Highly-trained, knowledgeable, and well-tenured staff are some of the most critical assets of a business. Long-serving employees know their job inside and out, know processes intimately, and often have deep inter-company relationships that break down silos and foster collaboration.
At the same time, successful companies recognize the importance of bringing in new talent to fill existing roles or help the organization gain new capabilities. New employees bring fresh perspectives. They can help reinvigorate stale processes and inject new energy into activities that have become routine. New employees are more likely to ask why things are done the way they are, leading to better working methods.
The percentage of employees with less than one year of tenure is a measure that can give you a snapshot of your workforce. That snapshot can serve as a baseline as you work to strike an ideal ratio between new and longer-tenured employees. APQC’s data for this measure shows that within organizations at the 25th percentile (those with the fewest employees with less than one year on the job), an average of 7% have been with the company for less than a year. Within 75th percentile organizations, 20% of employees have less than one year of tenure.
While it’s important to know where you stand on this measure, it’s equally important to know the “why” to establish whether change is needed. The answers to those questions depend on factors unique to the organization, like industry, size, revenue, and business strategy.
A company, especially a growing one, will always be hiring new employees. Robust process and knowledge management practices help minimize the business disruption caused by new hires and workforce churn. Experienced employees often have a wealth of process knowledge, but that knowledge doesn’t help anyone else if it is not documented. Process documentation and other forms of knowledge capture ensure that business-critical know-how does not walk out the door with employees when they leave.
Good process and knowledge management shorten new employees’ time to competency. Ideally, an organization should have process documentation and desktop guides for each process. These tools allow each new hire to quickly learn how to execute their assigned tasks. The resources should be accessible within a few clicks in the flow of work — employees should never be far from the knowledge they need.
Are multiple employees starting at the same time? That’s a leverageable opportunity to drive retention for the entire group. The company can foster engagement, relationship-building, and networking immediately by grouping new employees into cohorts and giving them opportunities to work together. When employees have a vibrant network of peers from day one, they are more likely to integrate seamlessly into the organization’s culture.
To retain both new and long-serving employees, one of the most effective things you can do is listen to what they need and meet those needs in creative ways customized to your culture. Small acts of care that directly speak to employee concerns send a powerful message about the organization’s support for employees. For example, if you know a large portion of employees commutes long distances to the office, buy them a few tanks of gas. That will help defray the rising cost of fuel while demonstrating your appreciation.
If the organization has a highly competitive benefits package relative to other organizations, make sure that employees know its value. The grass often looks greener elsewhere, but sometimes it only looks that way because employees are not fully aware of the available benefits and perks.
Tracking the percentage of employees with less than one year of tenure can help you think deeply about the current workforce mix — and the opportunities and challenges it might present.
Perry D. Wiggins, CPA, is CFO, secretary, and treasurer for APQC, a nonprofit benchmarking and best practices research organization in Houston.