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Trying to find the right way to communicate the success of your talent acquisition strategy can be an uphill battle. It’s one that is becoming more and more important as there are mixed messages about the health of the hiring industry.
On one end of the spectrum, job creation appears to be up, with over 350,000 new jobs reported in January. On the other end of the spectrum, the tech industry has been hit hard by job cuts, with more than 30,000 announced since the beginning of this year alone.
With such a volatile market, recruiting leaders are working to both prove their worth and think strategically about workforce needs in their organization, and that means identifying meaningful metrics to share with the business.
Historically, leaders have leaned on lag measures — time to fill, cost per hire, candidate funnel, sourcing channels. But while these can show you some efficiency measures, they lack the ability to measure your effectiveness as a team.
That’s where the elusive quality of hire metric comes in.
Talk to any recruiting pundit and they will tell you that your metrics mean nothing unless you look at quality of hire. You need to know that the new employees are good employees, that they’re adding value instead of causing trouble. Quality of hire (or QoH, if you want to be fancy) should be the cornerstone of every scorecard and will dramatically improve the business.
The problem is that nobody can really tell you what QoH is. And that’s the crux of the issue.
If QoH were so easy to report on, we wouldn’t be having this discussion. Everyone would add it to their dashboard and call it good. But there are some inherent challenges with landing on a good QoH.
Subjectivity. “Quality” is one of those squishy terms, like “friendly,” “approachable,” or “pornography.” What I mean to say is that you might not be able to define it, but you know it when you see it. But how you see quality in your organization may be vastly different from how other leaders see it. Or other organizations. The lack of a universal definition is a plague to most benchmarks, and QoH is no different.
Lag in performance measures. Let’s say you decide to use performance as the cornerstone of your QoH. But what’s the right time frame for those measures? Is it the same for every role? Do you allow for a learning curve? All of this takes time to track, and by the time you have the information you need, it might be too late.
Data accuracy. Nearly every organization suffers from some level of mistrust with their data, some more than others. If QoH is poised to become a major KPI for your recruiting strategy, you better be sure those measures are accurate. Are you willing to risk your reputation on your data?
External factors (the team, the company, etc.). Because of the inherent subjectivity for QoH, there will always be factors for which you cannot 100% control. It might be that the manager of the new hire is not a good leader. It could be the department lost three of its six team members and everyone is carrying triple duty. It could be that the company’s industry is in the tank. Whatever these factors are, it can impact your QoH metric.
As tempting as it might be simply to pretend you’ve never heard of QoH, I wouldn’t advise pretending it doesn’t exist. New employees are an investment in your future. It’s expensive to source, recruit, and hire people, so you want to be sure that your strategy and process are having the expected impact.
Where I typically see people make mistakes with QoH is in assuming it’s just one thing you measure. QoH is a true KPI, a key performance indicator that combines various measures to report back on the performance of a group or process. To get the most out of your QoH efforts, try the following steps:
Define “quality” for your organization. Lean into the subjectivity. It’s OK to not have a universal definition of quality that aligns with every other company, but you need an agreed-upon definition for your organization. It’s the only way you’ll be able to determine which data you need to include in your measure.
Prioritize which data indicates movement toward that definition. Not all data is equally important. If you’ve got data scientists on staff, do some analysis with your incumbents to see which factors impact your definition of quality. It could be time to competence, periodic training scores, turnover during a certain time period (e.g., within the first 30-60 days), or other performance measures.
Establish a reliable data intake process. If it takes someone three full days to get you the data you need to measure QoH, it’s not a good measure. It might be good information, but the effort will not be worth it. Find ways to automate your data intake so you can rely on the information you’re analyzing.
Be willing to revisit your definition. Like all measures, it’s important that you verify that the intended meaning is accurate. Maybe you thought time to competence was a home run, but really, after analyzing the data, you learn that completion time for pre-hire activities is a better predictor of QoH (it can happen). KPIs should never be a “set it and forget it” activity. You need to revisit it on a regular basis.
No matter what you use for your quality of hire measure, it’s important to be realistic. No one measure is going to tell you everything you need to know about your strategy; however, a whole bunch of measures used together to tell a story will certainly indicate if you’re headed in the right direction.
Do you agree? Disagree? What did I miss? Join me as I moderate a panel at the ERE Recruiting Conference, May 14-16 in Austin, TX, and online, where we will discuss quality of hire and other recruiting metrics.