The cost of poor retention in Recruit, Train, Deploy

With the technology skills gap only increasing, hiring top talent remains difficult. As a way to address these concerns and create a pipeline of technology talent - Recruit, Train,Deploy has been hugely successful. Its focus on potential when recruiting future talent has helped companies onboard new talent with the skills specifically needed to succeed in a constantly evolving industry, while also opening the door to diverse applicants who might otherwise lack a route into tech.

However, the set-up of Recruit, Train, Deploy (RTD) as a contracting solution means businesses often fail to plan for long term success with their RTD consultants. Not enough attention is given to retention, which jeopardises the success of using RTD to overcome talent shortages and address diversity and inclusion. This comes with significant economic implications: even when removing the cost of hire, poor retention can cost more than 10% of the overall costs of a RTD workforce. A company with 100 consultants with an 80% retention rate will lose around £394,521 each year in exit costs, decreased productivity, knowledge loss and lowered morale compared to a company with a 90% retention rate.

Below, we’ll cover the unseen costs of poor RTD retention, and demonstrate how considering consultants as appreciating assets and planning for their long-term success within a company can deliver retention rates of up to 90%.

The cost of poor retention

Thinking about consultants as temporary additions is a short-sighted way to look at talent management. As well as the impact poor retention has on an organisation’s likelihood of hitting its diversity, equity and inclusion (DEI) targets, there’s a significant economic cost to high consultant churn.

In technology, as in all sectors, losing a junior employee can be extremely costly across all industries – with research suggesting it can cost as much as 50% of their annual salary in replacement recruitment costs, workplace productivity and lost institutional knowledge.

This figure remains largely the same for RTD consultants, as despite removing up front recruitment costs, we still have to account for the costs of lost productivity, team knowledge and line manager time to the recruitment process.

It also takes 3-9 months before an employee is fully up to speed on company systems and integrated into an existing team. During this time, existing employees need to take on extra responsibilities, which can lead to some loss of productivity whilst the junior employee gets settled in.

As well as decreased productivity, companies with high attrition also suffer from poor knowledge retention. In many technical roles, each employee carries institutional knowledge not known by others in the organisation. On average, 42% of the expertise required to carry out a role is only known by the person currently in that position. The loss of these skills and insights when employee turnover is high can be detrimental to business outcomes.

Finally, there are less tangible costs to consider, such as a company’s brand. The reputation an organisation gets for having high churn and low workplace morale can become a self-fulfilling prophecy, impacting a department’s culture and increasing turnover.

Changing focus with RTD to drive retention

To improve retention, companies need to look beyond RTD as a short-term talent solution and instead move to a model of Recruit, Train, Acquire (RTA). Our last article on evolving RTD addressed how focusing on long-term consultant acquisition can drive greater diversity, development and community. However, addressing consultant retention is also critical for an organisation’s economic health.

Instead of thinking of the process as finished once a new consultant is in place, organisations must consider how to engage with their long-term potential and invest in them as a company asset. There should be a move towards proactively attempting to retain top talent as a way to improve organisational effectiveness. Costs of recruitment, onboarding and training and the lost time from employees picking up extra responsibilities can be mitigated by focusing on the long-term success and retention of junior talent and therefore minimising the frequency with which new employees need to be brought in. Investing in this long-term success requires efforts towards learning and development, company culture, and pastoral support. 

Rather than guided learning ending once consultants start in role, resulting in a ‘sink or swim’ culture, learning and development should be continuous throughout their time with employers. Companies that approach development as an ongoing initiative are likely to see great results: 76% of employees say they’re more likely to stay with a company if it offers continuous training. Developing long-term pathways that support progression within your business will also improve engagement, with employees being 21% more engaged when they have access to the right L&D. 

Introducing mentoring schemes for new consultants can also help increase engagement and integration by providing consultants with direct access to ongoing support. Increasing engagement has a knock-on effect on retention: Deloitte reports that organisations with engaged workers have employees who are 57% more effective and 87% less likely to leave their organisations.

Mentoring schemes also help consultants understand potential career progression paths within an organisation. Combined with a culture of development, where consultants are actively encouraged to think about themselves as long-term assets to a company, this can significantly impact retention rates. Deloitte reports that workers confident in their growth path are 3.3x more likely to stay with their current employer for the next 12 months. Companies that approach development as an ongoing initiative are likely to see even better results:

Finally, organisations can improve the retention of RTD consultants by ensuring sufficient pastoral support. Brandon Hall Group reports organisations with a strong onboarding process improve new hire retention by 82% and productivity by over 70%. However, that’s only when onboarding is treated not as a week-long activity, but rather a sustained and ongoing process over an employee’s first year.

Each of these strategies has one thing in common: they treat RTD consultants as a long-term business asset, not as a short-term stop-gap. Embracing the evolution from Recruit, Train, Deploy to Recruit, Train Acquire. By investing in tech consultants, companies can go a long way to ensuring their continued organisational loyalty. At Technology Academy, our partners have seen the power of this focus on retention first hand. Achieving retention rates as high as 90% thanks to consultants being offered the right level of pastoral and technical support while in role. In turn, resulting in a culture shift that will have long-term positive impact on the sense of belonging felt by acquired consultants.

Summary thoughts

RTD has focused on getting people through the door for too long. For sustained success, businesses need to look beyond hiring initiatives to understand the impact of retention on their bottom line. Improving poor retention can lead to significant economic savings, as well as improvements in organisational health, such as an improved culture and the preservation of valuable internal expertise.

A shift from RTD to RTA can address issues with retention. By showing long-term investment in consultants, companies can increase loyalty, improve productivity and knowledge sharing, and save hundreds of thousands on recruitment and training. Perhaps most importantly, a shift to long-term planning means the challenges of talent acquisition aren’t just pushed further up the chain of seniority, to become a problem at a later stage.