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It takes a lot of effort and dedication to become one of the best places to work, and there’s no magic bullet to make it happen. There are various avenues to take to get there, and the best companies make candidate experience a priority in their recruiting and retention practices. How you treat candidates matters because what they experience when they apply, interview, and onboard with your company makes an impression. If you don’t recruit with candidate experience as a priority, you can resign yourself to miss out on the best candidates. That’s because they’ll be lured away by the competition that is paying attention to communicating with candidates, making it easy for them to apply for their jobs, and offering opportunities to interact with people in their company. Take a look at what the competition is doing right now to draw off the best and brightest from the candidate pool that you all recruit from. Zappos! Zappos!  goes after the candidates long before the interview with their interactive Inside Zappos career page and candidate newsletter Zappos Insider . Their career page doesn’t list boring open position descriptions. It offers vignettes of real employees talking about their work in various departments. They highlight and demonstrate their company culture and employer brand. They expand on that with their candidate newsletter Zappos Insider where candidates can stay tuned in to what’s going on at the company and stay in touch with recruiters and employees. What does your career page look like? Do you have a candidate newsletter? Automatic Data Processing ADP has been a Candidate Experience Awards winner for several years running, in large part for its highly engaging careers page. Candidates can browse employee stories, watch videos about any aspect of ADP’s business, find out about recruiting events and how to apply if they have disabilities and need assistance, explore career areas with the company, and easily plug into ADP’s social networks which include the ADP Talent Network, Google Plus, Facebook, Twitter, LinkedIn, YouTube, Instagram, and Pinterest. Their application process is easy, fun, and interactive, and provides ways for candidates to easily find out about opportunities that interest them. Are you this plugged into the candidates that you need? W.L. Gore & Associates When job seekers land on W.L. Gore & Associate’s career page, they are invited to give feedback about their experience exploring opportunities with the company. They are then provided with tips about applying to Gore, explaining that the company likes to see tailored resumes, they phone interviews at the beginning of their recruiting process, and they interview candidates with interview teams. Candidates on the career page can browse stories about employees and how they work at the company, easily find answers to questions about the application process on the FAQs page, and find out about company culture and benefits as well as the latest news about the company. Do you help candidates understand your application and interview process on your career page? The Bozzuto Group The Bozzuto Group’s career page gives candidates a complete overview of their hiring process with interview tips, what kind of development opportunities they provide, benefits and internships, highlights of veterans and military employees, and employee testimony videos. Bozzuto is recognized as a military family employer and for being one of the best places to work in Greater Washington, and Kristen Reese, Bozzuto’s VP of Talent Management, says the company’s candidate experience is a metric for recruitment success and an area in which they seek continuous improvement to attract top talent. Is your company recognized as supportive of military families and veterans? Are you focused on continuously improving the candidate experience? Candidate experience is not just the latest buzz in recruiting. It’s a competitive advantage that companies develop to attract and retain the top talent they need to build their businesses and lead their industries. You need to pay attention to developing an outstanding candidate experience if you need the top - level candidate engagement that the competition goes after.

Recruiting today means keeping up with technology, tapping into a sea of passive candidates, building a talent network, developing a great candidate experience, promoting your company culture, and marketing your open positions. No employer or recruiter can afford to sit on the sidelines of social media and mobile technology. Old school just doesn’t cut it when you need a competitive advantage in recruiting. Everyone recruiting today needs top skills and resources to build the type of qualified, talented workforce required for business success. Emerge Talent Cloud discusses this in “ Top Recruiting Resources to Sharpen Your Skills ” and “ Best Resources for Recruiter Training in 2014 ”. Aside from continuous improvement to keep up with the latest recruiting technology and techniques, there are many sources of good information about the current state of recruiting to apply to your recruiting process. Here’s a sampling of a few of the most interesting facts about recruiting in 2014. 56% of all companies surveyed said they had a candidate reject their job. Career Builder’s Applicant Experience Study revealed that even in an unpredictable economy, candidates who have a bad experience when applying for a job will drop that employer or reject their job offer. Career Builder’s survey participants said they’d tell friends and family about their bad experience with a company’s recruiting process, discuss it in social media, and not buy the company’s products or services. How you treat candidates when they consider pursuing their career with your company can affect your reputation and your bottom line. Only 35% of applicants are actually qualified for the jobs they apply to. Th ese interesting facts come from research by CEB. With reports by the Wall Street Journal that companies like Starbucks get millions of applicants for their 65,000 openings, employers and recruiters have a huge job screening applicants before they ever get to the interviewing and hiring phase. That means that finding ways to clarify the openings and requirements so more of the right candidates are applying is very important to recruiting success and return on investment. Thousands of resumes are posted each month on Monster in each job market. Employers and recruiters have access to hundreds, even thousands of resumes for their openings. What was the response to your last job posting? How did you handle it? Screening resumes can quickly overwhelm even the most efficient recruiting staff, so the more concise your postings and more compelling your company’s career web page and social media messages, the easier it will be to fine-tune your recruiting campaigns. 18,400,000 applicants found their jobs on Facebook. One of the surprising results of Jobvite’s 7th Annual Social Recruiting Survey was how many people are finding a job through social media. More than 18 million applicants found their job on Facebook. LinkedIn is not the only place candidates are putting their professional profiles anymore. People are watching companies they’re interested in working for on social media including Facebook to find out when openings are posted, see the company culture, and interact with hiring managers and recruiters. There are five generations in the workforce today. Employers and managers are working with five generations in their employee populations today. Traditionalists, Baby Boomers, Gen Xers, Millenials, and Gen 2020 are all in the workforce today, working together, building your company, and dealing with your customers. The workforce is more diverse than ever and requires a different approach to recruiting. Young managers have older workers reporting to them. Boomers and Millenials and Traditionalists all think differently about work and what they want out of it, and employers have to pay attention to generational differences when attracting and retaining employees, offering benefits, and communicating with candidates and employees. You need to consider these facts about recruiting when you’re planning your recruiting strategy for the coming year. You can’t afford to if you want to build the qualified workforce you need for a competitive advantage. #recruitingfacts #recruitingtrends

In 2020, many of the biggest companies in the U.S. announced initiatives to promote diversity and inclusion. There are many different strategies that organizations can use to increase diversity in the workplace, one of which is implementing blind recruitment in the hiring process. The idea behind blind recruitment is that hiring teams, even if they are unaware of it, might hold unconscious biases that could impact which candidates they choose to move forward to the next round of the hiring process. By anonymizing candidates’ resumes and applications, recruiters can focus solely on the skills and experience of those who have applied for a position. So how exactly does anonymous hiring work? What are the benefits and the drawbacks of this method? Let’s take a look at everything you need to know about blind recruitment. What Is Blind Recruitment? Blind recruitment is a recruitment method you can use to remove any identification details from the applications and resumes of candidates. This process allows your hiring team to evaluate potential candidates solely based on their experience and skills. The point of blind recruitment is to avoid an outcome where other factors are taken into account that can lead to biased decisions. With blind recruitment, many common identification details are often left out to avoid unfair hiring practices. These include: Gender: By leaving out the gender of a candidate, blind recruitment ensures that hiring teams aren’t choosing a candidate based on factors such as a preference for working with people of their own gender or other matters of personal bias. Ethnic background: Ethnicity isn’t usually shared on an application or resume, but that doesn’t mean there aren’t clues that can be used to determine a candidate’s identity. Things like a LinkedIn profile picture, for example, could potentially lead hiring teams to make a biased decision. Names: Some studies have found it’s easier to get hired if you have an easy-to-pronounce, common name. For this reason, blind recruitment can remove the names of candidates. In some instances, a name might also point toward the candidate’s ethnic background or gender as well. Age: You can’t entirely avoid getting a sense of how old a candidate is because their years of experience will point towards how long their career has been. However, removing information like the year someone graduated from college or the precise years they worked for a specific corporation can avoid biased decisions based on age. Education: In some blind recruitment processes, the particular colleges and universities that an individual attended are also blacked out on their resume and application. The idea here is that avoiding knowing the specific educational details of a candidate can ensure that biased decisions aren’t being made based on the way a school’s academic reputation can lead to speculation regarding their work ethic, intelligence, or abilities. Personal interests: Sometimes, candidates will include information about their interests or hobbies on their resume to give hiring teams a better sense of who they are. However, this can interfere with the ability to make a decision purely based on skills and experience. Hiring teams might identify with candidates with similar interests or equate certain hobbies with intelligence. What Is Unconscious Bias? Unconscious bias, also known as implicit stereotyping or implicit bias, is a concept in social identity theory that has been increasingly incorporated into workplaces worldwide. The idea is that individuals can hold stereotypes in their minds that impact the way they see other people, even if they don’t consciously realize that this is the case. An individual’s learned associations and experience can influence their expectation or opinion of particular qualities and social categories. This concept was first defined in 1995 by psychologists Anthony Greenwald and Mahzarin Banaji. The desire to eliminate unconscious bias in the hiring process is one of the primary reasons organizations choose to implement blind recruitment. The notion is that, by removing any of the qualities or identifying factors that could unconsciously impact how a member of a hiring team sees an individual, they are free to make decisions exclusively based on merit. When your organization is hiring to fill an essential role, it’s easy to focus mainly on your company’s needs. However, an equally crucial part of the process is the candidate experience. You can learn more about some of the best strategies to create a positive candidate experience in this article . What Does a Blind Resume Look Like? Also referred to as anonymous resumes or redacted resumes, blind resumes can look quite different based on the standard practices of your blind recruitment process. In addition, the method through which recruiters transform resumes into blind resumes can also vary. In the most simple form of blind recruitment, recruiters might use image-editing software or pen and paper to manually redact identifying information from a resume. However, this can be time-consuming and creates the potential for a recruiter to view this information before blacking it out. For this reason, hiring teams are increasingly using software to process resumes and turn them into blind resumes. This type of software goes through each resume and presents all of the candidates’ information in the same standardized format while redacting identifying information. What Are the Pros and Cons of Blind Recruitment? One potential solution to the problem of not meeting your diversity quota in the workplace is to implement blind recruitment. However, it’s worth understanding the drawbacks and the advantages before you decide to start removing all personally identifying information from your hiring process. The Pros of Blind Recruitment One of the significant advantages of blind recruiting is that it can ensure that your hiring process is based solely upon merit and not any other factors.  While you might not expect your hiring team to incorporate unconscious bias into their candidate selection, several studies have found that blind hiring changes which candidates are hired during the application process. For example, several symphony orchestras implemented blind recruiting back in the 1970s in an effort to diversify their orchestra. When they held auditions behind a curtain so that the hiring team couldn’t see the musicians, they found that they hired between 25-45% more women than they had in the past.  While blind recruiting can lengthen the screening process in some respects, it can also help to make the hiring process more efficient in others. For example, there is usually a skill assessment or some other kind of pre-employment testing with blind recruitment. Quite a bit of time can be saved by running these assessments as many organizations rely on algorithms to analyze the results. As you might imagine, this frees up a lot of time for your hiring team to focus their attention elsewhere. However, one question that often comes up regarding this type of assessment is whether it’s legal to give aptitude tests as part of the hiring process. To learn more about the legality of different types of pre-employment testing, check out this article . The Cons of Blind Recruitment There are some disadvantages to blind recruitment that are worth understanding before implementing this hiring process at your organization.  One of the most apparent issues is that you can only hide a candidate’s personal information during the initial stages of the process. The hiring team will eventually meet the candidate either in person or through a video call, introducing personal information into the equation.  While you can end up with a more diverse pool of candidates through blind hiring, you might find that biases still play a role in the outcome once individuals have made it through to the final stages of selection.  It is also impossible to hide all identifying details about candidates completely. For example, a person with decades of experience in your field will, obviously, not be fresh out of college. Similarly, men typically tend to use more technical phrases in resumes and highlight individual skills, while women more commonly discuss working cooperatively with a team and their broader achievements in their careers. Of course, these generalizations will not apply in every instance. However, recruiters can still be impacted by their inkling regarding the personal details of a candidate based on the information that does get through the blind recruitment process.  Another concern about blind recruitment is that it can disrupt your organization in its attempt to reach its diversity goals. Since you won’t know any of the identifying details of the candidates, it’s possible you won’t get the results you were aiming for through blind recruitment.  Anonymous hiring can also extend the application screening process, which can be problematic when you are working to have the most efficient hiring process possible. Finally, another criticism of this recruiting style is that it doesn’t allow for a candidate’s personality to be communicated during the initial stages of the hiring process. In some instances, the style of a candidate’s resume and application offers essential information about whether or not they’d be a good fit for the role. Similarly, blind recruiting won’t allow you to incorporate finding a good fit for your company culture into your hiring process. For some organizations, this might be a problem, while others might think it helps to diversify their team by avoiding the temptation to hire employees that fit within the existing culture. Blind recruitment alone likely won’t be enough to meet your organization’s goals for creating an inclusive and diverse company and culture. Having a more inclusive workplace can lead to happier employees, a better reputation, and an increase in the diversity of thought in your organization. Check out these eight easy ways to create a more inclusive work culture in your organization. How Does Anonymous Hiring Work? So, how exactly does an organization transform its hiring process into one that incorporates blind recruitment? One of the simplest ways to start utilizing this strategy is to select a team member who isn’t initially involved in the hiring to go through all candidates’ applications and anonymize them. You’ll want to create a standard list of information that they will redact from every candidate to ensure that the same type of personally-identifying information is hidden regardless of the candidate. On the other hand, you can create a template that the uninvolved team member can use to transfer information about each candidate onto an identical sheet. This template can have a spot where the candidate’s skills, work experience, degree, and other essential information is included without any of their personal information. If you want to make the process of anonymous hiring as automated as possible, you can utilize many different software tools to have applications anonymized and demographic information removed from resumes. If you choose to implement blind recruitment, you will likely want to educate your staff about why you’re integrating this system and how you think it will benefit the organization. What Steps Should You Take to Implement Blind Recruitment? While you could choose to redact personal information as a part of the hiring process, blind recruitment can be a whole system that you utilize to promote diversity in your company. Some other steps you might want to take include: Writing inclusive job descriptions. Avoiding pre-screening through social media. Setting standards of which demographic and personal information you will redact. Tracking your hiring stats before and after implementing blind recruitment. Considering anonymizing the initial interviews. Every organization is different, and you might find that your company would benefit from a strict blind recruitment process or one that only leaves out the most basic aspects of personally-identifying information. Do you have any questions about blind recruitment or whether or not it would be an effective strategy in your organization? Was there anything mentioned in today’s article that you would like additional clarification on? Or perhaps do you have any questions regarding recruitment, in general? If you answered yes to any of those, please feel free to share a comment below the article, and we’ll get a conversation started! I always respond to every comment and love to have conversations about every aspect of the recruitment process. I’d be more than happy to assist you however I possibly can!

The process of hiring a new employee is harsh and resource-intensive. Many competing interests are vying for the attention of every good candidate. At the same time, your organization must identify high-quality candidates from a sea of less qualified applicants. Thus, your company must establish a process whereby you can filter applicants, identify the most promising candidates, and assess them accurately. Only then can you be assured that you’re hiring the best available candidates for any given role? Your employee selection techniques need to have several qualities:  It needs to be comprehensive. Blind spots in evaluation can lead to sub-par employees, off-target choices, undue expenses, and poor outcomes. It needs to be nuanced. Making a critical business decision based on partial or generalized information leads to poor choices. It needs to be tailored to the positions you’re looking to fill. The selection process for entry-level data entry clerks is very different from a senior-level developer or HR manager. There are many tools and resources available for use in the candidate selection process . You might, for example, hire a cloud recruiter to handle your recruitment. You might use a heavily automated applicant tracking system to do resume filtering. You might invest in varying channels for marketing your job posting. And, of course, your employees can be a resource through referrals and recommendations. Because the employee selection process is so critical to business success, we’ve compiled a list of 13 of the most valuable techniques, with an analysis of their pros and cons—choosing which of these to implement and when is vital. 1: Cognitive Ability Assessment Cognitive assessments test the candidate’s mental acuity and ability to learn. They can include anything from logic tests to pattern recognition and more. They are common after studies have shown that cognitive ability is one of the top influencing factors in job performance. “Knowing a candidate’s cognitive ability is important for jobs at every level in all kinds of industries. It can predict how well a candidate will pick up on the training materials, how they will understand instructions, how efficiently they’ll be able to solve problems throughout the workday, and how easily communication will come to them.” – Harver. The pros of this method include the correlation between assessment and performance and the ease of automatically administering and judging a well-designed test. On the other hand, cognitive assessments can have a suppressive effect on candidates who don’t feel the test is worth the role. They can also be biased and introduce adverse impacts on your hiring process. 2: Job/Role Knowledge Assessment Like cognitive assessments, a job knowledge assessment is a test designed to evaluate the candidate’s knowledge of the role. These tests need to be tailored to the position. For example, when hiring a developer, you might ask questions about the programming language, system architecture, or software your company uses. These are excellent tests to evaluate the skills and knowledge of a given candidate. However, they must be tailored to the role, which means large companies may need dozens (if not hundreds) of different tests for different positions at different levels within the organization. 3: Personality Assessments Personality assessments are tests administered to evaluate a candidate’s character and traits. These tend to be most common for entry-level roles, where skills are trainable, and experience is not required, but personality and character are more critical. Personality assessments are often too generic and don’t correctly assess traits relevant to the role. Also, similar to cognitive assessments, they can introduce adverse impacts in your hiring process . However, when used properly, they can successfully filter for high-quality candidates. 4: Learning Agility Assessments Learning agility is the ability of an individual to learn, unlearn, and relearn tasks and skills in an ever-changing digital world. It is becoming more and more critical as the development of software, technology, and tools accelerates. These tests assess how capable a candidate is of adapting to changing situations and learning the skills necessary to succeed without hand-holding. While these assessments can be very potent, they are most relevant in fast-paced industries and roles and less so in low-level positions or slow-moving organizations. They can also be highly challenging to develop and administer in a way that gets tangible results. 5: Past Performance Analysis Some say that the best predictor of future performance is past performance. Thus, analyzing a candidate through the lens of their previous experience in related or identical roles helps you determine how well they will perform in your organization’s similar role. Experience alone is not enough. Performance must be considered. Additionally, this kind of analysis works best on mid and high-level roles. Entry-level roles typically don’t require previous experience, so filtering for it can eliminate good candidates. 6: Sample Assignments In many roles, the best way to determine how well a candidate can perform in your position is by asking them to perform. A developer might be given a task to create an app or fix a bug, or a writer might be asked to write a sample piece. Perhaps a sales agent is tasked with selling to an interviewer. These allow you to see first-hand how the employee performs in the tasks you’ll be asking them to perform. Many companies use uncompensated sample work as a way to get free labor. Sample work can, however, suppress certain applicants, particularly if they distrust your company. Also, when administered too early or takes too long, candidates may choose to look elsewhere rather than jump the hurdle. 7: Structured Interviews In many organizations, the interview process is informal, a free-form assessment from a skilled interviewer, manager, or HR representative meant to get an impression of the candidate in person. Unfortunately, these are unscientific and rarely effective. Meanwhile, a structured interview uses the same set of questions, the same structure, the same format for each candidate who reaches the interview stage. This process is graded objectively using a scorecard for a more scientific and rigorous evaluation of each candidate. 8: Physical Fitness Assessments A physical fitness assessment tests how well a candidate can perform physical tasks, such as lifting weights or endurance running. They are virtually required for some roles but are largely irrelevant for most current positions within a company. As such, they are not recommended unless the fitness requirements are genuinely required to perform the job’s duties. The primary drawback to a physical assessment is that the test can be deemed discriminatory if the fitness requirements are not truly necessary. 9: Peer Interviews Peer interviews are a style of interview conducted, not by a department head or HR manager, but by the team the prospective employee would be working with. Peer interviews can give deeper insights into how well a candidate fits with company culture , how well they know their role rather than studying for an interview and assessment, and how well they mesh with the others in the office. “Potential pitfalls are that it’s necessary to train the interviewers to be sure they ask the right questions. It can also be distracting, sometimes getting in the way of daily responsibilities.” – Harver. Of critical importance is ensuring that your interviewers do not ask the wrong questions. There are many protected categories of information, both on a federal level and at various state and local levels. Asking inappropriate questions and using the answers to make a hiring decision can open your company up to legal action. 10: Reference Checks Some view the requirements for candidates to list personal and professional references as part of their application as outdated. In a vast majority of cases, the references are never contacted. However, it may be worthwhile to use references as part of your candidate screening process . The trick to talking to references is asking open-ended questions that encourage the contact to speak at length. You can use the answers to better judge the skills, character, and potential pitfalls of the candidate. The primary downside is that references are often less professional and less put-together than candidates attending interviews. They may also be biased, as with friends and family references, and may not accurately represent the candidate. And, of course, interviewing references is time-consuming, meaning it should be limited to only your most likely candidates. 11: Temp-To-Hire Contracts One way to assess whether or not a potential employee can do the job is to hire them to do the job. While this may sound counter-intuitive, temporary contracts allow you to put the candidate in the deep end immediately, with the understanding that their contract will be renewed or converted into a full hire if they perform adequately. Since the risk is somewhat lower than a full hire and subsequent termination of a poor-choice employee, temporary contracts allow more flexibility to assess a candidate over a more extended period. The primary downside is that you will still need to process some level of assessment before hiring for a temporary contract. Additionally, the contract period necessitates a lengthy evaluation period before deciding. Some smaller and more agile companies will not want to invest in these things. 12: Sample/Portfolio Evaluation Many roles, such as designers, artists, developers, writers, and other object-oriented and creative careers, find employees developing portfolios of their past work. These portfolios include samples designed or tailored to be relevant to the company, niche, or role the applicant is interviewing for. Thus, it can be representative of the quality of work done by the candidate. Reviewing their portfolio, analyzing the quality of their work with the help of someone technically proficient in the same work, and making a judgment based on past work is a great way to assess a candidate. However, this type of assessment only works for roles where the employee is likely to produce samples, though some positions can be flexible with case studies and reports on past work. Some roles, however, have no way to distill past work into a portfolio or sample. 13: Automated Filtering Modern software offers companies the option to use machine learning to scan through resumes, applications, and other relevant documentation to evaluate and filter a candidate pool automatically. This option is in its relative infancy as a technology. As such, it has many drawbacks. It can be tricked if the applicant knows what keywords to use in their documentation. It can be biased – whether inherently by the training data or implicitly by past hiring practices. It also offers little rationale or nuance in its decisions, as explaining the inner workings of an algorithm is complex. For those reasons, automated filtering is best left for “unskilled” labor positions, entry-level positions, and bulk positions where nuance isn’t as important. Properly Evaluating Candidates The complete process of evaluating candidates varies depending on the situation, role, company, niche, organization, budget, technology, and more. Every company must develop its process using the tools available to them, internally and externally, within their budget. “Properly identifying and implementing formal assessment methods to select employees is one of the more complex areas for HR professionals to learn about and understand. This is because understanding selection testing requires knowledge of statistics, measurement issues, and legal issues relevant to testing.” – SHRM Effective Practice Guidelines. There’s no one-size-fits-all approach to employee evaluation. Every screening process, from resume filtering to interviews, must be tailored to the role you’re trying to fill. The process that works for entry-level employees won’t work for directors or executives. However, at every level of an organization, the company must hire the best available candidates. Identifying those candidates is critical. There is no perfect strategy, so the typical hiring process involves multiple layers of assessment, screening, and interviews. When the cost of a poor hiring decision is high, off-target assessment is hugely detrimental. The key, then, is not just to implement a multi-layered hiring approach. It is to implement that approach, with appropriate monitoring of key performance indicators along the way, to determine which elements of a process work on a short-term and a long-term basis. Only then can a company rest assured that it has a process in place to choose the best candidates from a pool. Conclusion The journey to perfecting employee selection is ongoing and multifaceted. Organizations must navigate the intricate balance between comprehensive, nuanced, and role-specific selection techniques. The 13 methods outlined—ranging from cognitive assessments to automated filtering—each has their own advantages and drawbacks, making it clear that there is no universal solution to candidate evaluation. Ultimately, the goal is to identify and hire the best possible candidates, a task that demands precision, insight, and a willingness to evolve. As the landscape of work continues to shift, so too must the strategies for finding and securing top talent.  Ready to revolutionize your hiring process? Don’t let the best candidates slip through your fingers. Contact our team today to learn more about our tailored solutions and take the first step toward building your dream team.

Some companies treat hiring as a fickle, variable process. A position opens up, they put out a job ad for it, they hire the best candidate that comes along, and repeat the whole process when it happens again. Other companies treat hiring more like a science. Sociology dictates that there are going to be ebbs and flows in candidate interest. Seasonal trends in both hiring and job seeking can leave you wondering when the best time to hire new employees is.  So, which is better? Hiring at the start of the year, middle of the year, or at the end of the year? A Simple Answer The simplest answer is “whichever works best for your company.” If you have roles to fill at the beginning of the year, you shouldn’t wait until the end of the year to hire people; that leaves you with 10+ months of lower productivity, higher stress, and an understaffed workforce. As 37 Signal’s book Rework says, “Hire when it hurts”. Conversely, if you need to fill open roles at the end of the year, it’s easy to delay to the start of the next year, if various factors line up to make such a delay worthwhile. End of year bonuses, vacations, training, availability of candidates for interviews, and other factors are important in making these end-of-year hiring decisions. There are also considerations beyond just the start and end of the year. You can also think about the start and end of the fiscal year , or you can think about seasonal trends. There are pros and cons to hiring any time throughout the year, and different companies will view different timing in different ways. For example, a company like Spirit Halloween does not need to hire employees at the beginning of the year, as they’re only really active for a month each year. The majority of their hiring takes place in September in the lead-up to their roll-out in October, and by the end of November, their business has been put back into cold storage. There’s no clear best time to hire new employees , only the best time for your business. Instead, let’s go over the considerations each time of year brings. New Year, New Jobs (January, February) The beginning of the year is a great time to hire new candidates for long-term positions within a company. It’s also a great time to pick up candidates who are using the excuse of a New Year’s Resolution to seek out a new, better role for themselves. January tends to be slow for hiring. Companies put out job advertising, and employees decide to look for new jobs, but the two don’t meet and match until February. January also suffers from many workers still returning from holiday vacations, so the job search doesn’t begin in earnest right away. January is a good time to start figuring out what you’re looking for in a new employee. You’ll generally have the new year budgets and directives coming down the pipe, so you know what you’re working with. You’ll have a fresh allocation for salaries and benefits, you’ll have permission from above to fill roles or expand departments, and you know where you stand with your teams. The downside here is that January and February also tend to be leisurely for hiring. Companies have a lot of leeway and little time pressure to fill their roles. Candidates have applications out to dozens or hundreds of companies and can take their time receiving and comparing offers. There’s no crunch, for most companies, so hiring is not done quickly. It’s still faster than the holiday season, though. Paul Feeney, a partner with the international auto retailer AutoKineto, explains the surge in January: “The first quarter of the new year is always a busy time for recruiting because of new budgets starting. Staffers are generally taking less time off this time of year since they’re just coming out of the holiday season, which helps speed up the hiring process in quarter one, as well.” Some companies prefer to have their new employees starting in January, so they focus on hiring earlier; the previous November and December. Other companies don’t worry about the annual cycle as much, and pro-rate benefits or vacation days. Springtime’s New Growth (March, April, May) The end of a dreary winter and the start of the new growth of spring, edging through into summer, is also a time of new growth in hiring. According to a decade of data, both March and May are above average in terms of hiring rates , or at least in terms of job advertisement volume. March is the month of urgent hiring. The open roles from the start of the year that have not yet been filled now need to be filled, and there’s no more time left to spend hoping for that perfect candidate to come along. Where January sees passive candidates becoming active due to resolutions, March tends to see a surge in candidates dissatisfied with a lack of changes in their current roles. The dissatisfaction pushes them to seek out new opportunities. A high volume of candidates seeking new jobs makes this difficult for candidates, but a great time for hiring managers . The start of the spring is also when many summer-based businesses start their hiring surge as well. Tourism over summer break, summer destinations, beach, and watersport equipment; these sorts of industries see a summer surge, so they hire in preparation for it. Summer’s approach also brings a sense of urgency to late spring. Hiring managers and executives are planning their summer vacations, and they have less time and attention to spend on hiring. They want to get it over with and get people training as soon as possible. In fact, according to CareerBuilder data, 31% of summer seasonal employers finish their hiring before May, 34% during May, and 20% during June. Anyone looking for a summer job needs to be looking long before summer because hiring for those roles needs to be done early enough to train the employee in time for the summer position. The Summer Slump (June, July, August) Summer is one of the worst times to hire unless you’re specifically operating a business with an autumn surge. Many companies require additional employees over winter and the holidays, but that hiring surge doesn’t happen until fall. By the time summer rolls around, many companies have spent the majority of their HR and hiring budgets, so the flexibility and leeway to hire more have been slashed. Additionally, companies are looking at expenditures and trends and may start to look for cost-cutting measures to balance out their mid-year budgets. Hiring takes a back seat. (ZipJobs 2017 Hiring Trends Study) Many firms, this time of year, are starting to look at employee performance data and are preparing for seasonal trends. It’s a time of studying analytics, monitoring data, and waiting. Some hiring might be relevant for suddenly vacated roles and for new hires that didn’t make it through their probationary period, but in general, the volume is low. On the other hand, this can present an opportunity. Companies that have the flexibility and budget to hire during the summer can pick up candidates with relatively little competition, compared to the higher volume months. The top candidates may not be available, having already found their new roles from earlier hiring surges, but plenty of quality candidates are still on the market. There’s also a lot of overlap in August. It can just as easily be considered part of the Autumn trends and go in the next section as well. August hiring, particularly the end of August, leads up to winter jobs and end-of-the-year starts. Harvesting New Jobs (September, October) Autumn is traditionally another surge in hiring. It’s the time when nearly every company is ramping up for the holidays, including the much-vaunted Black Friday and Christmas sales times. While September is still coming out of the doldrums of summer, October is a surge with above-average job listings according to the same job data from above. Depending on who you talk to, it can take anywhere from four months to two years for a new employee to adjust to their new role and become “fully productive”. If you’re aiming for the shorter end of that scale, hiring in September or October gives you a functioning and adjusted employee at the start of the following year. Some studies also suggest that October may be the best month to hire new employees. At the very least, it’s among the busiest months for new jobs posted to LinkedIn. Nearly 90% of those jobs are filled within a month, as well. End of Year Hiring (November, December) The end of the year is by far the most contentious time to hire new employees. Some people consider it to be the worst time of year. The holiday season means the HR teams, executives, and managers who need to collaborate to hire a new employee are never going to be in the office at the same time. Likewise, holiday demands make it difficult for candidates to make time for interviews, and often the best candidates put their job search on the back burner for the holiday months. On the other hand, the accepted flexibility of vacation days during the holiday season gives candidates more flexibility. Some people argue that candidates who would suffer in their current jobs if they were caught interviewing for other jobs can use the holidays as an excuse to slip out without suspicion. Budget concerns draw a dividing line between types of companies as well. In companies where budgets roll over to the new year, the leftover budget can be saved for a hiring spree in the new year. In “use it or lose it” companies, an end-of-year hiring surge can make use of what remains of a budget to ensure it’s not cut the following year. The end of the year is also a time when many companies choose to promote internal employees rather than look for new employees to bring in. Internal employees benefit from the new position prior to holiday spending, and it’s easier to recruit for a lower-tier position when the new year surge comes. As Career Sidekick says: “Many companies also pay annual bonuses in December, so a lot of people wait until January to change jobs. Companies expect this, so they look to make new hires in January.” Current Events and Other Factors The global pandemic has created a new landscape for hiring. At first, the pandemic made the hiring market a lot slower. Many companies were cutting back on all spending, making it difficult for candidates to find a job. Nowadays, the hiring market is back to normal.  Some traditional surges, like the back-to-school end-of-summer surge, are in flux, as the state of education is unknown. Unemployment remains high, giving companies their choice of candidates, but remote work is virtually required for many candidates to even apply. It’s always worth mentioning, as well, that just because a month isn’t “the best” time to hire doesn’t mean you shouldn’t hire. There are no months where hiring is cursed. If you have a role open up and you need to hire someone for it, hire someone. In fact, it might even be rewarding to work against the grain and hire during slow months. The cost of hiring is determined, in part, by the competition on sites used to list job advertisements. Anywhere an ad auction is involved, the amount of competition is going to be a strong factor in how expensive it is. Another factor to consider is cultural norms. Much of what is written above is relevant primarily from a United States perspective. Companies with an international or global presence, including offices in other countries, will have different schedules, different routines, and different norms to consider. Christmas isn’t as big a deal elsewhere, for example, and the end-of-year hiring surge is less disrupted by expected vacations and travel. Conclusion  The optimal time to hire new employees depends on your company’s specific needs. Seasonal trends and market dynamics can guide timing, but ultimately, hiring should align with your organization’s growth and productivity goals. Flexibility and adaptiveness are crucial, especially in response to changing global conditions like the pandemic.  The right hiring decision balances external opportunities with internal requirements, ensuring the best fit for your company’s future.  In the end, it all comes down to what works best for your company. Hire when you need to hire and when you find a compelling candidate to fill a role. Ready to optimize your hiring strategy? Stay ahead of the curve by understanding the best times to recruit new talent. Contact our team today to start transforming your hiring process today!

In business and, specifically, in HR, specific terms often have very similar meanings in everyday language but very specific, different definitions within the HR sphere. Two such terms are Employee Attrition and Employee Turnover. Both turnover and attrition have to do with employees leaving the organization. However, both metrics have specific definitions that measure different aspects of the overall health of a business. Why the Confusion? The truth is, that turnover and attrition are tricky to define because so many different organizations fail to stick to conventional definitions. LinkedIn has people posting industry standard definitions , but their Insights reports describe attrition using the definition of turnover. Companies like SpriggHR define attrition with a slightly more expansive definition that includes involuntary departures. What’s important is that you know what the metrics mean within your company and what they mean with any company you’re comparing yourself to. Any benchmarking requires you to compare apples to apples, after all. What, then, are the industry standard definitions? What is Employee Turnover? To start, let’s talk about employee turnover. Many people believe that turnover is simply a measurement of the number of employees who leave an organization in a given year. However, this isn’t strictly true. Employee turnover can be defined as “the rate at which employees leave and are replaced.” It’s also defined as a percentage of your total workforce. Turnover can include employees leaving voluntarily or involuntarily. Turnover is a percentage of your company’s average headcount during the time you’re measuring. Turnover isn’t necessarily bad but can be a measure of overall company performance when benchmarked against other industry players. To calculate your turnover rate, you need to know the number of employees who leave whose roles you intend to fill. Whether or not you’ve filled them doesn’t strictly matter, but if you “intend” to fill a role but leave it unfilled for over a year, well, you don’t intend to fill it, do you? The equation for the turnover rate is this: Turnover Rate = (# of Departures / Average Headcount) * 100 Let’s say your company is a mid-sized business with an average of 170 employees over the last year. During that time, 22 employees left. Some were fired, others left of their own accord, but they all filled essential roles that you want to be filled, so they’re all valid for replacement. Turnover Rate = (22 / 170) * 100 Turnover Rate = (0.1294…) * 100 Turnover Rate = 12.9% It’s important to note that turnover rates vary extremely widely. Retail employees have an extremely high turnover rate, at around 60%. Conversely, industries like the Energy or Chemicals sectors have approximately 12%. You can see a comparison and a more detailed breakdown from SHRM here . What is Employee Attrition? Employee attrition is the number of employees who voluntarily leave the organization and who you choose not to replace. For example, say your organization has four middle managers. One of them decides to leave to take an upper management role at a different company. Upon evaluation, you determine that you don’t need that fourth manager role, and a simple restructuring will divide their reports amongst your remaining three managers. This loss of a role is attrition. Attrition requires that the employee leave voluntarily; terminating or otherwise letting an employee go does not constitute attrition. Attrition requires that you do not fill the role. It is, essentially, a shrinkage in your workforce. Attrition brings with it particular challenges, such as declining interest in your products or an impending knowledge-transfer crisis. There’s an interesting line to draw here. Since attrition requires you to have no intention of filling the role, it can be very similar to a case where you’re eliminating a role. However, eliminating a role and terminating the employee in that role wouldn’t fall under attrition because the employee departing is not leaving of their own volition. That quirk catches many people, even HR professionals, off-guard. Is Turnover Good or Bad? Many people have an inherent view that turnover is bad. The truth is, that employee turnover isn’t always bad, and to understand it, you need to understand the context surrounding it. Take, for example, a customer service position. Such a position is likely to have an extremely high turnover rate. Very few people want to work as a cashier for Burger King or as a Walmart greeter for an entire career. These positions are expected to be a) always filled, and b) have strong demand, as entry-level employment (or as employment of last resort for those who need income, no matter how they find it). An industry, or a department within a company, can have very high turnover rates and not be at risk in any way. Consider a company like Trader Joe’s. Trader Joe’s has a company culture of promoting internally, boasting that 78% of their managers started as entry-level workers and 100% of store managers were promoted from department managers. Their entry-level roles may have high turnover, but they aren’t losing institutional knowledge; many of those employees are still employed by the company and are building loyalty through career progression. Turnover can also be planned. Significant seasonal shifts in hiring in retail, for example, are planned turnover. The roles will be filled (even if it takes until the beginning of the next season to fill them), so it’s not a bad thing to have a high level of turnover; it’s expected as a way to handle seasonal shifts in demand. “A host of factors influence turnover. Voluntary turnover happens when employees unexpectedly find a better opportunity elsewhere. That may mean fewer hours, greater pay, better work-life balance, or even closer proximity to their house. It’s up to you to start sorting through the data to see how to reduce it.” – David Cusick, via Lattice . Turnover is only bad if and when it is unplanned and when the job market is poor. If large numbers of employees leave for reasons like unequal industry pay or poor working conditions, that form of turnover is bad. If large numbers of employees leave and you can’t find people willing to work for you despite wanting to fill their roles, that isn’t good either. The key to adequately learning about turnover, and using it to your benefit, is understanding the context. You can ask yourself questions about it, such as: Which departments have high turnover rates? What pressures result in higher turnover, such as compensation? Are there individuals potentially responsible for excessive turnover, like a problematic manager? How does the turnover rate for this department and industry compare to similar rates for other companies? Some amount of turnover is inevitable. After all, no company in the world has a 100% retention rate. The key is to make sure your turnover rate isn’t inordinately high, and if it is, figure out what the problem is and how to solve it. “Turnover metrics are valuable from a legal perspective because they can uncover unconscious bias , discriminatory practices, or reveal a workplace climate that deters women or persons of color from remaining at the company,” said Robert C. Bird, a professor at the Academy of Legal Studies in Business , via Lattice Is Attrition Good or Bad? Attrition is defined as employees who voluntarily leave and whose positions you choose not to fill. It’s already better than other employee churn metrics because it’s voluntary on both sides: the employee isn’t being terminated, and you’re choosing not to fill the role. However, the pressures that inform those choices can determine whether attrition is good or bad. Attrition typically can provide an opportunity. For example, when interest in your product or your company is on the decline, attrition can be an amicable way to reduce overall labor costs and workforce size without resorting to downsizing. You benefit from lower operating costs without making it feel like your business is collapsing under external pressures. The decision of an employee to depart is typically more amicable, though it doesn’t have to be. An employee choosing to quit, because your pay rates are sub-standard, is still, technically, an amicable departure; however, the realization that better things are possible can drive many other employees to leave for similar reasons. Attrition is also a sign that you need to ensure that your company has a central knowledge base and that knowledge and skills can transfer to new employees without losing institutional knowledge. One of the worst risks of attrition is departing employees bringing essential business information or skills with them, leaving the company worse off without them. Attrition isn’t indefinite, either. Understanding when you want to fill a role and when to eliminate it in the future is an important decision to make. Choosing not to fill an open role in the short term can be beneficial, but you may still want to have someone in that role a year or two from now. “The question isn’t whether employee attrition happens when employees leave—it’s really how long the period of attrition should last. An immediate rehiring effort turns a departure into a turnover event, with costs and anticipated benefits of its own. An indefinite period of attrition saves money in the short run but has long-term impacts due to the reduction in staff.” – Bamboo HR . Using Turnover and Attrition to Scale Business Businesses need to be balanced. If you don’t have enough employees to meet demand, your business will suffer. Customers may go unfulfilled, orders can take ages to ship, and customer service falters; critical understaffing can be a death knell for a company with an otherwise significant amount of demand and potential. Conversely, if your business has more employees than are necessary, you run into the opposite problem. Expenses for maintaining your workforce skyrocket compared to income and profits. Employees may find themselves sitting on their hands with nothing to do. You end up with a “too many cooks in the kitchen” situation and can even inhibit the productivity of your teams by trying to influence too many voices on too few decisions. Additionally, departments within a business must be in balance. If you have too few customer service employees and too many sales employees, customers may find promises being broken and service sub-par. Too much marketing can build too much demand that the rest of your workforce isn’t prepared to handle. The key is to recognize that turnover and attrition are not inherently bad. Attrition can be a helpful tool to adjust the scope of a business downward without inhibiting business growth. Indeed, limited availability can even increase demand, and a waitlist can be a potent marketing tool. Monitoring these metrics is also crucial for predicting future performance and watching for potential problems. For example, if your business is expecting a 15% or lower turnover rate for Q4, but afterward, you find that your turnover rate hit 22%, you can start to look into what happened and why. You had an expectation, which was off-base. Was it poor predictions, or was there another factor that influenced turnover and increased it? Moreover, is that something you can fix for the benefit of your business? One key is communication. You can’t tell whether turnover or attrition is good or bad without understanding why an employee is leaving. If you’re terminating them, you know the immediate reason why. However, you may want to dig deeper to determine if external or internal pressures led to the problems you terminated them for. Ideally, of course, you will know this before you reach the point of termination, but that isn’t always possible. The crux of the issue is that both turnover and attrition are similar metrics and serve similar purposes but are distinct and valuable in unique ways. Using them appropriately begins with measuring them correctly, and to do that, you need to know precisely what they are. Do you or your business have any questions about the differences between employee turnover and attrition, or about either one separately? If so, please feel free to leave a comment down below, and we’ll get a conversation started! As we mentioned earlier, it is pretty easy to mix up the two, so we would be more than happy to clear up any confusion you may be having.

Sooner or later, every manager has to contend with an employee who fails to meet expectations. Perhaps their performance has dropped, they have been assigned new tasks and are unable to handle them, or they handle their tasks, but their behavior is disruptive to others. Many companies turn to a warning system, followed by termination in these cases. However, this response lacks nuance and does little besides imposing the threat of penalty to resolve the situation. Is there another way? Indeed, an alternative exists; the Performance Improvement Plan. What Is a Performance Improvement Plan? A performance improvement plan, or PIP, is a framework and strategy designed to guide an employee with performance or behavioral issues toward resolving those issues. It is: A formal document, not an informal agreement or discussion. A set of goals and deadlines, with specific timelines for improvement. A framework for resolution of the issues, on both success or failure. PIPs are used to help struggling employees realign themselves, learn what skills or techniques they may be missing, and restore their good standing position with the company. Upon the successful resolution of a performance improvement plan, the employee is absolved of risk; conversely, if they fail to produce results, the plan offers a resolution to the problem in other ways. Some may view a performance improvement plan as the first step to firing an employee with cause, by putting them “on notice” such that any failures can then be recorded and used against them. While some companies use them in this manner, a real PIP has significant benefits beyond “an excuse to terminate an employee.” Moreover, since most of the country uses at-will employment, such excuses are not typically necessary. A performance improvement plan should instead be viewed as a good thing . It’s an opportunity for growth, training, and alignment of skills and behavior, not a looming threat of termination. It’s a sign that the company views the employees as valuable enough to invest in and keep them around. An employee who has proven they can handle some tasks, but not others, may be demoted but kept on staff, where they can be effective but not disruptive. Others whose talents push them in one direction may find that they are transferred to a department more in line with their abilities upon resolution of their PIP. The best performance improvement plans, in fact, often have potential outcomes other than “return to the norm” and “termination.” Creating and implementing a good performance improvement plan is a six-step process. Step 1: Determine If a PIP is Warranted As mentioned above, a performance improvement plan is meant to be a tangible framework for improvement and realignment with business objectives. It is not meant to be little more than a paper trail for impending termination. Thus, HR needs to determine whether or not a PIP is warranted. Questions to ask can include: Is the employee’s behavior or productivity in question? Some issues may not have a root cause in behavioral or productivity adjustments and thus cannot be addressed with a PIP. Is the issue new, or has it been mentioned in past performance evaluations? The longer it has been going on, the more likely it is that past attempts have been made and failed. However, it’s also possible that the employee did not know they had a problem until now. Is the employee’s manager dedicated to helping the employee improve and succeed? A manager at the end of their rope, frustrated with an employee who doesn’t listen to feedback, may not be capable of managing a PIP properly. Can a framework with tangible goals help improve the situation? Sometimes a problem is outside the control of the employee, manager, or business. Other times, it relates to behavior that cannot be fixed with a PIP. Has a factor been overlooked that can explain the problem? For example, if an employee took time off for illness and missed critical training, the issue can be solved by recognizing and providing the missing training instead of a PIP or as part of a PIP. Is there a valid and warranted excuse for this behavior? For example, personal, family, or health issues can cause problems in the workplace. Accommodation or understanding may be more valid than a PIP in these cases. This analysis aims to determine whether or not the issue can likely be solved with a performance improvement plan or if it would simply waste time, and termination is a better option. Additionally, a PIP should never be a surprise. It is a formalized “last resort” for the employee. Before reaching this point, their manager should attempt to work with them in varying degrees of formality to identify, address, and solve their problems. Step 2: Decide on Potential PIP Outcomes Typically, the best outcome of a performance improvement plan is a return to form. The employee should, through the framework, be able to adjust their behavior such that they can accomplish tasks, avoid unnecessary conflict or abrasive behavior, or otherwise adapt to the requirements of their job. However, this is not the only possible outcome of a PIP, nor is it the only “good” outcome. The “failure” outcome of a PIP is, obviously, termination. If an employee proves that they are not capable of adjusting their behavior to suit the goals and needs of the business, then terminating their employment is the best option for the business. There is also the option for the employee to dispute or refuse the PIP. In some cases, this can bring to light a failure of management, another team member stealing credit for the employee’s work, or another systemic issue. Otherwise, it can be a sign of refusal to improve or adapt and result in termination. That said, two other potential outcomes can be viable for both the business and the employee. The first option is a demotion. The employee may have been hired for a role they were not genuinely fit to handle, or they were promoted beyond their means. In many cases, such an employee struggles to find their place and may benefit mentally and in career terms by reducing their role and responsibility. This realignment of responsibility with skill level may be disheartening for the employee, but it’s still better than firing them. The second option is a transfer to another department. For example, perhaps an employee is put on a PIP for consistently being unable to meet sales goals in their role as a sales representative. However, throughout their employment, they have discovered a passion for data analysis and the back-end office worker that facilitates the success of the sales staff. The PIP can identify these skills and lead to transferring the employee to a role where they are a better fit for the company. The key is not necessarily to set a goal for the PIP; it’s to provide and watch for the possible outcomes. The employee should also know that the PIP is not a binary “improve or be terminated” program, which gives them more opportunity and flexibility to succeed. Step 3: Build the PIP Framework Next, it is time to draft the PIP agreement. A PIP should: Be SMART: That is, Specific, Measurable, Achievable, Relevant, and Time-Bound . In other words, the goals must be tangible, the deadlines for achievement set down, and everything must be measurable and achievable. Include a space for a specific description of the issue , including documented instances of failure to meet expectations, which expectations need to be met, and how. For now, this can be blank or a template, as we’re only developing the framework for a PIP in general. Include guidance on how to adjust behavior to improve , and offer resources and opportunities for training and other information necessary to make that improvement. Set a schedule for check-ins with the manager overseeing the PIP , to keep on track of progress (or lack thereof). Depending on the situation, this manager may need to be someone outside of the department to avoid conflicts of interest. A listing of the PIP outcomes , including the requirements for achieving them, as necessary. You can see examples of what PIPs look like here. As you can see, a PIP doesn’t need to be an exceptionally long or complex document. In fact, the more complex the scenario, the less likely a PIP is to be applicable to the solution. Step 4: Fill Out and Review the PIP to Remove Bias Armed with a template PIP, you can now fill it out and make it relevant to the individual employee with issues. Fill out the area that needs improvement, the goals for improvement, the timeline, any resources you can provide to assist, and the deadline with possible outcomes. Before approaching the employee about the PIP, the document should be reviewed to remove any potential bias against the employee. This “sanity check” helps avoid problems such as: A manager with a grudge sets unsustainable or unachievable goals. A PIP aims to “solve” issues that cannot be solved through training, like emotional, health, or other problems. A PIP that demands success when no support was given to reach it. A common example is an issue where improper onboarding led to an employee not knowing what they should be doing. A PIP is not the ideal solution to this situation. Additionally, it may be helpful to review the overall workplace and see who has received PIPs in the past, looking for trends that could be construed as discriminatory. While this should not be the case, there’s always the risk of individuals in power with biases causing issues. Step 5: Implement and Monitor the PIP The meeting wherein an employee is presented with a performance improvement plan is never fun, but it’s a necessary first step. It should be stressed that a PIP is positive; it means the company wants to give the employee an avenue to improve and a chance to do so, rather than terminate them. The employee should also be made aware of the tangible goals, desires, and steps included in the PIP and given a copy of the document themselves. This time is also an opportunity to discuss the situation in candid terms. In some cases, this may be where an employee can present their case and the evidence that exonerates them. Depending on further analysis, this may be the opportunity for the PIP to be withdrawn pending further investigation or adjusted to consider new factors. As the PIP is implemented, perform regular check-ins to ensure the employee is progressing and that any questions are answered and any resources are provided. A performance improvement plan is, after all, designed to facilitate success, not enforce consequences for failure. Step 6: Review and Conclude the PIP with Relevant Action As the PIP progresses and nears its conclusion, decisions must be made. If the employee has improved, the PIP can be closed with no further issues on their file. If the employee shows improvement, but not to the point required, some leeway may be granted, alternative avenues for improvement can be offered, or the employee’s position may be adjusted. And, of course, if the employee fails to improve or regresses, proper action can be taken, and termination proceedings can begin. Bear in mind that adjustments to the PIP can be made at any point in the proceedings. You may discover, for example, that the outcomes you’re measuring are not actually within the employee’s control and that punishing them for failing to meet them is unnecessarily harsh. The PIP can be closed as a success even in such instances if the employee demonstrates improvement in other areas or if such improvement is not necessary. Upon closing the PIP, proper action must be taken. If the framework indicates that the only valid response is termination, and the employee has shown no other argument for an alternative, then proceed. After all, a performance improvement plan is predicated on that middle word: Improvement. Do you have any questions about the performance improvement plan or if your company should implement it for an employee? If so, please feel free to leave a comment down below, and we’ll get a conversation started. As mentioned, a performance plan may not be helpful in every situation, and it’s important to understand how and when to use it. We would be more than happy to assist you in understanding it better however we possibly can!

For the last several years, the winds of change have been blowing through the job market. Moreover, the pandemic has put significant pressure on the labor market, pushing it away from one dominated by companies.  The balance of power has shifted in favor of the candidates, who are now in comparatively short supply and high demand. They have the luxury to pick and choose between their roles, finding the company that best suits them to work for.  Companies, meanwhile, need to struggle and compete with one another to hook the candidates they need to keep going. This change has led to a rise in one of the most annoying, expensive, and time-consuming situations for a company to be put into. You put out a job ad and start pulling in applications. You filter through the applications and identify your top candidates. You conduct interviews and choose the best candidate from among your pool. You send this candidate a job offer and begin the process of hiring. The candidate accepts the job offer. Then, a few days or a week later – before they onboard – they decide to rescind their acceptance and take a different job with another company. You’re left without your candidate and need to move on. How does this happen? The Candidate’s Perspective   In the current job market , candidates – especially the top ones, who may be passive candidates already comfortably employed, or candidates supported by savings or a spouse who have the luxury to look – often interview with multiple companies at once. They put out numerous applications and do interviews with whoever gives them the time of day. Since candidates are in short supply, this is likely to be most of them. They then have the option to compare the companies they engage with. They can compare compensation offers, benefits packages, workplace culture , how well they got along with the interviewer, and more. They have their pick of job offers. The candidate has no concern for the expense you racked up in the process of reviewing, interviewing, and preparing to hire them. And, honestly, it shouldn’t be their concern. It’s part of the cost of doing business. This difference in perspective is what makes the whole situation such a contentious issue and why the hiring manager and the candidate have such differing opinions. The hiring manager knows that the company has invested significant time and money into this candidate already. So the hiring manager is left in a challenging position and asks the question, “What should I do after a candidate backs out of a job offer”. Especially if the person they wanted to hire backs out when hiring needed to be done by a deadline. The candidate doesn’t know or care about any of that. They want what’s best for themselves, and if another company gives them a bigger, better offer, why would they turn it down? They don’t even have to worry about burning bridges with you because the chances of them having to come back to you are relatively slim. Many hiring managers like to convince themselves that candidates view this situation as unethical and exploitative but do it anyway out of greed. The truth is, candidates only want what’s best for themselves and their families. Companies are machines worth no affection or remorse, and indeed, that’s what companies have built up for themselves over the past decades. We’re reaping what we sow. None of this changes the situation. All you need to do is know how to deal with it. Two Different Situations Generally, there are two different situations where the candidate decides to rescind their acceptance of a job offer. If you’re not looking closely, you might not notice the difference. In one, the candidate tells you that they’ve received a better offer and are choosing it over yours. After that, they ghost you, and that’s that. In the other situation, the candidate tells you they received a better offer and then tells you what it is. This is important because, in this situation, the candidate is interested in working for you but received a more compelling offer from a less compelling company. They’re giving you the opportunity to counter-offer, improve your offer, and rope them in. It’s essential to recognize which situation you’re dealing with and whether or not you want to hire that candidate after they pull such a stunt. These candidates are just as likely to keep their feelers out and be willing to either jump ship later or use the threat of a better offer to fish for a raise. If they’re talented and beneficial to keep on hand, it can still be worth keeping them, but it can be expensive and stressful. If the candidate got a better offer and is informing you they’re not going to work with you after all, there’s not much you can do about it. A counter-offer probably won’t keep them around. Legality, Ethics, and Morals Is it morally correct to take the better offer and leave the company floundering? Is it ethical? Is it even legal? These are questions the candidate might be asking themselves, and they’re questions you need to understand to know what your options may be. First, let’s talk about legality. In purely legal terms, most of us live in “at-will” employment states. “At-will” employment is a form of employment that can favor the company and the labor market at different times. The company can use the threat of termination as leverage in virtually every situation, using that power to keep employees in place despite less favorable conditions. Since jumping ship is difficult in a competitive labor market, the employee has little choice. Unfortunately for companies, since the tides have turned, that same framework is used against you. Just as you could terminate an employee at any time, so too could the employee, and now you have no leverage to keep them around. Legally, nothing is stopping them from rescinding their acceptance of an offer, no matter how far along in the hiring process it is, even into onboarding. In fact, probationary periods often give further leverage to the employee in this situation; they’re always at risk of being let go in the first six months anyway, so choosing to leave during onboarding for a better offer is no skin off their back. There’s one single exception to this: contracts. IF, and only if, you have produced a legally-enforceable contract that says the candidate will not accept a different offer and will work for a specific contract period (usually at least six months, sometimes a year), then there’s more of a leg to stand on. And no, an offer letter is not a legally binding contract. It can accompany a contract, but it is generally just a statement with a signature to acknowledge the terms of employment, with further paperwork to come down the line. IF there was an actual contract, and IF you choose to pursue it, you could sue the candidate for breach of contract. If you do so, there are three possible outcomes. The candidate wins, your contract is labeled void, and you gain nothing while losing the time and money spent on the suit. The candidate loses, but you only gain damages, forcing the candidate to repay some portion of the expense they accrued in the loss of the hire and possibly legal expenses. But, you also take a dramatic hit to your reputation; who wants to apply to a company that sues candidates? The candidate loses and is told they must honor the contract and work for you. And, work for you, they will, with as much resentment, anger, and implicit sabotage as they possibly can. Chances are, they’ll do more harm than good. So, even if the law was on your side – which it isn’t – there are no positive outcomes from pursuing it. The Morals and Ethics of Declining an Accepted Offer Is it moral or ethical for the candidate to rescind their acceptance of a job offer? The truth is, it doesn’t matter. That’s because perspectives differ, and there’s no such thing as an objective morality when it comes to negotiations in a situation like this. If anything, since the candidate is the one who risks their shelter, security, and health, their self-interest is of much greater concern than the interests of a company, which risks none of those things. Regardless, morality and ethics don’t play a serious part in this situation unless you’re planning to try to emotionally blackmail a candidate into dropping a better offer to work for you. And, again, there are no positive outcomes from such a ploy since the employee you’ll end up with will be regretful and resentful at best. What Should You Do Next? With legal action off the table, as the hiring manager responsible for filling an open role , you have to figure out what to do next. The first step is, as mentioned above, to verify whether or not the candidate is trying to push for a counter-offer. If they are, and you can offer it, you can still hook the candidate. This isn’t always going to be the case, but when it is, it can be a favorable outcome for both you and the candidate. However, if the candidate is well and truly gone, you’re left in a lurch. Luckily, you have options available to you. Remember that candidate pool you built up? It’s time to turn to your second choice. Incidentally, this is why it’s a bad idea to send rejections to your other candidates before your role is filled. Even the offer letter being signed isn’t always enough. Wait until the candidate is truly onboarded before informing other candidates that the position has been filled. If the initial candidate doesn’t work out, you can reach out to one you previously rejected and send them an offer. Many candidates who were passed over for a position will still be at least somewhat interested. Some might reject you, either because they found another job in the meantime or because they don’t want to always feel like the “second choice” (even if they are). While you’re at it, you might consider looking over your hiring process and your company to see if there are changes you can make to encourage candidates to not jump ship, despite a signed offer letter. Make your company culture more enticing , as a benefit that can outweigh a slightly higher salary at a worse company. Examine your pay and benefits package and ensure that it’s more competitive, so this kind of poaching is less frequent. Tweak your hiring process to be more emotionally and cognitively engaging, so your candidates have a more personalized experience, building a connection that is harder to drop. You can also talk to the candidate who left and ask what factors played into their decision. Often, they had received a much better offer from another company, and if you can’t increase your offers to be competitive, there’s nothing you can do. In some cases, the candidate ghosts because their circumstances change, such as a health or family situation that gets in the way. You may still be able to “hold” a position for them or keep them on the top of the list if they come knocking again. This outcome is rare, however. In other cases, the candidate might be able to talk about specific issues they had, red flags raised, or problems they encountered. For example, a minority candidate might have been introduced to an interview panel of all white men and gotten a bad impression of your leadership or company diversity . They may have encountered an interviewer or future coworker in a casual setting and had a bad social experience. Or, maybe, your hiring process was uncommunicative or delayed and inconsistent, and they didn’t want to work for a company that disorganized. In these cases, you can often take steps to minimize the issues and remove the barriers for future hires. You’re unlikely to recapture the lost candidate, but you can allow them to pave the way for other candidates after them. Ghosting is an unfortunate fact of doing business; how you handle it helps determine if you’re a great place to work. Conclusion In the rapidly evolving job market where candidates now wield more power, companies must adapt to the reality of candidates rescinding job offers. When faced with such a situation, it’s crucial to act with pragmatism rather than emotion. While the impulse may be to pursue legal action or counter-offers, these are often not viable or constructive paths. Instead, companies should focus on strengthening their hiring processes and company culture to be more enticing and competitive. Turning back to the candidate pool and engaging with your second-choice candidates is a strategic move. This approach, coupled with introspection about the company’s offerings and recruitment tactics, can mitigate the fallout from a candidate’s withdrawal. Learning from instances where offers are declined and taking proactive measures to improve can prevent future occurrences. Don’t let a withdrawn job offer set you back. Take this opportunity to revitalize your hiring strategy and strengthen your team. Reach out to us today and pave the way for a more resilient and attractive workplace.  Act now—because the right candidates won’t wait, and neither should you. Page updated on November 6, 2023.

An employee leaving is rarely a cause for celebration. The days of 50-year careers and retirement celebrations are over, and these events are a rarity. Today, when employees leave, they’re likely doing so because they have another, better job lined up. This kind of turnover can be both annoying and costly. Not only are you losing an employee, but you may also already be short-staffed, you may be in the middle of a high-volume time of year, or you may be a star employee. Their loss will be felt, not just in their team or your overall productivity, but your bottom line as well. When all of this is weighing down on your mind, it can be easy to forget some of the common courtesies necessary to let an employee leave with grace and goodwill. One such courtesy is responding to a letter of resignation. Whether you’ve forgotten to do so or aren’t sure how to respond appropriately, let’s discuss the issue. Determine the Context An employee leaving with a letter of resignation is generally one of the better outcomes, believe it or not. When the alternative is an on-the-spot “I quit!” leaving you in a tight spot, having advance notice of a resignation letter is a great position to be in. However, you still likely want to analyze the situation to determine the next steps. First, look into the reason why the employee is choosing to leave. Generally, these reasons can be divided into two groups: those you can refute and those you can’t. For example, if an employee has a family emergency and will not be able to continue working indefinitely – such as becoming a caregiver for a parent or spouse – there’s not much you can necessarily do to keep them around. On the other hand, situations such as: The employee is pursuing other opportunities to advance their career. The employee is moving across the country for a spouse’s job. The employee is no longer satisfied with your benefits package. These can be refuted. In particular, you can consider offering additional perks and benefits to keep the employee on board. Addressing the three complaints above, you can: Offer a defined track for a promotion, raise, or increase in title and duties. Offer the option to work remotely. Offer an increase in benefits. For an excellent employee, taking action to keep them around may be enough to convince them to change their mind. Often, employees don’t necessarily want to leave; they want stability and a long-term career. Unfortunately, stagnation in the workforce often means career paths don’t exist the way they used to. Sometimes, the only way an individual can advance is to take a new position with a different company. Sometimes, the employee is leaving for a reason that can be addressed, but that is unlikely to be. For example, if they have an ongoing feud with a manager, terminating that manager could keep them around. Similarly, a workplace culture they find toxic can be adjusted. However, these are major shifts, and many employers are unlikely to make those shifts for a single employee. Establish a Timeline The traditional timeline for an employee leaving is a two-week’ notice. This time frame gives the employer some time to begin transitioning duties to other employees, begin seeking a replacement, and take other relevant actions such as handling all of the paperwork, paying out remaining benefits, and handling a transfer of insurance coverage. Sometimes, the employee may give more or less notice. Two weeks is standard, but it is not required in any jurisdiction. “There are no federal or state laws that require an employee to provide two weeks’ notice to his or her employer before quitting. […] all states except Montana have adopted the at-will rule, which is a common-law doctrine that defines most employment relationships. Excluding exceptions, the at-will doctrine gives an employer the right to terminate an employee at any time, without cause or any reason. Likewise, employees are also allowed to leave their employment at any time and without reason. Thus, neither the employer nor the employee is required to give the other any notice that the employment relationship will end.” – Employment Law Handbook . The two weeks’ notice may be written into the employment contract. In this case, if the employee leaves with less notice, you could potentially pursue them for a breach of contract. In practice, this is virtually never worth the effort and expense. In some cases, the employee may give a longer notice, stating their intention to leave at a given date in the future. This additional notice is beneficial to you, as it gives you more time to handle the transfer. It’s not typical, and you should not expect it, however. Your first goal should be establishing a timeline based on how much notice you have. It’s essential to recognize that this is unlikely to be “business as usual” for the employee up until their last day. Instead, this time should be used to transfer institutional knowledge, add to a knowledge base, transfer accounts, and duties, train a replacement, and handle whatever other tasks need handling to ensure a smooth transfer. Ideally, of course, you should have enough employees on hand that you can promote someone else to take the spot, but many companies operate on short staffing these days, so this may not be possible. Do the best you can to distribute duties temporarily and record institutional knowledge while searching for a replacement. Issue a Formal Response A formal letter of resignation usually requires a formal response. This formal response is the first step in the paperwork that must be completed to end the employment contract of the departing employee. A formal response letter should: Be in a formal business letter format . This letter is not a casual agreement, and your response may be considered part of evidence or discussions down the line, particularly if there’s ever a legal disagreement. State acceptance of resignation . Typically, the first paragraph will include an acknowledgment of the employee’s intent to leave, as well as a statement of their intended final day. Show compassion and offer support . This inclusion is the most customized part of the letter. It should express professional sentiments that you are sad to see them go and offer them support in their future endeavors, including being a reference for future job searching. Of course, this should be tailored to the relationship and circumstances you have with the departing employee. Be proofread . Nothing is worse than immortalizing a typo or poor turn of phrase in a formal letter that will be filed away and kept for years to come. Be saved . The employee’s letter of resignation, and your response, should be held in their file with HR for a relevant duration. These records should be kept in case disputes arise later. There are many options for formal letters. Some companies issue them as a matter of course and as part of their procedure. Others consider it more or less a formality, while everything else gets handled in a more casual, verbal, in-person manner. It also depends on the relationship between the company, HR, their manager, and the employee. If there’s antagonism or ill will, the process may be insulated behind formality. If it’s all casual and friendly, the letter may be little more than record-keeping. For examples of letters and templates you can use, check: Linguaholic’s analysis of resignation receipt letters and responses. Indeed’s analysis and template versions of response letters. Sample letters from MyCareersFuture. An example letter from GreatSampleResume. Your letter may or may not contain an attempt to bargain to keep the employee around. Again, this may depend on your relationship with your employee and their reason for leaving. Offering a counter-offer, promotion, or another package to retain the employee may be able to change their mind and keep them around. Be aware that employee retention is a tricky issue. If an employee expresses their intent to leave and you give them a counteroffer to stay that they accept, this sets a precedent. Other employees may use this as leverage to ask for increases of their own, which can trigger either a wave of demands or a wave of resignations. Situations like this are why retention is challenging to navigate . Include and Proceed with the Next Steps Once you have accepted the letter of resignation, you need to begin the transfer of knowledge and duties immediately. Your employees had work to do, but they will no longer necessarily be doing it. Their duties need to get assigned to other employees who can handle them temporarily, or another employee needs to get promoted to assume those duties, and their duties distributed, and so on. Sometimes this is easy with a simple division of labor amongst an existing team. Sometimes it’s a cascade of changing responsibilities that results in restructuring the department. Behind the scenes, as far as the employee is concerned, you need to begin hiring a replacement, either for the employee or for the person promoted to replace the employee. Depending on your hiring process, you may need to start from scratch or have a pool of hot leads ready to be contacted for an interview or offer. Ideally, the timeline provided and the structure you have established within HR will allow you to handle the transition smoothly. What Not to Do Reacting inappropriately to a letter of resignation can have disastrous consequences for your business. Depending on how you react, it might: Spur other employees to demand compensation or leave. Damage your employer's brand and reputation for future employees. Damage your ability to smoothly transition to a new employee. Breach a contract or violate behavioral policies and lead to punishment or legal action. Thus, it’s not enough to know what you should do. You should also know what you should avoid.  Don’t take it personally. In some cases, you are the reason the employee is leaving. Most of the time, even if this is the case, they will act professionally and won’t state that as the reason. Regardless of whether or not it’s true, please don’t assume it is or act like it is. Reacting personally or acting defensively is a natural response to an adverse event, but you have to resist it. Employees come and go; it’s part of doing business. Remind yourself of this fact.  Don’t argue or berate the employee. “You can’t quit; you’re fired!” is not an appropriate response. Reacting with anger, bargaining, or attempting to argue that the reasons they’re leaving are not valid will only create ill will between them and your company. Worse, it can spread to other employees and even to candidates beyond your office walls, and that sort of reaction can have long-reaching repercussions. Don’t express relief or happiness. Even if, realistically, you’re glad to see them leave, don’t let anyone know. “Do not–ever–immediately tell every other employee how relieved you are that the departing employee is departing. Don’t do it in one-on-ones, or even if you have a great relationship outside of work. It makes you look unprofessional and will make the other employees wonder whether you’re harboring similar thoughts about them and their performance. Even if you are positively bursting with glee that the departing employee is leaving, wait until you’re with your partner or a non-work friend to revel in your delight.” – Zippia . If you follow all of these precautions, you’re much more likely to ensure a positive relationship with your former employee, which can lead to referrals for new candidates in the future, as well as a generally more positive employer brand. Sooner or later, it’s a situation you’ll need to deal with. Learning how to handle it well is an essential skill for an employer.

There are many different ways a company can encourage employee retention; one of the most popular is the retention bonus. At first glance, it seems like a good idea. Employees who stick around get a bonus to financially reward their loyalty. What’s wrong with that? The truth is, almost everything. Retention bonuses have tons of issues; foremost among those issues is a simple fact: there’s no evidence that they work . What is a Retention Bonus, Specifically? A retention bonus is a monetary bonus given to employees outside of their usual salary. Most often, they are used when there’s a crisis or shift in the company, such as a PR disaster or a merger, but they can also be used during a crucial business cycle to try to ensure that key employees stay on board. “A retention bonus is a targeted payment or reward outside of an employee’s regular salary that is offered as an incentive to keep a key employee on the job during a particularly crucial business cycle, such as a merger or acquisition, or during a crucial production period. This payment, meant to keep an employee from leaving their position, is typically a one-time payment.” – Investopedia . Bonuses are also frequently used to combat corporate poaching . Since poaching employees is explicitly not illegal, companies need to do something to keep their employees around, and bonuses are a common answer to that problem. The Many Reasons Bonuses Don’t Work for Retention The biggest problem with a retention bonus is that there’s no evidence that they’re effective. Bonuses have a lot of issues, and as it turns out, they are rarely more attractive than whatever outside reason the employee has to leave.  Bonuses are one-time payments and don’t foster long-term loyalty. The biggest issue with a bonus is that it’s just that: a bonus. Bonuses are one-time payments, unlike a raise, which is a long-term benefit to the employee. As such, the employee knows that the money is just a one-time thing. They might recognize how minimal it is, compared to what actual compensation would be worth, especially if they’re already considering outside offers. Consider the plight of nurses right now. Many hospital systems are offering anywhere from $5,000 to $40,000 as a sign-on bonus. Meanwhile, nurses who haven’t jumped ship are getting a pittance in comparison. On top of that, the new starting salary for nurses is increasing such that a fresh-out-of-school nurse can be making more than a ten-year veteran of the hospital. Even a more significant retention bonus won’t solve that problem.  The effect a bonus has on retention “wears off” over time. Another major problem with a bonus is associated with its temporary nature. Many employees look at a bonus and think, “alright, that’s enough to keep me around for a month.” After that month is up, the employee no longer feels guilty about looking for a new job and is still just as willing to jump ship; all the bonus did was keep them around for a few weeks. Now, if the reason you’re offering the bonus is due to crunch time, and in a month, you won’t need their services as crucially, this is fine. However, that’s not the case in most situations. Often, bonuses are used to potentially increase retention through tricky and permanent situations like mergers and acquisitions. Unless you’re willing to pay a retention bonus every few months, you’re not going to get long-term effects from the bonus, and at that point, it’s just a raise by another name and with less consistency.  Money is an ineffective motivator for retention when the reason to leave isn’t monetary. When an employee chooses to leave your company, why did they make that decision? Sometimes, sure, it’s because you’re not paying them enough, or their benefits aren’t good enough, or they’re spending too much money on a commute. In those cases, a bonus might be able to get them to stick around while you work out a better offer, increased benefits, or higher pay. Most of the time, though, the reason an employee leaves has nothing to do with the money. Maybe they don’t like their manager. Maybe the company merging with yours has a bad reputation, and they want nothing to do with it. Maybe they don’t like the direction your company is going. Maybe they don’t feel valued or that their contributions are meaningful. In these cases, a bonus won’t help and can even hurt if it’s insultingly low.  Uneven bonuses can convince others to jump ship. When you give out a retention bonus, who do you pick? Most companies choose their most valuable or crucial employees. It seems fine on paper, but put yourself in the shoes of the employees who don’t get a bonus. They feel less valued or less respected, and they have tangible evidence that you don’t care about them as much as you do about the people who got a bonus. Even if you pay them more, all they see is themselves getting passed over for a bonus. You might keep your bonus employee around, but the others might leave in response. Bonuses can also cause resentment or jealousy in loyal employees who don’t get one. This reason is an extension of the same point we just made but with a different angle. Those employees who don’t get a bonus feel bad about the situation. Many of them, however, may not be in a position to jump ship immediately. So, they’ll foster that resentment. They might work more slowly, put less effort into their job, or not pay as much attention. Some rare cases might even subtly sabotage their job out of spite. All because they didn’t get a bonus when someone else did. A bonus gives an employee a buffer to search for a better job. Another problem with a bonus is that, unless there are specific stipulations on how long the employee needs to stick around to get the money (such as paying it out over the course of three months), it just becomes a financial buffer the employee can use to search out a new job anyway. Absolutely nothing stops them from seeking out new work, and even if you have stipulations on the bonus paid out, they can use that lost bonus to negotiate a higher starting rate from a new company. Savvy employees may seek additional bonuses when they know they’re available. Once you’ve opened the Pandora’s Box of bonuses, you open yourself up to potential exploitation. Many employees will see that someone got a bonus and will start to fish for one for themselves. If they know that they’re a critical employee, even if they’re loyal enough to stick around, they might start a job search, talk about it with their coworkers, “accidentally” browse Indeed on a company machine, or otherwise let slip that they’re thinking about leaving. In the best-case scenario, they essentially hold themselves hostage until you pay them a bonus. At worst, their job search is real enough to find them a better offer, and you lose an employee you weren’t otherwise going to lose. Bonuses can encourage bad behavior because they prove you need the employee. A bonus is a tangible form of proof that you need the employee enough to pay extra to keep them around. Many employees will take that as a sign of job security and may relax their behavior. They may be more free with criticism of the company or their managers, they might slack off or work less, and some may even get full of themselves. Either way, bad behavior can result from a bonus, not because of the money itself, but because of the implication. A bonus only encourages staying around, not working harder. The flip side of a bonus is that a retention bonus is literally “we’re paying you to stay here and keep doing what you’ve been doing.” It confers no additional responsibilities, rights, or value, so the employee has no reason to step up their game. If you give them a retention bonus and then expect them to work harder, take on additional responsibilities, or otherwise do more, you’re going to be out of luck. This is especially true of situations where you give one employee on a team a retention bonus but cut two or three others from the team due to a merger or acquisition cutting budgets. Dividing those responsibilities amongst the remaining team requires more incentive than just a minor one-time bonus. Convinced that bonuses don’t help? Well, good news; there are several things you can do instead of offering a bonus that can boost retention. What to Do Instead of a Bonus to Encourage Retention Since a plain old monetary bonus doesn’t do enough to encourage retention – and can even have the opposite effect – you should look for other alternatives. There are plenty of ways you can boost employee retention in different ways. Give your key employees a raise. One of the biggest problems with a bonus is that it’s a one-time payment with no increased overall value to the employee. That money isn’t treated like an additional perk of the job; it’s just something they can use to pay down debt or buy something nice. It’s a treat, not a diet. One of the best ways to boost retention, particularly for your key employees, is to give them a raise. A raise shows that you value them not just right now, but for the long term. More importantly, it’s more value to them over time. If you think a raise seems expensive, the cost of hiring a new employee to replace the lost critical worker can be even steeper, so it’s worth considering the balance. Conduct exit interviews and look for the reasons people leave, to address them. Inevitably, people will leave your company. Turnover is natural; it can even be encouraged in a good company; once an employee reaches the peak of their growth with you, it’s better to help them move on than to try to keep them around in a job with no future. In cases where turnover is negative, it’s crucial to conduct exit surveys and interviews as part of an offboarding process . These allow you to ask questions about why the employee is leaving, pointing to problems you may or may not know about. Once you’ve identified a problem, you can then work to solve it. Some problems don’t have easy solutions. If all of the turnover traces back to a bad manager, getting rid of that manager is beneficial. If people are leaving because of company culture or an impending merger, there’s not likely much you can do about it without extreme changes to the company. Offer retention tools like stock options that incentivize sticking around. Stock options are often referred to as “golden handcuffs” because of their sheer value coupled with their ability to keep employees around. They can be a significantly valuable addition to a benefits package as part of a retention plan. That said, stock options only work if the employee trusts that your company is growing and going places; if they think you’re on the verge of failing, they won’t find value in your stock. Provide employees with training and growth opportunities. Another way to foster loyalty and keep employees around is to provide them with a route to improve themselves, their skills, and their careers. Training, promotions, and growth opportunities are some of the best things you can provide; when you can offer them. When an employee reaches as high in the organization as it’s possible for them to go, though, you may need to confront the reality that they’ll need to leave sooner or later. Allow for a healthy work-life balance. These days, many employees are more concerned than ever before about their work-life balance. They want free time, time off, flexible hours, and general respect for their time and their lives outside of the company. If you can’t provide that, they’re going to find somewhere that can. Retention doesn’t have to be an unsolvable problem. There are ways to go about it successfully, but bonuses aren’t likely to be your golden ticket.

Any time an employee quits or otherwise leaves your organization , it’s essential to understand why. This holds true whether they’re retiring after a long and happy career, leaving because their temporary contract is up, or moving to greener pastures. Understanding why an employee leaves can show you issues at the ground level that you might not be able to see from above. It can reveal systemic problems, problem managers, and other issues that drive turnover; and that you can fix. “An international financial services company hired a midlevel manager to oversee a department of 17 employees. A year later, only eight remained: Four had resigned, and five had transferred. To understand what led to the exodus, an executive looked at the exit interviews of the four employees who had resigned and discovered that they had all told the same story: The manager lacked critical leadership skills, such as showing appreciation, engendering commitment, and communicating vision and strategy. More important, the interviews suggested a deeper, systemic problem: The organization was promoting managers on the basis of technical rather than managerial skill. The executive committee adjusted the company’s promotion process accordingly.” – Harvard Business Review . A crucial part of understanding why employees leave is the exit interview. The exit interview is your one chance to have a heart-to-heart with an employee about why they’ve decided to leave. Unfortunately, exit interviews are also tricky to conduct appropriately. Many employees still fear repercussions even as they leave; what if what they say hurts their chances of returning if things don’t work out or damage their ability to use you as a professional reference? There’s a push-and-pull between the ex-employee’s motivations and the interview goals from HR’s perspective . Remember that exit interviews can be performed either in person – like a hiring interview – or as a survey the employee can fill out and return to HR later. Typically, you want to do both; provide an exit survey with many questions, read through it, and conduct a more specific and targeted exit interview in person. A large portion of the final two weeks of an individual’s employment should be spent arranging this. What we’ve done here today is put together an extensive list of exit interview questions you can ask. All of them aim to help you get a piece of useful information that may identify problems within your organization, which may be solvable to help boost retention and satisfaction rates with your remaining employees. You don’t need to use all of them, but the ones you do use will be useful, for sure. The Basics This first set of questions are the most basic, common questions every exit interview should ask. They lay the groundwork for gathering relevant information without trying to dig too deep or too specific right off the bat. Why are you leaving the company? What inspired you to look for a different job? When did you decide to seek other employment? Could our company have done anything to keep you around? Would you consider returning to the company in the future? Do you think your pay and benefits were reasonable? What should we look for in a replacement for your role? How much did your job change between being hired and today? Did you find your duties to be reasonable or unreasonable? What were the best and worst parts of your job? Do you feel you were treated well in your team or as part of the company? These questions generally focus on identifying the main reasons why an employee is leaving, the context of them leaving, and the details of the situation. For the most part, these questions are meant to go on a basic exit survey since they’ll be general and asked of everyone who leaves. Some of the information is relevant to an exit interview, so the answers should be read. Others are simple and general enough that it’s easier to ask for them on paper than to spend time in an interview asking about them. In particular, you’ll want to pay attention to the questions about a replacement, how the duties of a job shifted over time, and how well the employee feels they were treated. These questions, and the answers the employee gives, can give you deeper insight than they might think they’re providing. Soliciting Feedback This second set of questions focuses on feedback. This feedback can center around the company as a whole, around the role, team, or department, or about specific business processes, mechanisms, or roadblocks that may have contributed to the employee leaving. One vital part of this set of questions is to customize them for your situation. You can tailor them based on the employee’s role, level, and position within the company. You can also tailor them to what the employee has said about their reasons for leaving. What could we have done better as a company? What feedback do you have about your working conditions? How would you improve your position if you could? What kind of constructive criticism would you give to other employees here? Is there a part of our process that you feel needs to adapt or evolve? How would you characterize collaboration and communication between teams? Did you ever feel that you were not equipped to do the job you were asked to do? Did you ever experience harassment or discrimination? If so, was it reported and handled? If it wasn’t, why not? The questions in this section give you deeper insight into what your existing employee thinks of their team, their management, and the company as a whole. They’re essential for getting an overall picture of the company and identifying any problem areas that may drive an employee to leave. In particular, you want to pay attention to any crossover, in these answers, between multiple exiting employees, as that can signal a specific issue that is causing turnover. The final three questions about harassment and discrimination are exceptionally important and need to be handled with care. Bad experiences of those sorts are not just detrimental to your company; they can be grounds for legal action. This is even worse if the employee reported such events but was ignored. Hopefully, however, #8 is a “no,” and the other two don’t matter. Culture and Image This set of questions focuses on your company culture and your image as an employer, from within and without. It will help you get an idea of how well you’ve managed to make a good impression and whether or not the company culture is sufficient for maintaining or growing a positive image outside of your company. Would you recommend our company to friends or family? What three words would you use to describe our company culture? How did working here compare to what you were told when you were hired? What was your favorite part of working for our company? Did you feel comfortable speaking up with ideas, feedback, or criticism? How would you rate our work environment overall? Your overall company culture, both internal and external, is critical for building and maintaining an employer brand. You want to identify if there are cultural issues that could affect your future hiring, your reputation, or your brand image. These can be very detrimental impressions to let go unchallenged and can lead to a suppression of high-quality candidates in the future. Specifics and Details This section of questions focuses on more specific problems and issues that the employee may have run into. These are difficult; the employee may not want to speak ill of the people they’re leaving, even if those people are directly responsible for their decision. They don’t want to come off as rude or burn bridges, after all. You’ll need to be tactful to pull out relevant information from most employees, especially if the employee is on generally good terms and has answered positively that they would be willing to return if the circumstances allowed for it. Did you get along well with your team members? Did you ever receive constructive feedback from your managers? How would you improve the team you worked with? What could your manager/team leader have done better? Did you feel that you had adequate training or routes to improvement? Did you feel that you had growth and promotion opportunities within the company? Who amongst your peers or leadership stood out as exceptional? If you had parting words of advice to your team, what would they be? This last section of questions is very flexible. Some of them are useful as-is, but many of them are contextual; if an employee wasn’t part of a team, wasn’t a long-term employee, or didn’t receive training, those questions aren’t applicable. These are the questions you’re more likely to want to ask during an interview, tailored to the answers they gave on a survey. The Purpose of the Exit Interview The exit survey and exit interview serve a defined purpose for your organization. When you compile questions like those above into an interview and survey, you do so with three primary goals in mind. To determine why the employee is leaving. At the most basic level, you want a record of why employees are leaving. Some turnover is inevitable, and many reasons an employee might leave are not related to your job in any way. For example, if an employee suffers a family crisis and needs to leave their job to become a caregiver, it doesn’t reflect poorly on your organization. Conversely, if your employees are leaving primarily due to a single bad manager – “ People don’t leave jobs, they leave bosses ” – it’s something you can identify and work to change.  To uncover pain points and roadblocks that drive employees away. You can uncover the reasons employees leave in three ways. The first is when they up and tell you directly. Many employees will not want to do this outright for fear of burning bridges, but some might. The second is when they hint at it in the things they say, but don’t outright state. People often dance around an issue by trying to remain tactful. Unfortunately, there tends to be a level of ill will between HR and an exiting employee, making a frank discussion even more difficult. The third is when multiple employees leaving all have similar things to say. One employee leaving because of a given manager might be a poor cultural fit. Three employees leaving out of the same team, even if they cite cultural differences, might indicate a problem manager. Reasons like this are why it’s essential to perform these surveys for all existing employees and keep records on hand to review. To gain a better understanding of ground-level company operations. Upper management, executives, and C-levels often have a disconnected view of the company they run. It’s inevitable simply because of how they operate at a different level, guiding operations and strategy rather than tactics and actions. Thus, these upper management individuals need to gain a better perspective in any way they can. All the theories and strategies in the world won’t make a business a success if the employees are downtrodden when working on it. Overall, exit surveys and interviews are of critical importance for a wide range of reasons. They give you a ton of excellent information you can use to improve your company, your teams, and your benefits packages. Moreover, they can identify problem people, processes, or holes in coverage that lead to a poor experience for employees. Especially in high turnover cases, this is critical for fixing the problem and righting the ship.

The performance review, performance appraisal, or performance evaluation is a critical part of every company’s process. Every employee, periodically throughout their employment, must have their performance evaluated. This evaluation is an essential tool for various purposes, so you must understand what it involves, what it’s used for, and how to perform one if you’re in any way involved in the process. Today, I hope to demystify this process by defining it, explaining how it’s used, and providing some examples. Let’s get started! The Definition of a Performance Appraisal While there are many different terms for a performance appraisal, they all reference the same event. A performance appraisal is a meeting, typically between an employee and their manager or department head, and potentially involving an HR manager , a C-level executive, or another member of upper management. This meeting is traditionally an evaluation of the employee’s performance since their last review (or their first review since they were hired). These are: Planned meetings. Performance appraisals are planned meetings. Employees need to be aware of them, prepared for them, and aware that they exist. Given their importance in the professional growth opportunities, compensation, and other aspects of the employee’s career, they should not be surprised by a review. Regular meetings. Appraisals need to be held on a regular schedule. Typically, performance appraisals happen once or twice per year, though some organizations may process them quarterly. Formal meetings. A performance appraisal is a precise process as part of the management, organization, and bookkeeping for the company. They are recorded and kept on file, used to chart the overall progression of an employee, and can be used both to guide the employee towards improvement and to diagnose issues with the team, department, or company as a whole. Standardized meetings. Performance appraisals are only as valid as the data they harvest. If they are informal or inconsistent, the information they provide cannot be accurately compared to past evaluations, and thus their value is diminished. Impartial meetings. A core element of an effective performance appraisal is that it is neutral. In particular, if an appraisal is used as grounds for termination, it may become evidence in an accusation of discriminatory termination, as has happened often in the past . A performance appraisal guide gives you the structure to evaluate the job performance of the employee in question. Thus, the related question is, what is job performance? From AIHR Digital : “Job performance is the degree to which an employee fulfills the tasks of their job description. People with good job performance fulfill all the requirements of their job, achieve the objectives of their jobs, and meet the criteria for performance. This is also referred to as in-role job performance.” In addition to in-role job performance, an employee may also be evaluated or commended on their out-of-role performance. Out-of-role performance includes behaviors that benefit the organization as a whole, the employee’s team, or the company brand. Employees are going above and beyond the requirements of their job, stepping out of their way to facilitate onboarding or mentor a new hire, or other “organizational citizenship” behaviors all fall under this heading. It’s essential to maintain the distinction between the two. Once an employee’s extra-role performance becomes commonplace and evaluated as the baseline, it becomes an incentive to either withdraw from that performance or leave the role. Employees who do not feel appreciated for going above and beyond will not go above and beyond, to put it simply. What Are Performance Appraisals Used For? A performance appraisal has many purposes. The appraisal helps the employee maintain awareness of their performance. An employee cannot adjust their behavior if they are not aware that their behavior is incorrect. The performance appraisal is a way for the manager or supervisor to offer feedback to the employee, letting them know if they’re doing well or doing poorly, if they have issues, or if they are right on target. That said, an appraisal should not be a surprise. In a modern organization, one of the core pillars of employee satisfaction and effective management is transparent communication. Employees should be aware of shortcomings long before their review, through more information sit-downs and ad hoc meetings, and given feedback to address issues long before they become problems. The performance appraisal is merely a way to formalize and codify regular employee performance reviews and serve as an impartial guide to measure that performance. The appraisal helps notify an employee of issues they may not recognize as issues and helps guide them towards a resolution. Sometimes, an employee may not know how much of their feedback is personal or straightforward requests from a manager and how much of it is more critical business-related feedback. These mistakes are often a failure of communication, but the performance appraisal can help drive home the importance of appropriate feedback. One single review is rarely grounds for termination but can lead the employee to re-evaluate their behavior and work responsibilities to adjust their course before subsequent reviews. The appraisal praises the employee for their satisfactory and exemplary performance to encourage further performance . However, performance appraisals should never be entirely negative. Every employee has redeeming qualities, or else the organization would not still employ them. Thus, a good performance appraisal balances negative feedback with positive feedback. Specifics of both should be mentioned in their review and used as examples. They need to know what they should be doing more of and what they should avoid. No one is perfect. Performance appraisals should rarely be wholly positive, but neither should they be relentlessly negative. Purely negative performance evaluations can hurt your employee morale, make them less likely to work to improve, and more likely to find alternative employment before they are terminated and have a black mark on their record. The appraisal helps the organization determine its budgetary disbursement for bonuses, raises, and other benefits. A vital element of the performance appraisal process is the ability of the company to use an unbiased and consistent approach to determine the disbursement of financial incentives and other employee compensation. Budgets are limited, and it’s worthwhile to reward exemplary performance as an incentive to encourage further outstanding performance. The appraisal can establish grounds for the termination of a chronically underperforming employee. No manager enjoys terminating an employee. However, if an employee consistently underperforms or makes disastrous mistakes, the evaluation must determine if they are doing more harm than good. Circumstances can lead to a drop in performance. There are often multiple options to assist in an employee’s circumstances before resorting to termination. For example, do they need more medical leave, training, access to therapy, or another system you can provide to address their issues? Is there a disagreement between your team members, or is there an outside factor that is poisoning your work environment? A performance appraisal can be an opportunity to discuss the problems on the record and then turn the discussions towards individual team members. Once you’ve identified the root of the issue, you can work towards resolving the pressures that force job performance into the back seat. How is a Performance Appraisal Performed? There are many different forms of performance appraisal, and none of them are perfect: Self-evaluations are a common way employees can offer their perspective of their position, but they are not suitable for an official performance appraisal. However, they can be an excellent preliminary tool to help management understand what an employee does and doesn’t recognize about their situation. Behavioral checklists are a format wherein a form is created with a list of behaviors, typically specifics about duties and performance. These are often a simple yes/no checklist. This format avoids over-generalizing behaviors and is very quick to fill out. However, the format removes nuance and the ability to discuss goals, and the chance to go into detailed analysis. 360-degree feedback is a form of performance evaluation that delivers feedback to the employee, not just from their supervisor or manager, but from others on their team, in their department, and in upper management who may be involved in the process. As a result, they can provide good, comprehensive evaluations of the bigger picture. However, not everyone is capable of delivering constructive feedback, especially peers. Additionally, people involved in the process but who do not directly interact with the employee may not have much to contribute. Rating scales come in several forms. They may have a +1 – 0 – -1 scale of “exceeds, meets, fails to meet expectations.” They may have a poor-to-excellent, 1 to 10 scale. Regardless of scale, the goal is to set specific behaviors, attributes, and qualities to evaluate. Additionally, each one is weighted as to how important it is in the overall scheme of things within the organization. This way, low ratings on minor behaviors do not counteract high ratings on more essential qualities. The primary drawback of these scales is obfuscation, complexity, and misunderstanding. It can be difficult for an employee and even a manager to grasp, at a glance, what is considered a “good” result and what isn’t. Additionally, these scales – particularly the broader 1-10 scales – are more subjective and can lead to biased results. Management may think that an employee is doing excellent work and award them with a score of 8/10, but that employee may be worried that they are underperforming in some way. You can see the issue here. Additional forms of appraisal may be used in specific circumstances. For example, a critical incident appraisal can be a valuable point of feedback for how an employee acts during an unusual but severe incident. These are not a replacement for regular performance evaluations but can be an accessory to help showcase unusual behavior during a crisis. What Metrics Should a Performance Appraisal Measure? It’s essential to develop a performance appraisal prior to performing the evaluations. Establishing precedent for what is important and worth monitoring is critical. What, then, should your appraisal measure? Core job competencies. These are the skills, abilities, and performance attributes everyone within the department (or the company) needs to succeed — for example, the ability to communicate within and without their department. Role competencies. These are the skills, abilities, and attributes the employee needs to succeed in their specific role. For example, these could include fluency with a ticketing system for a support agent, fluency with a type of software for a developer, or ability with a coding language for a programmer. Role expectations. What is expected of the employee, and how well do they meet or exceed those expectations? How well is the employee collaborating with their team and the rest of the company? How reliable is the employee in terms of their attendance, performance, and other aspects of their role? These are just some of a large number of possible qualities your evaluations can examine. Performance appraisals are, by necessity, customized to the company, the department, and the role of the employee, within a general framework. Not all aspects will apply to all roles; an internal developer does not need to be judged harshly for lack of customer service skills if they are not in a service position, for example. What Do Good and Bad Performance Appraisals Look Like? When developing performance appraisals, it can be helpful to see what good appraisals look like. More importantly, it’s valuable to see what bad appraisals look like, to avoid falling for the same mistakes yourself. This post from Valamis includes four examples, two good and two bad. It showcases common pitfalls, such as over-generalized, under-specific, and overly-personal performance reviews. It also showcases how to do negative performance reviews in a personalized, helpful way, without accusatory phrases, overt negativity, or other common problems. This post from Business News Daily showcases five examples of user-submitted anecdotes, performance reviews that were among the worst submitted. This post from Venngage offers a series of formats and templates for generic (but useful) performance appraisal documents. They have sample text filled in, and the post also includes advice from an HR manager. Overall, it’s a good resource to start building your evaluation process, at which point you can customize it for your company. Overall, it’s difficult to show examples of unequivocally good or bad performance appraisals because, by their very nature, they are customized to the company, department, and role. As long as they can accurately measure an employee according to work-relevant qualities and behaviors, they are often good enough. Just make sure your appraisal process meets the qualities above – regular, planned, formal, impartial, and standardized – so that they can be used to accurately judge your employee performance. Conclusion  How do you feel about performance appraisals? Do you have any questions for me? Are you already implementing these in your organization, or are you planning to?  Performance appraisals are a vital element of employee management, serving to evaluate and guide employee development. These structured, regular, formal, and impartial meetings ensure that both employees and management maintain a clear understanding of job performance and expectations.  They are instrumental in employee growth, addressing issues, recognizing commendable performance, and making strategic decisions regarding compensation and termination. A well-crafted performance appraisal balances objectivity with tailored feedback, fostering an environment of continuous improvement and alignment with organizational goals. As such, they are not just a tool for assessment but a cornerstone of effective management and employee satisfaction. Ready to transform your company into a high-performance team? Contact us today to learn how we can help you build the team you need.