4 Ways to Use the 90-Day Rule and Improve Employee Retention Rates - Senior Executive
Employee Retention 5 min

4 Ways to Use the 90-Day Rule and Improve Employee Retention Rates

Making the most of new employees’ first 90 days on the job increases the likelihood of their sticking around for the long haul.

by Brian O'Connell on November 10, 2022

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  • The 90-Day Rule says that if you can keep a valued new hire for three months, the chances of that staffer staying for the long haul are stronger.

  • Detailing a formalized onboarding process with a 90-day timetable is critical for setting new employees up for success.

  • Regular check-ins and open communication with managers can also encourage employee engagement and retention.

To corporate executives, improving employee retention rates is akin to Ahab’s great white whale. It’s big, it’s powerful, yet if approached without a plan, poor retention practices can swallow an organization whole.

Studies show that replacing an employee is expensive. In fact, SHRM reports that it can cost up to six to nine months of pay for that role. For example, replacing a staffer making $60,000 annually can result in $30,000 to $45,000 in recruiting and training expenses.

One strategy companies are deploying to reduce turnover is the 90-Day Rule. Basically, it’s the theory among human-resource professionals that if you can keep a valued new hire for three months, the chances of that staffer staying for the long haul are stronger. 

“The first 90 days of an employee’s new job — whether they’ve joined a new company or been promoted — are critical,” says Bob Weiler, founding partner of leadership consultancy Brimstone, a division of recruiting firm ZRG, based in Camden, Maine. “The first impressions they make and the first impressions their leaders and company make on them, as well as the experiences they have, set the stage for their future with the company and in the job.”

There are myriad ways executives can shape their company’s retention practices around the 90-Day Rule. Here are four ideas to get you started:

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1. Outline a standard onboarding process.

Weiler explains how critical it is for employees in new jobs to have a disciplined process right up and through the 90-day timetable. Some issues that should be included: clarifying their roles and goals; detailing their responsibilities and accountabilities; and building relationships with new colleagues. They should also be collecting information and learning the business. New leaders, additionally, need to build and align their team.

“Our experience is that it’s critical for organizations to support employees in new jobs by helping them build a 90-day productivity plan,” he says. “That includes the process they’ll use during their transition, what goals need to be accomplished, and helping employees and managers stay conscious about how they communicate and act during this critical transition period.”

Companies also rely on process checklists when implementing the 90-day rule. For example, at VEM Medical, a product development services company with around 500 employees working in a hybrid environment, its to-do checklist is a centerpiece of onboarding. 

“We discovered and witnessed that a well-developed onboarding program for the first 90 days makes all the difference in the world in terms of engagement and retention,” says the company’s sales director Derrick Hathaway. “When new employees start, they have a lot of expectations and are excited, and a good program in the first few months helps them stay in the company.”

He says the VEM checklist includes the following items:

  • Immediately clarify job expectations.
  • Employee voices should be supported and amplified.
  • Recognize employees’ abilities and accomplishments.
  • Set a good example.
  • Plan weekly one-on-one meetings.

“Based on our unique needs, we could start having conversations with new staffers and help keep them motivated,” Hathaway says. “We leverage those conversations to know if they’re planning to leave or not, as well.”

2. Meet at milestones.

Schedule one-on-ones with new employees at their 30-, 60-, and 90-day calendar milestones. Additionally, it’s a good idea to regularly check in with your new hires to see how things are going for them.

“Being an available boss is key to retaining your staff, and welcoming them to share feedback about their work experience helps me improve the office in a way that benefits everyone,” says Angela Mangrum, founder and president of talent recruitment firm Mangrum Career Solutions, based in Cincinnati, Ohio.

Also encourage two-way feedback. Giving new hires a voice is one of the best ways to figure out any issues they’re facing. Mangrum recommends offering alternative ways to express themselves openly and honestly. “Leveraging apps like DirectSuggest that allow anonymous suggestions is another creative way of getting input from your new workers, even the intimidated ones,” she says.

Also be sure to respond to feedback you get. “Once you promptly address any problems voiced by a new employee, their likelihood of sticking around will automatically increase,” she adds. “It’s also essential to appreciate the good work they do and offer constructive criticism where you want them to improve.”

3. Buddy up.

Another strategy Mangrum likes is pairing up new hires with seasoned hands to get the best 90-day retention plan results. “This helps ensure that the new hire is formally introduced to the team and isn’t left out of non-work events, their questions are answered, and they have someone to turn to if they face any trouble with their jobs,” she says.

4. Pay cash.

Some big names are taking the direct approach, offering new team members cash bonuses for staying past the 90-day mark. Franchisees for McDonald’s, Wendy’s, and others advertise new-hire bonuses of hundreds of dollars, many payable after 90 days. CVS Health gives warehouse workers at some of its facilities a $1,000 bonus, if they stay on the job for three months.

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