Productivity or tenure, which is more important?

Productivity or Tenure?

The hare and the tortoise, a fable by Jean de La Fontaine, an apt comparison.

"This applicant isn’t good enough for us!" We’ve all heard this before from colleagues, usually, in teams with aggressive corporate cultures.  However, how often have we heard this person is too good for us?  

First of all, we’re not advocating hiring people who are unqualified for the job.  It is also important to make a distinction between jobs which require mastery of very specific technical skills versus jobs which require skills which can be gained relatively easily through training or development.

How often have companies attempted to calculate the true cost of staff turnover?  Too often do people complain about the transactional cost of having to replace someone, namely the recruitment fees, and ignore the true cost of replacing staff.  Imagine someone leaving a team working at full productivity.  They will leave a hole as big as their contribution to that productivity.  Furthermore, taking into consideration the morale and stress levels of the remaining team members, we can see how productivity can take an additional hit.  Leave this for too long and additional team members might also seek a change of scenery.  Now. let’s try and factor in other considerations.  Assuming a quick replacement is found, how much time does it take the new recruit to be as productive as his or her predecessor?  How much training, support and development will he or she need?  How much does this cost?  In recent years, many studies have looked at the true cost of staff turnover and found that to replace even someone with low skills can cost upwards of 50% of their salary.  For highly skilled individuals, this might run into multiples.  Therefore, going back to the original question.  Productivity or tenure, which is more important?  Clearly both are needed but we would argue that it is better to have someone who might be 80% productive but stay for a long time vs 120% productive and only stay a few months.  Paradoxically, the more technical the job, the higher the cost of replacement and therefore the more flexible companies should be in the overall technical appraisal of the individual.

At SkillSnap Recruit, we believe that hiring the most technically gifted individual is not always the best solution and more emphasis should be put on culture fit.  Reducing staff turnover can generate great savings which can then be deployed on training and development.  

But not too much, after all, we don’t want our highly trained staff to come to the attention of our competitors :)

For more information or to use our employee replacement cost calculator have a look at skillsnaprecruit.com.