A restaurant worker on a laptop and text reading "Your 90-Second Lesson to Reduce 90-Day Turnover"

Your 90-Second Lesson to Reduce 90-Day Turnover

Your 90-Second Lesson to Reduce 90-Day Turnover 1016 528 Sprockets

Each bad hire can cost a whopping $5,864, but there are simple steps you can take to avoid this expense instead of just accepting it as part of doing business. Let’s take a look at how to quickly reduce 90-day employee turnover. Time is money, after all, and this brief guide gives an overview of proven strategies you can implement today to start improving retention and saving thousands of dollars. (That’s a pretty good ROI, if you ask us.)

What Is 90-Day Turnover?

90-day turnover refers to the percentage of employees who leave your business — voluntarily or involuntarily — within the first three months of their hire date. Some people call it 90-day turnover, 90-day failure rate, or quick quits, but the impact is the same for productivity, finances, and stress levels. Nobody wants to spend all that time on hiring, onboarding, and training just to have a new worker quit soon after investing those resources.

How to Calculate 90-Day Turnover

A recent study found that 20% of employees leave within 90 days of starting a job, meaning one in five people hired today will be gone in three months. However, your turnover rate could be even higher than that. So, how do you calculate this important metric? Here’s a step-by-step guide to find out:

1. Record the number of employees you have at the beginning of the time period.

2. Record the number of employees you have 90 days later.

3. Add these numbers, then divide by 2. This is your average employee count.

Formula for calculating average employee count.

4. Then, record the number of employees who left (both voluntarily and involuntarily) at the end of the 90-day time period.

5. Divide this number by your average employee count, and then multiply the quotient by 100. This is your 90-day employee turnover rate as a percentage.

Formula for finding employee turnover rate as a percentage.

Why Are the First 90 Days of a Job Important?

The initial 90-day period has been called “the magic window” that shows employers whether or not an employee will be a good fit. Marissa Andrada, Chief People Officer of Chipotle, recently told The Wall Street Journal, “If you see someone hit the three-month mark, the reality is, they’re going to be here for at least a year.” Three months gives employers plenty of time to evaluate workers, almost like an extended interview, and workers have a chance to get into a routine and decide if they’d like to stay long-term. (Workers often figure this out within the first couple of weeks.)

Ultimately, if you could improve your hiring process and increase 90-day employee retention, you’re boosting annual retention and drastically reducing turnover costs. That can add up to a lot of savings, especially in industries like fast food service, which averages over 130% annual turnover.

Strategies to Improve Your 90-Day Retention

Keeping employees longer than three months takes isn’t just about withholding benefits during a probationary period in the hopes that it will motivate them to stay. Here are some ways you can improve retention based on the common reasons new hires leave in the first place:

  • Set Proper Expectations: 43% of employees leave because the job isn’t what they expected based on the description and conversations with their employer.
  • Make New Hires Feel Welcome: 89% of new hires expect to meet their manager on the first day and 83% want to meet their coworkers to start on the right foot.
  • Establish an Onboarding Plan: Many employees feel they don’t receive the proper resources or training to perform their job effectively.
  • Schedule Frequent Check-Ins: Set up monthly or weekly meetings where new hires have a chance to voice any questions or concerns.
  • Set SMART Goals: During the check-ins, ask what their aspirations are at your company. Truly listen to them, make them feel heard, and discuss SMART goals (specific, measurable, achievable, relevant, and time-bound).
  • Praise Them for Progress: Don’t wait until after training or when the 90-day period is complete — recognize employees for their progress early and often. It’s proven to boost engagement and retention.

Know Which Applicants Will Stay — Before You Hire Them

Wouldn’t it make the hiring process so much easier if you just had a crystal ball that revealed which applicants were most likely to succeed and stay long-term? It’s not magic or science fiction, and you don’t need a crystal ball. All you need is to add Sprockets’ automated candidate screening tool to your hiring process. It’s proven to improve 90-day employee retention, and it’s trusted by numerous top brands.

For example, a 15-location McDonald’s franchisee recently boosted their retention rate by 38% in just three months using Sprockets. Our software identified what made their current top performers tick and then uncovered which applicants shared key personality traits with them, scoring the applicants on a scale from one to ten. All the managers had to do was hire the top scorers and get back to business (with better crew members). Did we mention they achieved this drastic improvement in their workforce during the peak of the labor crisis?

McDonald's case study cover with a smiling employee