How to Hire Long-Term Employees
Part 1: Choosing to invest in Long-term talent.
As the Canadian economy continues to deal with the COVID-19 crisis, many businesses are still struggling to survive the financial impacts of the pandemic. In 2020 the BC Chamber of Commerce reported that 54% of the businesses surveyed has experienced a revenue decrease of more than 75%. Canada wide, 66% of businesses had experienced a revenue decrease over 50%. Hiring managers, among many other positions, have hit the bottom of their budgets, with many organizations forced to lay off workers to sustain their business. In 2020, CPABC stated that the unemployment rate jumped from 4.3% to 11.5%, putting the Canadian labour market in a severely unbalanced state. Encouragingly we’ve already seen this number come back down to 7.2%. For businesses not just looking to survive COVID, but to thrive – investing in talent remains as important as ever. This 3-part series on long term hiring will present strategies on how to hire top talent for your organization and how to keep them for the long-run.
Why is long term hiring so important now?
For companies trying to sustain their business, cost optimization has become more essential than ever, especially labour costs. For service sectors, labour costs tend to be the majority of operating costs, ranging up to 50% of total operation costs. And the cost of losing an employee and having to re-hire is significant. In fact, replacing a mid-level role costs approximately 20% of the annual salary. For higher-level roles, it could cost up 200% of the annual salary. Cutting cost in the hiring process, and therefore overall expenses, and will free up financial capacity for managers, lending to sustainable growth in the long run.
Employee retention is a crucial component of long-term hiring. It starts with a flow of talented candidates joining the business, but this is meaningless without strong retention. With a focus on long-term employee health, satisfaction, and growth, employees will be satisfied and motivated working in their positions, naturally lowering the turnover rate. Low turnover rates directly correlate to minimizing labor costs, which shows the importance of long term hiring.
Employees that have stayed with your company long-term have hopefully become veterans and mentors to help newer employees grow and become successful. Having a greater ratio of long-term staff will give your team more expertise and help improve the company culture and morale. The team dynamic will be strengthened, and employees will be around long enough to see long-term goals realized. Achieving big-picture goals leads to increased motivation, work fulfillment, and completes the cycle by improving retention.
Part 2 of the series will discuss how the time before hosting any interviews is the crucial time to consider and improve upon long-term hiring practices.