Measure Quality of Hire With These Three Critical Factors

Measure Quality of Hire With These Three Critical FactorsThis post is part of our Data-Driven Talent Acquisition Strategies series

One of the most valuable performance metrics for recruitment is the quality of each hire made. However, most talent leaders believe they aren’t measuring quality of hire effectively. According to LinkedIn’s 2016 Global Recruiting survey, only 33% of respondents feel that their methodologies are strong, and even smaller, 5% felt “best in class.”

Talent Acquisition analytics are a credible way to measure quality of hire, provided you know the right measures to monitor and you look beyond the data in your ATS.

A Fortune 1000 organization hired a third-party assessment consultant to rate job candidates using a scoring process that promised to identify which candidates would stay and perform well long-term. However, when these scores were applied to employees once they started working, the organization learned that so-called “high scoring” candidates (who were hired!) were actually the people leaving the company the fastest. It was only when post-hire data was analyzed that quality of hire could be more accurately assessed.

According to Mollie Lombardi, CEO of Aptitude Research Partners:

The ability to integrate hiring data with individual and team performance data, as well as with other talent management data, is an incredibly important element to understanding whether or not you are getting real value from your new hires.”

In order for the pre-hire data in your ATS to be useful, a complete picture of the employee lifecycle is need. You must first look at post-hire data on high performers in your organization, specifically those related to whether these people Stay, Perform, and Progress.

These three factors provide the critical insights you need to determine what a quality hire means at your organization, so that when you go into your ATS to assess candidates, you’ll have a more reliable way of selecting the ones that will perform well at your organization long-term.

Let’s look at these three critical factors in more depth.

Data visualization showing what are the key attributes of top talent software developers

1. Stay: How long did the hire stay at the organization?

For an employee to be considered a quality hire, he or she should return more value to the business than was used to source, train, and develop them. It takes time for true value — the kind that makes a solid impact on business objectives — to be created, which is why tenure is the first measure of quality.

The longer an employee is with the organization, the more time they have to contribute to value creation, such as sales or customer satisfaction, and therefore, exceed the investment the business first made when they were hired.

On a very basic level, if it costs more to recruit and hire someone than the value returned by that individual when they’re employed with you, then the hire should not be considered to meet the foundational criteria for quality.

If it cost a bakery more to source flour than it made from selling bread, it would soon be out of business! Similarly, the minimum bar for assessing quality is that the value delivered by the employee exceeds the investment in their acquisition.

[Recommended Read: 5 Benefits of a Data-Driven Recruitment Strategy]

However, the ways in which employees deliver value is varied and complex. In some call center situations, an employee can be fully competent in days, and have covered their acquisition costs in weeks. In certain high tech situations, the payback period could run into months. Or, for a Sales Executive joining an Enterprise Software firm, the payback period may be as long as a year or more. It is common to use 90 days (the typical probationary period) as a measurement time frame in these cases.

2. Perform: What is the hire’s performance like?

If spending time to deliver value is the foundational criteria, then the next critical factor is the quality of the work done in that time. Remember: the purpose of assessing hire quality is to determine whether or not the people being added to the business are increasing the capacity to create value. Hence, the next key factor is the performance level of the new hires.

Simply put, a quality hire is a high performing hire. Strong performers make the difference between hitting business objectives and missing them.

Human performance is varied and assessment needs to take place over time. Therefore, in assessing the quality of a hire, their ability to meet or exceed performance expectations should happen regularly.

For this reason some organizations include multiple assessments of performance during the employee’s first year and as part of the onboarding process. In addition to keeping the new employee on track, this provides a valuable source of data in assessing quality.

There is an unbreakable link between the organization’s processes and the ability to measure important results. Without any form of performance assessment it is not possible to properly assess the quality of a hire.

Whether the assessment is focused on the first two years of an employee’s tenure in order to determine if your recruitment strategies are bringing in people who can create value, or if the view is longer term and focused on understanding whether the organization is able to retain these people and increase their capacity to deliver value — without the right processes, and supporting data, these types of critical insights are not possible.

Workforce analytics dashboard showing which employees are most at risk for resigning in the next 18 months

3. Progress: Did the new hire progress through their role or move to a higher position? How long did it take?

The final and most significant measure of hire quality is whether or not the new hire is able to progress up the organization. A promotion to a more complex role is a clear sign that the person who was hired is aligned to the organization’s value creation needs. However, even intra-role progression, such as being trusted with more complex work or a higher volume of work, shows the type of progress that is an indicator of hiring quality.

[Recommended Read: Overcoming the Manager Divide: How HR can Accelerate the Path to Gender Pay Equity]

One caveat is that progression within role is often expected and therefore, when it comes to assessing how progression contributes to quality, it is the relative speed of progression that is most important. For example, if an individual moves forward faster than average they should be seen as a higher quality of hire.

However, the relative speed of the progression is the most differentiating factor — and also hardest to measure.

In addition, if a new hire does not get promoted it is by no means an indication that they were low quality. Every organization needs solid performers who are content to consistently deliver in their role.

Understanding the extent to which the rate of progression distinguishes a good hire from an exceptional hire requires a detailed understanding of the organization and its specific roles, and the application of robust data science to turn this into an appropriate measurement model.

Data visualization on what roles have developed into financial analyst over time

Using Talent Acquisition Analytics to Measure Quality of Hire

Now that you know what the Stay, Perform, and Progress measures are about, you can use analytics to examine the data related to each one:

  • Your goal is to find out which individuals have stayed the longest, performed the best, and progressed quickly through the organization — this data will reveal who are your top performers.
  • Once you’ve identified these employees, run another analysis to determine what attributes they have in common. Is it their prior experience? Is it their manager? Are they on a team with other high performing individuals? Did they receive more onboarding or less training than others?
  • Compile these attributes together and combine it with data from your ATS or candidate CRM. Compare these attributes to the job candidates in your slate and use it to find the next superstar for your organization.

Keep in mind that all this information is contained within disparate systems, which makes doing this by hand on spreadsheets or relying on the analytics included with your HRMS a costly, risky and time-consuming venture.

If finding out quality of hire attributes is truly important to your Talent Acquisition team, consider investing in a workforce intelligence solution. This technology connects all your data systems together in one place and makes analyzing the information as easy as selecting the relevant question from a preloaded list.

To help you understand what other actions your team can take to improve quality of hire, check out the post 4 C’s of Quality Hire by Mollie Lombardi.

What Your ATS Isn't Telling You

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Ian Cook |

Curious about the differences between gaussian and pareto distribution? Ask Ian. Want to know what it’s like to kite ski North of the Arctic Circle? Ask Ian. Not only is he an expert in statistical analysis and HR metrics, he’s also an avid cyclist, skier and runner. At Visier, Ian helps customers drive organizational change through linking workforce analysis to business outcomes. He is responsible for the workforce domain expertise within the Visier solutions.

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