Employee Retention Employee Retention
Employee Retention

  Cultivate Your Internal Customers
By Joyce L. Gioia
A recent Ohio State University study of nearly 39,000 employees nationwide found that employees were more likely to stay with an organization, if they were recruited from inside sources rather than through advertisements or employment agencies. Results suggested companies can increase their job survival rate by 25 percent or more, if they focus on finding new workers through inside sources such as former employees, people referred by current or former employees and internal job postings.

"These inside sources are much more effective than outside sources, such as advertising and employment agencies, in attracting employees who stay," said John Wanous, co-author of the study and professor of management and human resources at Ohio State's Fisher College of Business.

The findings are important because most human resource executives still think advertisements are the most effective source of new hires, according to a survey conducted and published by the Society of Human Resource Research and CCH, Inc.

The actual numbers are striking. The OSU study results suggest that if a company currently uses mostly outside recruitment sources and has a job survival rate of 30 to 70 percent, switching to more effective sources will increase the rate by 8 to 10 percentage points.

Of course, improved job survival rates mean big savings for a company. Employee turnover always affects the bottom line, and any action taken to increase stability will have a direct effect on profitability.

Why, exactly, are persons recruited internally more likely to stay? Wanous has a few ideas: "People who have inside sources at a company are more likely to know what it is really like to work there. They know the ups and downs. The better someone's information, the less likely he or she is to quit from unexpected disappointments," he said. We know that meeting expectations is instrumental in maintaining workforce stability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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