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Research on the recruitment and retention of graduates and their subsequent performance suggests that there are three critical ‘moments of truth’: (1) the recruitment process itself; (2) after a period of about three months – at the end of a common probation period; and (3) around six months into the job, when new recruits stabilise within the organisation, its culture and either begin to perform well within the role or plateau their performance level within the tolerances of the system.

Attrition of new graduates recruited shows typical rates of 30 to 46% leaving within the first 12 months – increasing costs to the organisation both in terms of replacement and time in covering for new recruits leaving (IBM EMEA study, April 2004).

An IES 2003 study into why graduates leave their organisation stated the number 1 reason as: they were “unhappy with the employer they had joined” – this in spite of an average GBP28K starting salary.

Retention of graduate recruits is becoming an increasing concern. PWC Worldwide research in 2004 across all sectors found:
• 60% of employees surveyed were actively looking for a new position.
• 75% indicated that they would be with the company for less than 2 years.
• 60% indicated that they would leave their current job to follow a good mentor, over half of these would do so for less money.
• 100% felt that they could do better financially in a different commercial sector.
• 100% indicated that if they left, they would be harder to replace than they were to hire and more expensive economically than their current compensation.
• 46% of new hires left their new company within the first 12 months.

The banking sector is not immune to these alarming trends and issues:
• Attrition is 25-60% for new graduate recruits in the banking industry (IBM EMEA Survey, April 2004).
• “We are all fishing in the same pond for the best grads!” – commenting on the average GBP28K starting salary for new graduate recruits (CEO, European Financial Institution).
• “How many will be in the company a year from now?” (Senior VP, UK High Street Bank).

Best practice in recruiting and retaining talent

Talent management is the modern by-word of business leaders, 68% of CXO’s in a recent EFMDsurvey ranked ‘Talent Management’ as their top concern. Interestingly 47% of HR managers rated it their number one concern. In the same survey, organisations with the best talent retention rates of below 30% employed a number of interventions and processes to achieve this:
• 95% Training and development
• 85% Coaching
• 80% Career mentoring
• 75% Assessment centres for recruitment
• 40% Flexible working hours
• 25% Pay increments or bonuses