Recruitment and Employee Turnover
Benjamin Schneider famously wrote that the people make the place.1 Substantial research has followed up on his Attraction–Selection–Attrition (ASA) paradigm. The basic idea of this framework is that individuals tend to be attracted to and selected by organizations for which they are likely a good fit; in those cases where an individual is hired who does not fit, they are more likely to leave the organization (voluntarily or involuntarily). Thus, recruitment, selection, socialization, training, and turnover all interact to contribute to the organization’s culture and the nature of the workforce. In this chapter, we focus on research linking recruitment practices with retention.
Among all human resource management activities, the recruitment process is the first formal opportunity managers have to manage employee turnover. Alison Barber has provided the following widely accepted definition of recruitment: “Recruitment includes those practices and activities carried on by the organization with the primary purpose of identifying and attracting potential employees.”2 To this, we would add that recruitment activities can also play the role of helping potential employees that may be a poor fit for the particular position or for the organization self-select out of the recruitment and selection process. Realistic job previews (RJPs) and employee referrals are both important recruitment practices that managers can implement to manage turnover. Both have been shown to enable organizations to hire individuals who are more likely to remain with the organization. Let’s take a closer look at the research evidence behind the power of RJPs to help manage turnover and how you, as a manager, can get started with implementing RJPs in your organization today. Afterward, we will take a look at the evidence for employee referrals and how you can implement referrals in your organization as well.
Principle 1: Providing a Realistic Job Preview Improves Employee Retention
The Research Evidence
RJPs (defined as “the presentation by an organization of both favorable and unfavorable job-related information to job candidates”)3 can play an important role in attracting potential employees who are likely to be a good fit with the organization and discouraging potential employees who may be a poor fit. Much of the power of RJPs lies in the ability to provide applicants with accurate job expectations4 paired with the applicants’ degree of self-insight.5 This occurs because of the voluntary nature of the job market. Armed with an accurate understanding of the job in question, a candidate with the insight to be aware of his or her own performance capabilities and career desires has the ability to opt out (self-select out) of a job opportunity that he or she perceives is not a good person–job fit. On the other hand, armed with an accurate understanding of the job, a candidate who is aware of his capabilities and desires is likely to more enthusiastically opt in (self-select in) to a job opportunity that he or she perceives as a good person–job fit.
In addition to the self-selection process described above, RJPs have also been considered by researchers to influence employee turnover through future met job expectations, role clarity, a greater commitment to their decision to accept the job, and enhanced perceptions of organizational honesty.6 As a matter of fact, our research recently revealed through a meta-analysis (meta-analysis is a statistical technique for combining the results of many different studies into one integrated set of findings) covering roughly 17,000 employees that enhanced perceptions of organizational honesty may be the primary reason RJPs influence retention.7
Getting Started with RJPs
How can you put the RJP evidence into management practice? To get started, you should be aware of four important dimensions of RJPs—substance, setup, source, and sequencing.
The substance (content) of the RJP should include both rewarding and challenging aspects of the job.8 Remember, you want to give a realistic preview of the entire job, not just a frightful warning about the negative aspects. Examples of rewarding aspects of a job may include a sense of accomplishment, a sense of purpose, or colleague camaraderie. Some sample challenging aspects of a job may include emotional trauma, high likelihood of burnout, or a fast-paced culture with multiple tight deadlines.
Popular setups (formats) for RJPs include booklets, brochures, videos, and verbal forms (such as conversations or interviews). Research has found that RJPs set up verbally, especially candidate interviews with job incumbents,9 do a better job of managing employee turnover than do other forms.10 General communications research, however, indicates that multiple communication formats may increase attention to and retention of information.
The source of the RJP is important for credibility. Future co-workers and job incumbents are among the most credible sources,11 while professional recruiters and hiring managers (both of whom may be perceived as pressured and incentivized to just fill a job with the first willing and qualified candidate) are among the least credible RJP sources. Just as with format, though, general communication research indicates that multiple sources may increase attention to and retention of information.
The sequencing or timing of the RJP is also important. RJPs provided before a job offer has been made rather than after an offer can increase candidates’ perceptions of employer honesty as well as increase the self-selection effect provided by RJPs.12 It is also a good idea to pepper realistic job information throughout the recruiting process (e.g., in the job advertisement, the initial interview, the site visit, etc.) rather than viewing the RJP as a one-time event such as the delivery of a booklet or video.13 This allows the RJP to be a more natural part of the recruiting process, allows for multiple communication points to ensure the candidate “gets it,” and allows for the information to trickle in rather than blasting the candidate with information overload.
In Summary, a Good RJP Will:
•provide both favorable and unfavorable job information,
•include multiple formats, especially verbal,
•be delivered through multiple credible sources, especially future co-workers and job incumbents, and
•be integral to the entire recruiting process, not just after the job offer has been made.
Principle 2: Employees Recruited Through Employee Referrals Stay Longer
The Research Evidence
As a tool for identifying and attracting potential employees, employee referrals can be quite powerful. Research evidence has shown that job candidates recruited through employee referrals are higher quality applicants14 and are less likely to turnover15 than individuals recruited through more formal means such as newspaper advertisements or employment agencies. Three explanations for this include a realism effect,16 a source credibility effect,17 and a prescreening effect.18
Research suggests applicants recruited through referrals may be likely to possess more accurate information about what a job entails, similar to an RJP. Employee referrals may have an RJP effect in that the referring employee has an insider’s (often first hand) knowledge of the work and work environment and is in a position to share this insight with the job candidate in an informal manner. A colleague once referred one of the authors for a position with his employer. Through a series of informal conversations, the colleague sent the message that, “you won’t get rich working here, but it’s a great place to work.” He also provided insight on the manager and the department, insight that would not have been provided during the formal recruiting and selection process.
Having been friends with the referring colleague and his family for a number of years, I also viewed him as a credible source of information regarding the job. I put more stock in the information I received from my colleague than I did from the information I received from the professional recruiters for two reasons. First, I knew that my colleague would not jeopardize our long-standing relationship to fill a position in which he had no stake. Second, I knew the recruiters had a stake in filling the position and may be pressured to portray the position and the organization in a more positive way in order to fill the job.
Employee referrals also have a prescreening effect. The idea here is that a current employee is putting his reputation on the line by referring a job candidate and will therefore only refer candidates that are well qualified and would likely be a good fit for the position and the organization. The colleague from the example above recognized this and said early in the process that he would only refer me if I was serious about the position. He knew I was well qualified, but he wanted to make sure that his referral of me was not a waste of the company’s valuable time and resources.
Getting Started with Employee Referrals
How can you put the employee referral evidence into management practice? The following seven rules of thumb generally apply.19
First, keep it simple but structured. An overly complex employee referral program is likely to deter employees from participating. No one likes a bunch of red tape. Likewise, an overly simple employee referral program is likely to elicit overly simple responses. A simple “do you know anyone who wants a job?” program is likely to produce an equally simple, “Not that I know of” type of response. In the case of employee referrals, Goldilocks got it right. Not too simple, yet not too complex.
A good employee referral program is rewarding but not so expensive as to lead the costs to outweigh the benefits compared to other recruiting sources. Employee referral awards are typically in the range of $500 to $3000 to the referring employee. The amount you decide upon will be based on factors such as the value of the open position to your organization, the typical costs of recruiting for this position using means other than employee referrals, organizational cash constraints, and other organizationally specific factors.
Good employee referral programs are more specific than unspecified. Being specific about the job qualifications and requiring employee referrals to meet those qualifications can increase the quality of the candidates referred by employees. It encourages the employee to do much of the prescreening for you.
Another way to encourage employees to prescreen their referrals is to limit the number of referrals they can make during a given period of time. Limited rather than limitless referral bonus opportunities encourage employees to be selective in whom they refer.
Rewards for successful employee referrals should be intermittent rather than immediate. It is generally a good idea to space the rewards out over time. For example, you may wish to specify that the reward for a successful referral will be paid out quarterly for the first year of the employee’s tenure as long as the employee remains in employment.
The employee referral program should be communicated regularly rather than forgotten summarily. Like any other employee benefit program, it is not enough to include a short blurb on a one-page flyer received during orientation. It is important to regularly remind employees about the employee referral program and its benefits. For example, you may want to highlight cases of successful employee referrals in your company newsletter blog.
Finally, it is extremely important to ensure that your employee referral program breeds diversity rather than homogeneity. Because people tend to know and refer people that are similar to themselves, employee referral programs run the risk of limiting diversity and creating an overly homogenous workforce. It is important to encourage diversity in referrals and monitor the process for adverse impact.
In Summary, a Good Employee Referral Program Will Be:
•simple but structured,
•rewarding but not ridiculous,
•specific rather than unspecified,
•limited rather than limitless,
•intermittent rather than immediate,
•communicated rather than forgotten, and
•diverse rather than adverse.