Employee retention and the endless hiring loop

on March 30, 2023

A key business issue for companies in manufacturing is the struggle to fill open positions. It is causing business pains with missed business opportunities, delayed output, increased overtime, safety and quality risks, and frustration for existing employees.

Competition for prospective employees is extremely high, not just in manufacturing, but in many industries.  So, the overall pool of skilled applicants available to manufacturers is shrinking. 

In desperation, companies are changing their hiring practices to:

  • Instant hiring with limited or no interviews
  • Work history, skills, stability, and reasons for leaving previous jobs are not factors in hiring decisions
  • No reference checks
  • No drug screening
  • Rehiring multiple times
  • Sign on bonus

This starts the endless hiring loop.

Endless Hiring Loop

The endless hiring loop is a situation where companies are stuck in a cycle of hiring new employees to replace the ones who have left. This cycle can be frustrating and costly, as the company is constantly spending money and resources on recruitment and training, only to see those employees leave after a short period of time. We have talked to Kansas manufacturers who have experiences of being ghosted by employees a few days after they started the job or having to let employees go because they are not able to perform to the required levels.  This endless loop can also have a negative impact on employee morale and the company's reputation, as a high turnover rate can make it difficult to attract and retain top talent.

One of the main reasons for the endless hiring loop is a lack of focus on employee retention. Many companies prioritize recruiting new talent over retaining existing employees, which can result in a revolving door of staff. However, research shows that it is often more cost-effective to retain existing employees than to constantly hire and train new ones. Not only does retention save on recruitment and training costs, but it can also lead to increased productivity, as experienced employees are often more efficient and effective in their roles.

To break the endless hiring loop, companies need to take a strategic approach to employee retention. This means identifying the reasons why employees are leaving and implementing measures to address those issues. For example, if employees are leaving due to a lack of career development opportunities, the company could invest in training and development programs to help employees progress in their careers. If employees are leaving due to poor management or a toxic work environment, the company could work to improve communication and foster a positive workplace culture.

Another key factor in employee retention is employee engagement. Employees who are engaged and feel valued are more likely to stay with a company long-term. To improve engagement, companies can focus on creating a positive work environment, providing opportunities for employee feedback and input, and recognizing and rewarding employees for their contributions.

Finally, companies can break the endless hiring loop by creating a strong employer brand. A positive reputation and strong company culture can attract top talent and make employees more likely to stay with the company. This means investing in employee benefits, creating a positive workplace culture, and actively promoting the company as a great place to work.

The endless hiring loop is a frustrating and costly cycle that many companies find themselves in. However, by prioritizing employee retention, companies can break this cycle and create a more stable and productive workforce. This means identifying the reasons why employees are leaving, improving employee engagement, and creating a strong employer brand. By taking these steps, companies can reduce turnover, save on recruitment and training costs, and improve their overall performance and reputation.

As you juggle with the balance between employee retention and employee attraction, remember what Doug Conant once said, “To win in the marketplace, you must first win the workplace.”  (Douglas R. Conant is an internationally renowned business leader, New York Times bestselling author, keynote speaker, and social media influencer with over 40 years of leadership experience at world-class global companies.)

Let KMS help you win in the workplace and retain your talent.  (We can also help you streamline your hiring practices.) 

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Take a look at our blog The Hidden Cost of Employee Turnover

Why Strategic Planning is Important in Employee Retention