The Employee Retention Puzzle: Solving It with Science

Employee turnover is a persistent challenge for organisations. Common reasons include low pay, poor work-life balance, negative workplace culture, limited career advancement opportunities, the lack of appreciation, mismatch between personal values and company mission or a combination of these factors.

High employee turnover impacts productivity and increases recruitment costs as more time is spent on training new employees. Research by Forbes, Mercer and SHRM shows that employee retention remains as one of the biggest challenges in 2024, which is likely to persist into 2025.

The Harvard Business Review reveals that around 80% of employee turnover is attributed to poor hiring decisions. In other words, a significant majority of employees leave because they were not a good fit for the role – often a result of flaws in the hiring process.

To improve employee retention, organisations have to look into enhancing their hiring strategies – starting with hiring the right people.  A more data-driven approach to recruitment and talent management, particularly through the use of psychometric assessments, can help achieve this.

Psychometric tools such as personality and behavioural assessments offer a deeper and more meaningful understanding of the individual’s preferred behaviours. In turn, these would allow us to develop further insights such as the candidates’ future potential and person-role compatibility.

According to a study by Judge, Heller and Mount in 2002, personality traits play a significant role in job satisfaction, which in turn impacts employee retention. The research highlights that a strong person-job fit positively correlates with job satisfaction, organisational commitment, and overall job performance. On the other hand, a poor person-job fit correlates with the intent to quit. Thus, the employment of objective assessments can aid organisations to better understand an employee’s personality and compatibility with the nominated role, ultimately enhancing job satisfaction and performance.

By assessing the candidates’ behaviours, not only can organisations better match their strengths to the requirements of the role but also evaluate how well the candidates’ personal values align with the organisation’s core values. The combination of certain behavioural traits can help to predict engagement levels, potential derailers and to some extent, flight risk.

Assessments can also provide insights into employees’ motivation levels and aspirations, enabling organisations to enhance factors that drive motivation and engagement. The assessment results also offer valuable data on work environments where employees are more likely to thrive and remain engaged. Employees whose behaviours do not align with the requirements of the role tend to struggle to meet expectations and fulfil their tasks. They are more likely to experience burnout and disengagement. These insights are crucial when planning for employee mobilisation or transfers to new roles, while reducing the risk of turnover.

The integration of psychometric assessments into recruitment, talent management and succession planning serves as a powerful strategy to enhance employee retention. By ensuring higher alignment between the employee’s behavioural preferences and role expectations, organisations can build and maintain a more stable and productive workforce.