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Measuring the Quality of Your Hires

Written by: Dr. Fathi El-Nadi

Article Overview: Most employment managers measure success in the wrong way. Looking at the cost of a hire, the number or even the speed of the hire is at best misleading and at worst an inaccurate measure of hiring success. The primary (or perhaps sole) measure of hiring success should be the quality/performance of the hire.

Measuring the Quality of Your Hires

Unfortunately many employment managers can't seem to figure out how to measure the quality of a hire. So here it is...The definitive list of possible ways to measure the quality of any hire. Most of the measures fall into 5 categories:

Output and performance of the hire Subjective assessment by managers and others %of qualifications met Compensation and promotional rewards given the hire retention rates of top performers
Of course when you are measuring the quality of hire you do not need to use all of these measures. What I do recommend is that you "triangulate" and get 3 - 5 independent assessments to ensure initial accuracy. Firms usually start with a longer list (6 - 10) and pare it down based on discussions with managers and the CFO. Over time usually no more than 5 measures (that are combined into a single index based on cost, accuracy, ease of assessment, and "face validity") need to be used.

A LIST OF POSSIBLE QUALITY OF HIRE MEASURES
As a general rule the more powerful measures are listed first in each section. Results and output measures are always superior to other assessments.

Immediate Measures (on day of hire)


1.Did the actual hire's resume rank in the to 25% (did it receive an A or A+) when the initial resumes were assessed/ranked?


2.% of qualifications on final job description that this candidate met (including number of years of experience and education the hire has compared to the req. and other recent hires).


3.When the initial finalist for the job were forced ranked after interviews but prior to an offer, what rank was the actual hire among those finalists?


4.Did the actual hire also get offers from other top ranked recruiting competitors? (asked on first day)


5.Managers prediction of the quality of hire (based on a subjective comparison against other recent hires). What percentile do they forecast their performance level to be at?


6.Manager forced ranking comparison of this candidate compared to other recent hires.


7.Manager satisfaction with the hiring process (responsiveness, cost, time, etc.).


8.Surveys of new hire satisfaction on how they were treated during the hiring process by the recruiter, this year compared to last year.


9.Surveys of new hire satisfaction on how they were treated during the hiring process by the hiring manager, this year compared to last year.


10.Time from initial contact about this job to hire date.


11.Satisfaction of the other finalists (that were not selected) with the hiring process.

Intermediate Measures (up to 6 months)


12.Output, production (quality and quantity) compared to other recent hires and the all employee average after 1 month and at 6 months (Ex. Productivity, output, sales volume, % of projects completed, customer satisfaction scores, etc.).


13.Manager subjective assessment of performance of the hire after 1 month and at 6 months.


14.Team and co-worker subjective assessment of performance of the hire after 1 month and at 6 months.


15.Time to productivity (# of days until the minimum expected output level is reached for a new hire).


16.How well new hires do on any required testing, certifications or training, this year compared to last.


17.Satisfaction of the new hire after 1 month.

Longer Term Assessment (over 1 year)


1.Output and results (quality and quantity) compared to other recent hires and the all employee average after one year (Ex. Productivity, output, sales volume, % of projects completed, customer satisfaction scores etc.).


2.Manager assessment of performance of the hire at their 1 yr. performance evaluation.


3.Year end surveys of all hiring managers on satisfaction with the recruiting process this year, compared to last year.


4.Retention - The % of above average performers that are still with the firm (exclude terminations) after 1 year (this year compared to last be sure to adjust for any "inflation" in overall industry retention rates).


5.Customer 360 feedback or complaints, satisfaction or other outside assessment.


6.Co-worker and team 360 (or forced ranking) of new hires (this year compared to last).


7.Managers' forced ranking of this hire compared to others in the same job.


8.Average performance appraisal (or forced ranking score) of this year's hires vs. last year's hires.


9.% stock grants compared to other recent hires and all employees.


10.Number and $ value of any "spot" and year end bonus (as a % of salary) compared to other hires and all employees.


11.More nominations/awards compared to other hires and all employees.


12.More salary increases compared to other hires and all employees.


13.The number of months until they are promoted or receive a grade increase (with a lower number being better) compared to other hires and all employees.


14.More lateral transfers compared to other hires and all employees.


15.Patents/Ideas compared to other hires and all employees.


16Cost of their salary - How do the starting salaries (adjusted for inflation) for this year's hires compare to last years for employees rated at the same level of performance.

17.Over-all Assessment of the Quality of our Workforce


18.Revenue per employee compared to our direct competitors as a "mirror" of the quality of your people.


19.Dollar of profit per dollar spent on people costs (this year to last and compared to our direct competitors).


20.Survey of local recruiters and executive search professionals on how we rank in quality of recruiting and hires (survey conducted by HR advertising firms or market research firms).
Conclusion


Now that you know the quality of your hires the next steps are to identify:

1.The source they came from (so you can drop the "useless" ones).


2.The factors in the selection process that gave them high and low scores (so that you can drop the measures that don't predict success).


3.The recruiters/managers/employees that found them (so you can reward them as well as to use them again).


4.Change the reward system for managers and recruiters so that the quality of the hire is the main focus.

Don't be surprised when many of the traditional things that you used to recruit (job fairs, newspaper ads) and screen (references and interviews) don't add much value. Now drop all of those "silly" cost of hire metrics, stop feeling good when you "fill req's" with "butts in chairs" and focus on bringing in better people!

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