Performance metrics are important for all company departments and positions. The right goals keep employees motivated and the organization successful: sales professionals have revenue quotas, marketers need to bring in a certain number of quality leads, account managers have upsell and renewal goals — the list goes on.
Talent-acquisition teams are no exception to this rule. They’ve been held accountable for several performance indicators, including time to fill, offer acceptance rate, diversity hiring, and cost per hire. However, these are reactive rather than proactive KPIs, and understandably so. Historically, in order to measure the success of acquiring candidates, recruiters only had access to when they posted a new job and the time it took to fill that role. It was a race against time — who could bring in workers the fastest? Until now.
Quality of hire has always been the holy grail of metrics, but it has been difficult to measure because traditionally we thought about it as how a candidate performs during their first year of employment. The recruiter can bring in the best and most engaged candidate, but factors like onboarding, manager relationship, team dynamic, or changes in the organization can negatively impact the new hire’s performance. It’s time to rethink quality of hire.
There are two parts to this metric: quality of the candidates hired, and the quality of the new employee’s first year. The latter should be called “Quality of First Year Performance” and should be measured by things like performance ratings, percentage of merit increase, and percentage of bonus attainment.
With this new perspective, quality of the candidates hired can rest squarely on the shoulders of the recruiter. They are responsible for creating, engaging, and nurturing the talent pool from which the candidate was hired. It always feels like a Yahtzee win when the candidate is not only interested and readily available for the position, but also the perfect culture fit and an outstanding performer.
It’s time we start thinking about the quality of hire as essential in sourcing and hiring for a successful organization, one where all parties within the talent experience are satisfied with the new employee from recruiter and hiring manager to the CHRO level and beyond.
When a candidate is the perfect fit, everything else falls into place. Companies with engaged and happy employees experience three crucial factors that fuel the organization’s success: higher morale, higher retention, and increased productivity.
Candidates who are eager to work for a company bring a positive energy that stimulates other teammates. This energy is contagious. The right hire can influence others to enjoy their work, feel more connected to their teams, and have a more positive outlook when experiencing setbacks. When employees genuinely enjoy coming to work, the company sees lower turnover and higher productivity. According to Gallup, businesses with engaged employees experience 21 percent more productivity than those with unhappy employees.
Quality of hire is not overlooked in the sourcing and hiring process, but the true assessment of the candidate’s work potential traditionally comes after they start the job. Will they get along with their coworkers? Communicate effectively? Pioneer new projects? Work efficiently? These answers are usually revealed within the first few months after being hired. When a candidate doesn’t fit, productivity stalls and negativity spreads.
But recruiters have more data at their disposal. They can use it to better forecast how well their candidates will perform. Engagement and fit scores are the keys to getting the right talent in the door. Previously, these metrics did not exist. With only a resume and cover letter, talent scouts could not predict how engaged a candidate was with the company; they couldn’t see if the candidates applied without careful consideration that indicates that they would be enthusiastic to be hired. Observing job-seeker habits and interests, and thus fit scoring, is now a factor in modern recruitment. You can track candidate activity, which suggests how interested the candidate is in the employer’s EVP and culture.
The next time you evaluate yourself and your team, hold them accountable for quality of hire more than any other criteria. Quality of hire is not just another KPI recruiters should be measured on, but the only KPI that really matters. It drives how your company is going to evolve and improve their product, drive revenue, and increase shareholder value all starting with the candidate. Better candidates lead to better teams and better success for the organization.