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STRATEGY: Values for Hire

lisa 1.1webIn a 2012 study from the Center for American Progress, they reviewed 11 research papers and 30 case studies on employee retention, and concluded that it costs businesses about one-fifth of a worker’s salary to replace that worker. This includes direct costs such as:


  • Separation costs (exit interviews, severance pay, higher unemployment taxes);
  • Costs to temporarily cover an employee’s duties;
  • Replacement costs such as advertising, search and agency fees, screening applicants, including physicals or drug testing, interviewing and selecting candidates, background verification, employment testing, hiring bonuses, and applicant travel and relocation costs; and
  • Training costs such as orientation, classroom training, certifications, on-the-job training, uniforms, and informational literature.

Let’s not forget the indirect costs (only 2 are included in the 1/5th figure and are much harder to measure) and include:

  • Lost productivity for the departing employee who may spend their last days on the job writing exit memos or with reduced morale;
  • Lost productivity due to the need to hire temporary employees;
  • Coping with a vacancy or giving additional work to other employees;
  • Costs incurred as the new employee learns his or her job, including reduced quality, errors, and waste;
  • Reduced morale; and
  • Lost clients and lost institutional knowledge.

magnify_text_11295Harvard Business School professor Zeynep Ton in a Harvard Business Review article suggested that “…a combination of investment in the workforce and operational practices that benefit employees, customers, and the company” may be the key to breaking this pattern, particular in the service industries.

I wondered: could we improve our retention rates if we made adjustments to our hiring and onboarding practices to include a focus on core and aspirational organizational values and beliefs, as well as key job-specific values needed for employee success?

The Ease of a Smile
I overheard a table discussion in one of my trainings a few months ago where the individual was talking about hiring staff for a customer service position. He mentioned that one of the things he looks for is the ease with which the person smiles in the interview and engages in warm interactions with others that he or she meets – showing a naturally happy or joyful disposition. He went on to say that he could teach the specific job responsibilities and tasks (the what); but he needed to see a foundation of service values for the person to be a good “fit” in that organization and a success in customer service. Bingo!

Again this week I was leading a group of senior directors through a process to determine the key leadership values needed for their managers and supervisors.  It led to a fascinating discussion around values and which are most important to drive their organization’s success.

The Importance of Core Values, Beliefs and Aspirational Values
I realized how important organizational core values and beliefs, as well as aspirational values (those needed for the future), are to employee high performance and retention. Values guide behavior and decisions. They reflect our assumptions and define how we will interact with others. They serve as a rallying point (our intrinsic motivation) and energy source.

Different positions, as well, may have very specific values that are needed or ones that are more important than others. For instance, values such as authenticity, compassion, courtesy, friendliness, fun and joy may be critical for customer service; while different values, such as consistency, control, economic stability, efficiency, fairness, integrity and order may be more important for a different type of position.

Behavioral Interviewing
Once those critical values have been determined, along with the organization’s core and aspirational values, you could develop behavioral interview questions. In the answers to these questions might lay the “diamonds of information” needed to improved candidate selection, integration, overall higher performance, and retention.

What do you think? How have you integrated values into your hiring and onboarding practices in your organization? In review, how important has alignment of values been to your employees’ performance?

If you’d like some help with values, download our Mission, Vision, Values Guidebook









Looking to find the right recruit?  Use our Behavioral Interviewing Guidebook to help get past the “fluff.”


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