“Don’t trip behind the finish line!” – 5 essential steps to prevent new hire turnover in the first three months

Monday morning. Your best employee walks in and tells you they’re moving on. Ouch, right? The loss of talent. The exhausting, risky and unnerving process of finding a suitable replacement. And, last but not least, the cost of turnover makes this a dark day for every line manager. Studies show these costs can amount up to 1.5–2.0x the employee’s annual salary, including hiring, training, ramp time to peak productivity, loss of knowledge, and general impact on the company’s culture.

Employee retention is one of the most underrated success drivers of any business that relies on talent. Frankly, in today’s competitive landscape this includes almost every single company. And ironically, the first three months, being the most crucial period for starting to engage the new employee, are often completely overlooked. Which I guess is understandable. After a high intensity recruitment process, finally having found a suitable candidate, line managers want nothing else than to breathe, celebrate their achievement and get back to business. The candidate has accepted the offer, and the start date is fixed. So, for a while, finally, there’s nothing to worry about. Right?

Wrong! This is the start to one of the most high-risk, fragile times associated with retaining the employee. But the unfortunate reality is that many companies stop their efforts at this point. What this leaves is a big hole in building engagement with the candidate before showing up on their first day. To understand the risk involved, let’s take a brief walk down the different stages of the candidate’s experience right after accepting the offer.

Stage 1: Exiting their current organization. The candidate is now facing one of the hardest meetings in their career: giving notice to their current boss. No matter how determined they seemed in the interview, this is a highly emotional conversation that candidates are often not prepared for. Many line managers faced with a resignation will try everything to retain their employees, often by offering salary increases of up to 20%, flexible work options, or other benefits. Even if the candidate doesn’t accept the so-called counter offer on the spot, they are often facing a period of 2 or more weeks in their old job. A lot of time for additional conversations, other offers within the organization or emotional pressure not to leave. An estimated 10% of candidates faced with such a counter offer do not get past this stage and eventually withdraw from your offer.

Stage 2: Other options trickle in. Once the candidate is past stage 1, a feeling of calmness settles in. They have your job opportunity in their pocket, and they have managed to emotionally detach from their current gig. In this phase, the candidate really has nothing much to lose and starts to think: “What else is potentially out there?” It is very unlikely that they will go out interviewing from scratch for new opportunities. But it’s unlikely they have only been interviewing with you. And the fact that you are interested in them should tell you that your competitors probably are, too. You might have been the first to put out a good offer. But what if your competitor not only matches your offer but offers 10% more salary and a flexible work schedule? An estimated 40% of candidates are being courted by their current employer or other companies for job offers competing with your offer, even after its acceptance.

Stage 3: Expectations on the test. Congratulations! The candidate was excited enough to actually start the job and shows up at your gates 5 minutes ahead of start time. If you did a good job in the interview process and painted a great image of what it would be like to work for your firm, they will come with high hopes and expectations. The next 8 hours will be crucial to how they walk into their first weeks: Is there a dedicated and motivated person to greet them? Is there an office tour? Flowers and a welcome card on the table? Are they being introduced to colleagues? Fulfilling expectations vs. shattering high hopes are only a few slight steps away from each other but will determine the candidate’s commitment and engagement for weeks after. Only about half of the candidates that recruiters call on day one of their new job talk about an exciting and successful first day and felt welcomed with open arms.

Stage 4: Onboarding and building a work relationship. The first 3 months are the most critical time for building and defining the candidate’s commitment to the role and the company, and it is almost entirely dependent on the execution and behavior of one person: the direct hiring manager. The saying that people join companies but leave bosses rings true in many situations. If the relationship between you is not formed, cultured and vocalized, candidates are at risk of mentally checking out before they have even given the company a real chance – and don’t forget, they might have received other offers along the way that are still out there.

In my experience, about 10-15% of candidates leave their job within the first months due to one of the above reasons. So, who can we learn from in this matter? Interestingly, one industry that handles this period incredibly well is one that we don’t hear much about in usual business – the world of academia. “Once they have internally agreed on the person they want for the job and have extended the offer, they will do everything to make sure they get their candidate of choice to actually start”, says Peter Koudijs, Associate Professor of Finance at the Stanford Graduate School of Business, teaching History of Financial Crises in the well-established, top-ranking MBA program.

“In these situations, most of the candidates have multiple offers from different schools, and the universities are very aware of that. Stanford really went out of their way in so many regards, not only for me, but for my whole family”, shares Peter. “They flew me in for another follow-up visit together with my wife and put us into one of the nicest hotels in town. The next day, they took us out for both lunch and dinner, went on a real estate tour with us, introduced me to some of my future colleagues, and finally set my wife up with a recruiter to make sure she would find an adequate job opportunity in the area as well. I got so many follow-up phone calls in the following weeks that I almost started getting annoyed”, says Peter, laughing at the memory. “I just had to start with them.”

Not every company has to be as detailed in their engagement process as Stanford, but a certain amount of upfront work is necessary to lower the risk of early turnover. This list, although certainly not comprehensive, is the minimum 5 steps that I would recommend every line manager to consider.

(1) Immediately call the candidate personally and schedule a transition meeting. Especially if HR was involved in delivering the offer and receiving the candidate’s acceptance, you want to bring the relationship on a more individual level as fast as you can. Call them, tell them how excited you are to have them join your team, and propose a meeting between now and the first day, preferably outside of the office, to start getting to know each other better, answer all questions the candidate might still have around the onboarding process, and talk about expectations.

(2) Invite the candidate to team lunches or any after-work team outings that might happen before the official start date. Meeting the colleagues and getting a first feel for the new environment will lower the candidate’s nervousness and doubt around their new role, and increase their identification with the new company culture right from the start. In the end, being close with colleagues is one of the main ingredients for a happy and healthy work relationship.

(3) Identify an “onboarding-buddy” or mentor on the team that is excited about this opportunity. Not only does this provide another set of ears to identify potential challenges in the process. But especially when personal situations interfere with a smooth onboarding, the new employee might be more inclined to open up to a peer than to their new boss. As another positive side effect, you will give another one of your employees a chance to prove themselves, acquire new people skills through mentoring and feel trusted. A two-birds-with-one-stone situation.

(4) Make sure their first day is a “win”. It doesn’t need to completely revolve around the new hire, but whatever you can do to make them feel welcome and appreciated – do it! It might sound obvious, but I have seen situations where the new employee didn’t even have a desk yet. So. Have a desk. Equip it well, and put some flowers and a welcome card on it. Schedule lunch with them. Check in at the end of the day and see how the first day went. And make sure they get a solid enough office tour to understand the fundamentals and feel good enough to start making connections with their team and other departments.

(5) Lay out a clear plan for the first week, month and quarter, and schedule regular one-on-one feedback meetings. By clearly communicating the onboarding schedule and the expectations you have towards the new employee, you will lower feelings of anxiety and bring light into the black box that a lot of new hires face when entering a new company. Even if you are demanding and ambitious, knowing exactly what the framework is will help the candidate understand how they are succeeding against company standards. Most importantly: Don’t skip the feedback meetings. At least try to. After a while, it can become tempting to just ask if there was a need to meet this week. Make sure you sit down with them, even if it’s just for 10 minutes. It’s a question of showing priorities and providing a platform for anything that wasn’t worth calling a separate meeting for.

At the end of the day, it all comes down to one important fact that you as a line manager need to be aware of. Despite the inconvenience it may have caused, recruiting and hiring is a business decision for you. For a candidate on the other side, it is a major life decision, one of the biggest drivers of change in one’s life, and a major source of anxiety for risk-averse people. Try to stay aware of this by putting yourself into your new hire’s shoes, and try to build rapport with them as soon as you can.

Because one thing we can probably all agree on: The longer the time in between now and the next time you need to replace this person, the better!


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