How can you improve employee retention and turnover rates?

3 minute read


People are the fuel on which organisations run. The skills, efforts, and attitudes of a workforce are what determines a company’s marketplace strength and bottom line.

Because the right people matter so much, HR managers and industrial psychologists must select the right individuals: those who will want to, and should, stay on the job.

For firms looking to lower turnover rates and hold on to the most skilled and talented people, it’s crucial to select candidates most likely to succeed from the very beginning. A prudent place to start is with thorough, accurate personality assessments. 

Here, we explore the costs and burdens of high employee turnover, and how Hogan Assessments can solve this enduring problem by improving retention rates.


Reducing turnover can help save costs

By keeping more highly-skilled employees on the payroll, companies can save large amounts of money on a yearly basis.

Employee turnover has costs that can quickly eat into revenues — for example, severance packages and new recruitment efforts. The sunk costs of high turnover rates, depending on the position, can represent a substantial drain on revenues.

Additional expenses arise with the onboarding and training of new employees. Firings and voluntary departures can also hurt morale and lead to lower overall productivity, which is yet another source of cost.

All things considered, retaining highly-qualified staff is much healthier for the corporate purse than having to fire workers or losing skilled employees.


The effect of company culture on turnover rates

It can cost about ⅕ of an employee’s annual salary to replace an employee, no matter the job level (Center for American Progress). To spare that expense, employers can use tools such as Hogan Assessments to ensure candidates are a good fit personality-wise with the company culture.

Every corporate culture is unique, functioning almost like a living, breathing entity as the core team contribute their skills and ideas. But for people who don’t fit, morale suffers, and as a consequence, work performance goes down.

Personality is a decisive factor in a person’s ability to thrive within a given culture. Therefore, screening for personality, alongside the assessment of on-paper skills, is essential for selecting talent that will both grow with and enrich an organisation’s culture — and over time, make a real bottom-line difference.


The effect of high turnover on productivity

When companies lose good employees in waves, it damages daily operations and deals a blow to the organisation’s long-term outlook.

Even when strong hires are made to fill vacated positions, the time it takes to train them up to standard can mean severe losses in productivity.

New employees often need 1-2 years of onboarding to become productive. Within that span of time, the contributions lost from the former employee usually translates to burdensome and real costs, some of which can be felt company-wide.


Hogan Assessments: A proven solution for reducing turnover rates

Hogan’s suite of assessments is a set of psychometric tools that help employers select and assess premium talent. That is, those candidates who will most likely stay on the job long-term, and perform at the highest level.

With Hogan tools, hiring managers can eliminate much of the guesswork involved in employee selection, and improve overall retention rates, which limits turnover and spares all the costs that go along with it.

Hogan Assessments consist of three research-validated tools for measuring top talent:

  • The Hogan Personality Inventory (HPI) looks at personality characteristics that predict everyday performance at work.
  • The Hogan Development Survey (HDS) measures negative personality traits that arise once a new employee has settled into a position — the ‘watch-out’ traits that can hurt productivity over time.
  • The Motives, Values, Preferences Inventory (MVPI) looks at a candidate’s core values to predict job satisfaction, compatibility with the culture, and future outlook as part of the team.


By using all three tools together, companies can maximise ROI on their talent selection and appraisal process, while minimising turnover rates. Businesses can retain the best possible talent for the long term, which saves substantial cost and lays the groundwork for unfettered corporate growth.

Talk with us to see how we can help you select and grow the right people for your organisation.