I recently had a conversation with a Talent Acquisition Leader that left me shocked. While talking about how important it is to hire the right person, I sensed an alarming degree of indifference around hiring accuracy altogether. I understand this is not top of mind for everyone, but this was coming from the Director of Talent Acquisition for a Fortune 5,000 company.

Now more than ever, human resources teams are expected to create tangible value for the business—from hiring and retaining talent to performance management to leadership development and more. People analytics are key to helping HR teams meet the demands of today’s business landscape.

There seems to be a current trend among employers to offer more unique and diverse office perks in the hopes of attracting and retaining talent. While perks can be fun and bring momentary happiness, they do not meaningfully move the needle on employee satisfaction or retention. One such example was highlighted by Payscale’s list of employee tenure at Fortune 500 companies, which denotes that Google, a company that offers top-notch perks, has a median employee tenure of 1.1 years.

The ability to manage and lead people is often thought of as an inherent trait that all individuals possess. This is not the case, as shown by Gallup’s State of the American Manager: Analytics and Advice for Leaders. Gallup conducted a comprehensive study based on 2.5 million teams and managers around the world, and their results showed that only 10% of working people possess the talent to be a great manager.

What's Causing Your Turnover?

I started my career at Bain & Company, a global management consulting firm charged with helping some of the world's largest organizations solve their most critical business challenges. 

If 80% of turnover can be attributed to bad hiring decisions, it's apparent that incorporating retention-related criteria into your hiring process is the way to truly mitigate turnover. But it can be hard to determine how much of your hiring process should focus on turnover. 

Jim Collins said, “The most important decisions business people make are not what decisions, but who decisions.” If 80% of your turnover is the result of bad hiring decisions, the most important thing you can do to decrease employee turnover is to focus on hiring people more likely to stay.

When it comes to retaining top talent, it's important to understand the true drivers behind why high performing and satisfied employees ultimately decide to go another direction. In the modern HR world, many would say that optimizing employee engagement is the way to go, when in reality, the research shows there are more important things we should be looking at to retain top performers. 

One of the most common strategies for reducing turnover has been to invest in employee engagement initiatives. These efforts take many forms (engagement surveys, manager trainings, expensive company perks, etc.).

In an ever more competitive economy, hiring the right person for the right job has never been more critical. With more millennials entering the workforce each year, companies are finding that turnover costs hinder their ability to scale and thrive. Various strategies have been employed to reduce turnover in almost every industry. Most have yielded only modest results despite significant investment.