywhere from $2,209 to $11,209 to hire a new employee, according to Staffing.org, but few put much effort into helping workers acclimate and become productive. The result is that many workers quickly leave or take longer to reach what economists call the “break-even” point–the point at which, basically, a new worker stops costing the firm money and starts making some.
Every minute that a worker’s break-even point can be accelerated helps build the business and contributes to the bottom line. Quint Studer, CEO of the Studer Group, a consulting firm in Gulf Breeze, Florida, finds that companies that take steps to “re-recruit” new employees can accelerate performance and reduce the costly problem of workers leaving in their first three months by as much as 66 percent. A survey of 610 CEOs by Harvard Business School estimated that typical mid-level managers require 6.2 months to reach their break-even point.
“The job of recruiting doesn’t end when someone signs on the dotted line and comes to work for you,” says Bill Catlette, a management consultant and co-author of Contented Cows Give Better Milk. “You have to be constantly in the mode of making sure the goals of the organization and the individual line up.”
The concept of re-recruitment has been most widely adopted, consultants say, by service industries like restaurants and hotels, where turnover is both high andcostly. A report by the American Hotel and Lodging Association found that it takes about 90 days for a new employee to reach the level of productivity of an existing worker. If new hires don’t receive proper training and support early on (as they do at companies likeNational City), though, 47 percent leave their jobs within the first six months.
Sonesta Hotels, a family-run chain of 18 properties on the East Coast of the United States as well as abroad, has developed a formal program to continuously acclimate new hires to their jobs throughout their first 100 days. This effort to boost performance and lower turnover is especially important in the hotel industry, which has suffered three tough years during the economic downtown. Over the past 12 months, Sonesta has lost $4.8 million on revenues of $85.6 million. The main thrust at Sonesta is to re-recruit workers on their 30-, 60- and 90-day anniversaries.
At 30 days, the human resources director sits down with new employees to see if their expectations are being met, and whether they have all the tools they need to perform their work. “This time period is far enough into the job so the employee has an idea what it’s like, but not so far down that adjustments can’t be made if necessary,” says Grace Andrews, president of Training By Design, a Melrose, Massachusetts, company that runs the program.
At 60 days, new employees receive a second orientation, called “the Booster.” The focus is on developing the workers’ communication and service skills. The company also solicits feedback about the employees’ training, and asks them what else they need to be successful, Andrews says.
At 90 days, employees have a formal review with their manager, which focuses primarily on joint goal-setting for the rest of the year. “It’s more of a conversation than a review,” Andrews says. “People don’t want to be graded; they want to know what their future is.”
Studer says that in the health-care field, surveys indicate that more than 25 percent of employees leave within the first 90 days. The Studer Group found that organizations can reduce that costly number by two-thirds using 30- and 90-day re-recruitment meetings. It recommends this process as a core retention strategy for the 250 hospitals it coaches.
Quint Studer, author of the upcoming Hardwiring Excellence, tells supervisors to ask five key questions to head off potential problems and cement early retention:
How do we compare with what we said in your interview process?
What’s working well?
Which individuals have been helpful to you?
On the basis of your past experience, what systems or ideas do you feel could improve our operations?
Is there anything you are experiencing that would cause you to think about leaving?
Up to speed faster
Some companies find that the best way to bring new employees up to speed quickly is to have veterans share their “secrets.” Michael Watkins, an associate professor at Harvard Business School and author of The First 90 Days, worked with one company that accomplished this by selecting 10 employees who had been with the firm for two to three years. This was long enough to know the terrain, but short enough so they remembered what it was like to be the new kid on the block.
The 10 employees–all of whom were articulate and successful in their jobs–were videotaped candidly answering the kinds of questions that new employees have, like “What do you wish you had known about this place when you started?” The responses were edited into a 30-minute video that was handed to each new employee immediately after hiring.
Watkins notes that a new employee’s relationship with his or her boss is the top factor in determining failure or success. In his book, Watkins details five key conversations that every boss should have with a new employee early on:
The Business Situation. Is it a turnaround, a start-up or a realignment? How did the company reach this point?
Expectations. What does the employee need to do in the short term and long term? How and when is the employee’s performance measured? What constitutes success?
Style. How can the boss and employee best interact? Does the boss prefer communications in writing or by e-mail? What kinds of decisions does the boss have to be consulted on?
Resources. What does the employee need to be successful in terms of equipment, funding and personnel?
Personal Development. How will the job improve the employee’s personal development? Are there projects or special assignments he can do without neglecting his main duties? Would courses or programs strengthen his capabilities?
Many of the five conversations that Watkins cites are as much negotiations as dialogues. Of course, not every manager is skilled at discussing such matters. Some companies that he works with, including Johnson & Johnson, use online tools to cascade these practices down to managers. The Web site designed for this purpose provides forms that both managers and new employees can fill out before the conversation about, say, setting expectations, to keep the dialogue on track. “The key for this to be successful with line managers is to keep it simple,” he says. “If it’s more than one page, people’s eyes glaze over.”
Don’t wait a month
Managers should try to connect the new hire to key people throughout the organization. At the start, managers should hand a new employee a list of 10 individuals that she should touch base with early on because they will be critical to her job.
Smart companies also look at the social aspects of a new employee’s indoctrination. “Let’s say a department with a staff of six had its regular monthly staff meeting a week ago,” Catlette says. “If a new person starts today, you shouldn’t wait a whole month to hold the next staff meeting, even if you don’t have the most robust agenda.”
At Sonesta Hotels, managers are “highly encouraged” to take the new hire and the entire department out to lunch during the first month to foster team-building. At first, Andrews says, departments that have less of a people focus, like accounting, bristled at the notion. “That attitude started to shift when they saw the benefit of having people talk in an informal setting,” she says. “New employees learned a lot about their jobs and came up to speed much more quickly.”
The departmental lunches are best held 20 to 30 days after a new employee has started. Before that, new workers are usually too overwhelmed with learning their jobs to benefit from the informal exchanges.
There’s no question, in Sonesta’s view, that this kind of attention to new hires is essential to retention. “With it, they become good employees faster,” Andrews says. “Without it, they often don’t stay.”