December 13 , 2018

Recruiting Candidates Who Put Money First May Result in Early Turnover

Salary is the No. 1 reason why employees change jobs
Do you work in an organization where increasing an employee’s pay for retention purposes isn’t a realistic option? Whenever you hire someone who is driven by money, you are setting yourself up for future turnover failure. Money-focused hires are likely to immediately quit when they are offered even slightly more money from another firm. Salary is the No. 1 reason why employees change jobs, according to a recent Glassdoor survey of hiring decision-makers (it was cited by 45 percent, and the next factor was advancement at 32 percent).

So, if your firm is losing top new-hires because of your inability to offer them a raise, hiring managers and recruiters could pre-identify any finalists who will likely leave the minute they are offered more money by another employer.

In fact, if you care about future productivity and turnover, identify each of the key motivators of all finalists to avoid placing them into a job situation where their motivators are unlikely to be continually met. Hiring managers should realize that even though it’s not a precise science, it is possible to identify the key motivators of your job finalists to limit future compensation-driven turnover.

The Top 10 Steps for Identifying Recruits With Lower Compensation Expectations

Corporations strapped for salary dollars, government agencies, non-profits, and small businesses all frequently lose new hires within the first 18 months and often around the time when new-hires begin to expect a significant raise. To avoid this “early turnover,” implement one or more of these 10 practical action steps for identifying those that are likely to leave prematurely because of money. The easiest-to-implement identification steps are listed first.

  1. Ask candidates to rank their motivators — During the interview process, you can ask candidates directly “what motivates you?” A superior approach that is likely to elicit more honest responses is to add a formal “motivator identification” step to the hiring process. Ask candidates to force rank their motivators from the most to the least important. Start by providing them with a list of common employee motivators covering both money and nonmonetary factors. Then, ask them to rank their top seven motivators. If money is among the top three, be wary. And take it as a good sign if they rank “having an impact,” becoming an “expert,” or “the work itself” among their top motivators.
  2. Ask references to force rank motivators — ask references to identify a candidate’s motivators. You can, of course, ask each reference to directly list what they perceive to be the candidate’s top motivators. But once again, a superior approach is to provide each reference with a list of motivation factors and ask them to force rank the top five to seven. This is especially important when you are talking to a reference that was their former boss.
  3. Ask why they quit their last jobs — If you don’t do it already, during the interview ask them why they quit their last three jobs and be wary if any of the reasons cited are related to compensation. Not everyone is honest about his or her reasons for leaving. So, alternatively consider asking them to identify the factors that frustrated them about their last few jobs. Look for frustration factors related to a lack of money or promotions.
  4. Use peer interviews to assess motivators — Not only are peer interviews an effective approach for selling a candidate, in addition, in conversations among peers, candidates are more likely to be open about both their concerns and their motivators. Charge your employees with the task of identifying potential new hires who are not a fit for your organization’s compensation practices.
  5. Ask candidates for current and future salary expectations — Ask for both their initial salary expectations and their expectations for 18 months down the road. Discount them if their expectations don’t meet the realities of your firm, but also look for answers that reveal that compensation is not very important.
  6. Identify volunteer experience — Extensive volunteering can be a significant indicator that money is not a candidate’s prime motivator. It’s even better if their volunteer work was in the same field or industry as your job. Unless you have evidence that their economic situation has recently changed, it may be okay to assume that a great deal of recent volunteer work means that they are not, currently, money driven. Educate your recruiters to identify volunteer experience.
  7. Reveal current and likely future pay — Tell candidates during the interview what the compensation will be, and look for partially negative responses. If you have data historically revealing when they are likely to get their first raise and how much, let them know and gage their reaction. And be willing to let candidates drop out rather than trying to talk them into lowering their expectations.
  8. Look for categories of workers where high pay is less likely to be a primary motivator — There are categories of candidates who are on average less concerned about a single source of compensation, such as seniors, military retirees, and parents returning to the workforce. Recent college grads from low-demand majors and those moving from part-time to full-time work (who are already getting a bump in total pay) may also be good targets. Obviously, be careful not to inquire about a candidate’s personal situation during the hiring process.
  9. Use a permanent hiring team — Because most managers hire infrequently, they’re not likely to excel at selling top candidates or assessing a candidate’s prime motivators. So, consider following Google’s approach and use a trained and dedicated hiring team at least for jobs where long-term retention is essential.
  10. For candidates with high compensation expectations, tie their pay to performance — If your firm can’t easily give a salary raise but it can offer performance bonuses, then ask candidates if they are willing to place a significant percentage of their possible compensation at risk, based on their performance. Even if they are motivated by money, take it as a good sign if they’re willing to tie their money expectations to their performance.

Continue to Assess Every Employee’s Key Motivators

In addition to using pay priority as a hiring and promotion criteria, knowing which factors motivate an employee can help individual managers increase their day-to-day excitement and productivity. And because employee’s motivators may change over time, formally survey your employees each year to identify their current monetary and nonmonetary motivators.

Final Thoughts

Unfortunately, I have found that almost all corporate and noncorporate hiring processes share a common fault: an extremely short-term focus. And because of that limited focus, hiring processes ignore the essential longer-term factors of assessing a candidate’s career trajectory and their likelihood for long-term retention. Although hiring processes routinely assess “cultural fit,” they fail to assess “compensation fit.” Taken together these shortcomings end up hurting your organization because recruiting doesn’t add much value when it hires a top performer that soon becomes discouraged when their continuing pay expectations are not met. The resulting cost will quickly be lower productivity and eventually a high likelihood of early turnover.

Author’s Note: If this article stimulated your thinking and provided you with actionable tips, follow or connect with me on LinkedIn and subscribe to the ERE Daily.

As seen on ERE Media on 10/1/2018.

image from bigstock

 

About Dr John Sullivan

Dr John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations.

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