The notion or reality of quality of hire is a critical metric, but generally one undertaken poorly or not at all.
A journalist recently interviewed me on this topic, and asked me why quality of hire so hard to measure given that most organisations view metric as the most important, more so than cost of hire. My answer was that the task is not as difficult as thought, but does indeed require effort.
To truly understand this issue it is important to put it into the context of internal recruitment function evolution. Most recruitment functions move through three stages of evolution: Efficiency, Quality and Competitive Advantage. The reason that many organisations are now looking at quality of hire with renewed interest is that many have evolved through the ‘Efficiency’ stage where measuring cost of hire and time to hire was important. From my experience, I can always tell where a recruitment function is when the Recruitment Director makes statements like:
We are now at 95% direct hire
Thought -If you focus on recruiting every job internally can you really devote the time required to the critical position, undertaking talent management activities and measuring quality.
We have reduced the cost of hire for all positions to $920 ( this was a real statement) per position
Thought– This is a very good low cost of hire, but where to from here? Who really cares on a low figure if you cannot assure your CEO that you’re hiring productive and agile talent.
We have just moved recruitment into a shared services function
Thought– This process is all about creating efficiency through economies of scale, quality is not really a consideration here.
Please don’t get me wrong; if an organisation’s business drivers are based around efficiency, then these practices and measurements are fine. However, if your competition moves past this point to a point focusing on quality whilst you remain at a level of efficiency, then you will suffer a market disadvantage.
The ‘Quality’ phase in the evolution of a recruitment function involves the focus and measuring of:
- Quality of hire-calculating analytics on the performance of the candidates, understanding which managers are hiring quality candidates and benchmarking this data. Turning the recruitment, induction, and staff development process to gain repeatable quality outcomes.
- Quality of service – looking at the services given and received by all stakeholders including candidates, employees, hiring managers, recruitment agency partners, the C-suite and HR.
These measures must be both lead and lag and the reporting and metrics in the ‘Quality’ phase different greatly to those in the ‘Efficiency’ stage. Based on the HCMS best practice framework- which measures these stages- I would estimate that most of the top 200 companies in Australia are either in or close to, the ‘Quality’ stage of their evolution.
To measure quality of hire you need to have the following in place:
1) Segmented jobs or job families based on Criticality and Scarcity. Why?it enables you to focus your recruitment and analytics in areas that will add the greatest value to your organisation.
2) A integrated technology solution that includes recruitment and performance management as well as learning & development. Why? This means you can measure-over time- and identify who are your high performers, where they have come from and how they have been developed.
3) Competency framework providing an understanding of what represents high performance and behaviours, Why? This gives you a common framework and language to benchmark over the entire organisation.
4) Assessment primarily psychometric assessment that can be based on your understand of high performers that can be tuned over time. Why? You need an objective form of assessment that can be tuned as needed;
5) Analytics– A team or person dedicated to analysing data and providing relevant and timely reports, Why? If you can measure it, you can improve it
6) Diverse sourcing channels and the ability to leverage your social capital to engage candidates proactively. Why? You need to use sourcing channels that are relevant and dynamic
When I go through this list my clients, the typical responses I get are “I wish!” or ” In your dreams!”. In my experience, achieving these things is not as hard as many make out, but requires focus and direction.
Lets face it, if you want a productive quality workforce, you can’t leave it to chance or hope. Achieving this also requires the recruitment leadership to set direction, influence and gain investment for innovation and most importantly have the courage to make changes.
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