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Can Quality Of Hire Really Be Measured?

Matt Charney
By Matt Charney
on July 18, 2018

Quality of Hire is one of the more traditional measurements of recruiting efficacy and hiring success, but while employers and recruiters have been trying to measure quality of hire for decades, the truth is, employers can’t agree on what “quality” even means, much less how to measure it in any meaningful sort of way.

This is because “quality” means something different to every employer, and to an extent, every hiring manager. This means that creating a standard, objective and structured definition for what ‘quality’ really looks like in a hire at your organization is a critical first step.

Quality of Hire: Settling the Scorecard.

Traditionally speaking, scorecards are a great way to structure and standardize both the criteria and analysis of what’s an inherently subjective topic across any enterprise employer; we might have a different “gut feeling” than other hiring stakeholders when assessing candidates, even on the same team.

Assigning candidates a relative “quality” score based on fixed criteria is a great way to not only make better hires, but also, better hiring decisions, too. Ratings can be assessed and individual & collective accuracy can be continuously improved at both the enterprise and line level.

By having statistical evidence on the correlation between candidate perceptions and on the job performance (or lack thereof), every hiring stakeholder receives quantitative feedback about how accurate their perceptions of different criteria have proven.

whykeep

Making hiring managers aware of their evaluation style and preferences through historical data is also a practical first step in eliminating unconscious bias through the interview process, too.

Of course, the balanced scorecard has been one of the top strategic management frameworks since the early 1990s, but when it comes to the business impact of people on organizational objectives, companies are still behind in adopting this proven, data driven methodology.

For example, Thomson Reuters adopted the balanced scorecard to predict candidate performance before an offer is even extended; this allowed the company to develop a proprietary model that measures how projected candidate output (individual productivity, personal business contribution) will impact specific business outcomes, such as increased revenue, decreased overhead costs or earnings per share. In 2 years of using the model for talent acquisition, the company has almost doubled their median annual revenue per employee. This is a business case that should resonate with any CFO out there.

Similarly, Apple utilizes a comprehensive biannual employee survey of its entire employee population, coupled with quarterly surveys of randomly selected or specific employee groups. This survey primarily covers how well employees understand the company’s strategy and whether or not their employee experience and responsibilities are consistent with that strategy.

Since implementing the survey, the results have led to Apple’s ability to predict how well a candidate will align their work with the company’s goals, vision and values and overall company culture by being able to correlate this survey data to specific scorecard criteria that’s a part of their core hiring process.

The fact that they’re the most profitable company in the world is a pretty darned good business case.

HIGHER QUALITY OF HIRE = BETTER EMPLOYEE, BETTER HR OUTCOMES.

quality

It’s pretty obvious, but almost every other success metric – hiring manager satisfaction, time-to-productivity, employee engagement and retention – are driven by making the best hire using the best data possible.

It’s no longer about going with your gut – it’s about knowing what you’re looking for and having a standard way to assess that talent based on data science instead of instinct.

Measuring quality of hire is difficult, and specific to every organization. Today, we don’t just ‘know quality when we see it.’

Top employers today actually know what quality looks like – and how to measure it, too, which makes it easy for TA to analyze their impact.

3 Better Quality Metrics Than Quality of Hire.

Simply, leading edge organizations are moving from qualifications to quality when considering candidates, which leads to a ton of measurable outcomes, including:

Net Promoter Score: Hiring managers are much more likely to be happy with their recruiting partner and recommend them or plan on using them in the future in situations when hiring situations are data driven, and follow an established, measurable framework.

enps

With an established benchmark, they never have to ask who else is out there – they know empirically whether or not the candidates they have meet the baseline criteria for a quality hire. That’s peace of mind every employer could use a piece of, honestly.

Retention: Already widely used as a way to measure quality of hire (48% of talent leaders look at this metric according to a recent report), retention doesn’t necessarily always equate to quality. Employee tenure has been shown to have the strongest statistical correlation with employees who feel like their contributions are appropriately valued and recognized, and that their individual efforts are a part of something bigger than themselves.

retention driver

Basically, employees who feel like their work matters and actually has an impact don’t leave companies – they tend to grow with them. Again, by implementing balanced scorecards, it’s relatively easy to look at historical turnover data, voluntary AND involuntary, and model the criteria scored during the hiring process based on characteristics of both your longest tenured and top performers.

If you’re constantly backfilling positions, you can never really look ahead at the future.

Internal mobility: According to a Career XRoads study of 4,000 global hiring leaders, even though internal candidates represented only around .5% of all applicants in 2017, that half a percent of applicants accounted for 50% of all interviews and 3 in 5 hires.

Yet, only 24% of companies (per Bersin by Deloitte) have a formal internal mobility program; almost half report theirs is ad-hoc, while another 20% have no internal mobility initiatives or programs at all. Start tracking the number of times your hires get promoted or move laterally within a company as a long term recruiting success metric – more important than tenure is how that tenure is spent. Potential is what gets you hired, but promotions are the proof that you were the right hire.

Another thing: 26% of new hires for skilled or exempt positions leave within the first year. This isn’t a bad thing – but the fact is, the reason most new employees leave early in their tenure is that they aren’t a fit for the company culture, followed by the company or job not meeting their expectations.

internal-mobility

Of course, with internal workers, these are moot points, pretty much – they’re a known entity, and so is your company.  The more variables you can eliminate in recruiting, the more standardized you can make measuring and managing the process and function, the better it’s going to be for you, your candidates and your clients.

This is easy when you’ve got the data to back you up. But if your metrics aren’t meaningful (e.g. activity metrics like number of outgoing phone calls a day aren’t actually correlated with conversion metrics, like how many appointments those calls created), then the only metric that really matters is 2.8.

That’s how many years the average recruiter lasts in a corporate job, well under the average 3.4 year tenure for US workers. The best way to stick around is, quite literally, to do the math.

It all adds up. Always. 

Furthermore, the same study showed organizations who conduct at least bi-annual strength based performance reviews or provide managers with team strength grids and collaborative action plans for leveraging those strengths are in a very small (but growing) minority of employers; however, these companies sit, on average, in the 97th percentile of all organizations.

Because no one wants average when they’re making a hire.

Especially not your current employees.

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Matt Charney
Written by Matt Charney
With a unique background that includes HR, blogging and social media, Matt Charney is a key influencer in recruiting and a self-described “kick-butt marketing and communications professional.” He serves as Chief Content Officer and Global Thought Leadership Head for Allegis Global Solutions. Matt also serves as partner and executive editor for Recruiting Daily. Matt's blog, Snark Attack, was named one of the top 15 business blogs officially recommended by WordPress, the only HR-related blog with that distinction. Recognized as an "HR Gamechanger" by HR Magazine, a "Analyst Superstar" by HRO Today and a "Top Recruiting Influencer" by Huffington Post, Glassdoor, LinkedIn and Forbes, Matt has also spoken about talent topics at events such as South by Southwest Interactive, BlackHat, Reconverse and DefCon. He also serves on the advisory boards of several HR tech startups, including Rolepoint, Universum Global, HiQ Labs, Textio, Clinch, AdRecruit, NextWave HR, TextRecruit, TrustSphere, and Human Predictions.

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