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What Is Your Hiring Batting Average?
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I am an unabashed follower of the HR philosophy of Jack Welch, former CEO of GE. He is a proponent of a “business-like” approach to HR that emphasizes its critical role in impacting organizational results. Welch is certainly controversial in HR circles because he advocates many things that “softies” in HR regale against, including differentiation in treatment, honest and direct performance appraisals, stretch assignments, and yes, routine firing of individuals who don’t produce or fit the system.
His latest foray into HR deals with measuring your “hiring batting average.” By advocating the direct measurement of hiring quality, he adds even more credibility to counter the “silly” list of arguments that many in recruiting make against measuring quality of hire.
His support of using a quality of hire measurement is not unique among CEOs. In fact, Nick Burkholder, founder of Staffing.org, notes how “CEOs are interested in all performance metrics, but especially new hire quality!”
There is literally nothing more important in recruiting than measuring the “on-the-job performance” (quality of hire) of the individuals you bring into your organization. Many directors of recruiting try to avoid this measurement by shifting the focus to less political, simpler measures like cost, time to fill, or volume.
In this light, some argue that they “filled every position,” but then again, so did the Titanic. They argue that they hired people at a significant cost savings, a claim almost as insightful as “I got this Rolex for only $25.”
There are literally dozens of performance phrases that are uttered by recruiting leaders, but few sound like “We produced 112% of planned hires whose combined performance to date exceeds that of planned hires last year by 43%. Hires were accomplished leveraging an investment just 3% greater than last year’s, with no gains in recruiting headcount. Manager satisfaction with new hires this term is up 27% to a 4.1 on a 5.0 scale.”
When asked why quality of hire isn’t routinely measured, I hear dozens of excuses that typically fall into four basic categories:
Jack and Suzy Welch, in their August 20 BusinessWeek column, argue that managers and individuals involved in the hiring process should be held accountable for their hiring recommendations. The process they recommend involves simply comparing an individual’s “hire” or “not hire” recommendations with the new hire’s actual on-the-job performance rating after six months.
The performance of the new hire is measured simply on whether the new hire’s “on the job performance” was rated as below expectations, meeting expectations, or exceeding expectations.
A numerical batting average score of between .001 and .999 is assigned to each person involved in making hiring recommendations and a .800 average means that 80% of those recommended met or exceeded expectations. Consider weighting hires who exceed expectations. This hiring batting average is simple, quantifiable, and it ensures some level of accountability.
If you are taking a broader perspective and are looking at the entire hiring process throughout your organization, consider adding other “pre-hire” factors like identifying which source, which assessment process, which selling points, and which individuals had the most impact on hiring individuals who became top producers on the job.
Add other measures of post-hire success beyond a manager’s subjective assessment of the new hire’s on-the-job performance. If an individual must be terminated or if they voluntarily quit within the first year, they cannot be considered a “quality” hire.
On the positive side, consider an increase in diversity hiring into your professional and managerial positions as an important indication that you have a high-quality hiring process.
At the end of each recruiting period, recruiting management needs to determine whether their organization’s hiring process has produced better results than last period’s or the efforts of a previous year. Before you can make an accurate comparison, you must first make a list of all of the possible new hire outcomes.
Actual Output Measures:
Assessments by Managers and Employees:
Pay, Rewards, and Recognition:
Qualitative Measures of Performance:
Indications of Innovation:
Indications of Leadership and Team Players:
Softer Indications of Performance:
The creator or owner of any business process is responsible for measuring the quality and the performance of that process. Just as CIOs measure the performance of software and hardware they select, and directors of marketing measure the performance of PR and marketing plans, directors of recruiting must quantify and measure the performance of their selection process.
Whether you choose a relatively simple approach like Jack Welch’s “hiring batting average” or choose to institute a more sophisticated approach, the key is to do something right away and then refine the approach over time.
Even though “efficiency metrics” like volume, speed, and cost have some value, process “effectiveness metrics” (i.e., measuring the impact of the hiring process on business results) is the one and only measure that sends a clear message to senior management that recruiting is strategic and businesslike.
Now, if you want to do something that is hard to do, sit with your CFO and convert the results of superior recruiting into its dollar impact on corporate revenue. But that’s another article.