In a time when getting the right people into the right positions within an organization can be challenging and expensive, it is important that leaders know whether their talent is staying, and if not, why not. The 90-day failure rate is a useful metric that allows organizations to measure new employee retention within that critical first three months of employment. 

Calculating the 90-day failure rate is a simple percentage, but the important part is knowing how to utilize that information. Your 90-day failure rate gives you a range of clues into where you can improve your recruitment and retention strategies. What’s more, knowing your new hire failure rate and understanding how you can influence that can save significant amounts of time and money – from $7,500 to $28,000 according to the Society for Human Resource Management. 

Quality of recruitment

According to Motion recruitment’s IT Salary Guide 2024, despite the layoffs over the last 18 months, there is still high demand for tech jobs, with particular skills gaps in data analytics, executive management and IT, mobile and/or web design management. Skills gaps present a significant challenge for Human Resources departments who are under pressure to find new talent that is appropriately skilled and experienced, often while under increasing financial constraints. 

So, what do you do if you just can’t find someone with the skills that you need? Hiring the best of an unsuitable cohort may seem like the best option but it comes with significant risk. The new hire may leave after a short period of time or may stay beyond their probation period but remain out of their depth and under skilled, after which it is possible that mistakes may be discovered, and they are harder to address. When consciously making a “best of an unsuitable bunch” hire, the best-case scenario that recruiters can hope for is that they identify areas of weakness and agree a structured plan to upskill the new hire on the job.  

Organizational culture

Your 90-day failure rate doesn’t just give you insight into the quality of your recruitment processes, it can tell you a bit about your organizational culture, too. Are existing team members creating a warm and welcoming environment for new hires, or is there an undercurrent of hostility? This is something to be particularly aware of if a post was not offered to an internal candidate. If you notice a drop in new hire prevention or a spike in resignations, it may be worth looking at where talent is going and asking yourself “why”. 

Onboarding processes

First impressions last and the onboarding process is a critical vector impacting employee retention and ongoing commitment to the organization and, specifically, their department.  According to Bamboo HR, most employees (70%) will decide within the first month if their new role is right for them, with organizations having on average 44 days to seal the deal.  

The same research showed that there are key elements that impact the onboarding process for new hires, including:

1. A clear outline of whom to ask questions.
2. Comprehensive training on the company and its services and products.
3. Access to all the tools and technologies required to do the job (including appropriate log ins).
4. Lack of direct mentor/contact point.
5. Undefined line manager. 

Improving new hire retention 

The first step to getting the right people into the right positions – and keeping them there – is to ensure top quality recruitment. In an age of rapid development and a widely acknowledged skills gap, this is not always as easy as it sounds, so it is up to managers, recruitment agencies and HR departments to be creative. 

• Prepare to upskill.

It’s not having someone without the entire set of desired skills that is the problem. The problem arises when you fail to identify and address the skills gaps. If it is not possible to find someone with the unique set of skills and competencies that you need, reexamine what is essential, and what can be developed on the job. This is a win: win for employer and employee as the employer gets a good hire, and the employee has the opportunity to develop further. 

• Be creative with employee benefits.

If you are not attracting the right caliber of staff, it may be time to look at the packages that you are offering. You may not be able to offer big tech salaries, but flexible working, additional holiday or shorter working hours could be more valuable than money to some, particularly highly skilled individuals who have worked for the high-salary organizations and realize that work/life balance is more important to them than a higher salary.

• Recruit internally.

It can be easy to overlook the talent within. If you can’t find the “right” hire, rather than risking the process on an external candidate, it may be wise to assess your existing staff and see who has the potential to achieve the competencies and skills that you are looking for. This will not only save on recruitment fees but will help create a culture of internal value and commitment. 

• Scan the horizon.

The tech world is changing by the minute. It is not enough to know what you need now; you need to assess what you might need tomorrow, next week, next month and even next year, and prepare contingencies that will allow you to meet those needs, without compromising on the quality of delivery today. Encourage your employes to upskill and reskill and keep an eye on what is coming so that you have the capacity to recruit effectively. 

The above actions will not only contribute to a robust and successful recruitment strategy, but they will also help you to embed an organizational culture of support, engagement and valuing your staff. This will, in turn, help to create a warm working environment that will undoubtedly help to improve your retention rates within the first 90 days and beyond. 

Once you have made the hire, whether it is internal or external, it is important that you invest in the onboarding process. A clear strategy that ensures that new appointments are aware of what is expected of them, that they are fully equipped to take on the new role, and that they know where to go for information and support, will help to facilitate a smooth transition. Clear line management and a workplace buddy/mentor system will further support this, enabling you to build a strong, loyal, productive team that supports organization excellence now and in the future.