When it comes to employee retention vs. hiring a new candidate, employee retention is what most companies prefer. It is considered to be more beneficial for a company in the long run as it cuts down interviewing, onboarding, and training costs of hiring new candidates. In addition, employee retention also strengthens the morale and productivity among existing employees.

The question is, should you hire a new candidate or retain an existing employee? Hiring a new candidate is essential for adding a new perspective while retaining an existing employee boosts the overall company performance. As a business, you need to understand that making the right decision between employee retention and hiring affects your bottom line.

To help you understand and make the right decision, here’s what you need to know about employee retention vs. hiring a new candidate.

What is Employee Retention?

Employee retention is commonly known as an organization’s ability to retain their existing employees. Employers tend to retain their resources by leveraging multiple retention tactics, like giving a salary raise etc.

Retention mostly begins at onboarding and extends beyond hiring. When retaining any employee, it’s important to know why they want to leave in the first place. It’s after understanding your employee's pain points, you’ll be able to retain them.

Employee Retention vs. Hiring a New Candidate - What’s The Difference?

Employee retention focuses mainly on keeping the existing employees satisfied and hiring a new candidate is all about adding a new perspective. Retention nurtures loyalty, and hiring adds a diverse viewpoint. Both are equally important for any organization. You should know when to retain and when to hire a resource. That’s where the strategic balance comes into play.

Retention vs. Hiring - What Should Businesses Choose?

It’s important to consider several factors when deciding whether to retain or hire a candidate. Such as the cost, employee value-addition, and team morale. Employee retention happens to be monetarily quite less expensive than getting a new candidate onboard. Retaining current staff cuts down on the cost of interviewing and advertising for a new job opening. Moreover, onboarding a new candidate can be lengthy and a time-consuming process, as you’ll need existing resources to induct new ones.

Another important factor is employee morale, which is adversely affected by a high turnover rate. Employees may feel uncertain and can start questioning their job security. On the other hand, retaining an employee can have a positive effect on the overall morale. As it makes employees feel valued and recognized for their efforts.

Your existing employees possess institutional knowledge that’s irreplaceable and hard to acquire. They’ve had enough time to understand how the company functions and can add value. Would a new resource be able to match the level?

While hiring new talent can bring in a fresh perspective, the costs and risks associated with this approach often outweigh the benefits. Making the right decision relies solely on your ability to understand your business needs. The better you understand, the easier the decision will be.

Still Confused? The Coach360 can help!

If you are still confused about whether you should retain or hire a new candidate, the coach360 is here to guide you. With our personalized coaching and customized corporate training, coach360 helps businesses identify their business needs.

Through insights and actionable strategies, coach360 can help you better understand the strengths and weaknesses of your current workforce. This makes it easier to decide whether to focus on bringing in new talent or retaining the existing one.

With the right approach, you’ll be confidently able to make decisions that align with both your business and the employee's aspirations.