A Recent Study Shows a Simple Way to Reduce Your Employee Turnover
Posted: July 23, 2019
You came here because you want to reduce your employee turnover and improve your retention rate. That’s great! You have probably read many articles about this topic and received many HR tips: such as hire the right people, fire the wrong people, offer competitive pay and benefits, give praise and offer flexible work schedules. These are all great ideas but here’s one you may not have thought of: screening an applicant’s work history using Equifax/Work Number’s new Employment History report.
Around 75% of applicants lie on their resumes* so it is no surprise that performing employment verifications leads to higher retention rates. That means less resume flipping, painstaking interviews and most importantly hiring more reliable, long-lasting employees. According to Equifax’s extensive research, companies that started performing verifications for the first time saw their six-month retention rates increase by 28%, their one-year retention rate increase by 45% and their two-year retention rate increase by 59%. Companies that only performed limited checks previously but now screen most of their candidates observed a 27% increase in two-year retention rates. Some industries experienced significant increases compared to their non-verifying industry counterparts. For example, the administrative industry retention rate increased by 26.9% and the oil and gas industry increased by 42%. Simply put, you get to keep good and trusted employees for longer.
Leveraging unique Equifax analytical abilities and The Work Number, we sampled 1,800 organizations across 18 industries, with at least 500 new hires over a set two-year span. Then we segmented those businesses into two groups: those that use Pre-Employment Verifications data and those that don’t.
Clearly, lowering employee retention rate can save your company money. In Equifax’s study of a company in the retail industry they showed that improving retention by just 3% provided $2.1 million in savings. This retail company had an average employee tenure of 6.8 months, but by using Equifax/Work Number’s Employment History reports to lower bad hires they were able to raise their retention rate to 7.1 months. A new hire costs $1,500 and they annually hire 33,339 employees. With this increased retention rate, they now only must hire 31,652 employees, which leads to a net savings worth $2.1 million dollars.
It’s proven that conducting employment verifications allow you to keep employees longer and reduces hiring costs. Traditionally employment verification checks could only verify the information the prospective employee provided. But, what about the information that did not make it on their application or resume?
Enter Equifax/Work Number’s Employment History reports. Equifax’s Employment History report use the power of their Work Number database to check an applicant’s employment history, which covers ALL employment history in their database. The Work Number is a database used by employers to log job history and is trusted by thousands of companies, including 82% of Fortune 500 companies and the majority of federal government employers. 50,000 employers currently use the database and it is continuing to grow every day.
Equifax/Work Number’s Employment History reports save the headache of constantly hiring and allow you to look beyond a candidate’s job application or resume.
For example, Bob applies to become a bus driver and shows you a resume that lists for the past three years he worked as a cashier at a supermarket and before that he was a mechanic. He went immediately from being a mechanic to a cashier. However, the Equifax verified data shows that in between his job as a mechanic and cashier Bob held a job as a bus driver for only two weeks. Now what happened?
If Bob only lasted two weeks at his previous bus driving job, it’s very likely that he would not last much longer at your company. We all know the high cost of the wrong hire, underperformers, unengaged workers and the hassle of terminating them. These are financial and time strains that your business does not need to suffer.
Another benefit of Equifax’s Employment History report is that you can verify employment data without alerting the applicant’s current employer. This means no more phone tag, unclear answers or wasted time waiting on employers to return employment information.
Let’s say your company is hiring a new Director and you interview Brandy; she seems like a great candidate who has a lot of experience. She claims she served as a Director for the past year and was previously a Representative. However, when verified with Equifax’s Work Number History Report the data shows that Brandy might not be so great after all. Brandy never served as a Director and was only a Representative. You can instantly verify commonly inflated title and tenure from the Work Number, without having to contact any actual employers.
Equifax/Work Number Employment History reports help you find the best candidates quickly and keep them longer, allowing you to spend more time focusing on running a successful business.
Nova, Annie. “This Job Applicant Said He Was a CIA Spy; He Didn’t Get the Job.” CNBC, CNBC, 16 Sept. 2017, www.cnbc.com/2017/09/13/75-percent-of-human-resource-managers-have-caught-a-resume-lie.html.
“The Leading Online Employment Verification Services | The Work Number.” The Leading Online Employment Verification Services | The Work Number, Equifax, www.theworknumber.com/.