Resourcing Insight Blog

24 Jun Quality of Hire: Define, Measure, Report

These are the thoughts and takeaways from the latest Resourcing Think Tank (RTT), held on Tuesday 2nd of June 2015, hosted by AXA Insurance’s Marcelle Foxcroft (Head of Operational Resourcing) and titled Quality of Hire: Define, Measure, Report.

The following summary has been prepared to reflect a segment of the discussion held amongst senior Talent Acquisition professionals from leading national and international businesses. Specific company details, experiences and examples have been omitted from this summary as all discussions are held under ‘Chatham House Rules’.

Business Drivers

With many businesses’ Recruitment functions now operating in a much more commercially-focused manner, and with positive market growth contributing to unparalleled levels of competition for candidates, the question of ‘quality of hire’ has risen to the top of the agenda. Finding a cohesive, cost-effective strategy that results in simple, robust, and presentable data is the next critical project for many functions.

This drive is coming from both the Recruitment functions themselves as well as senior business leaders. Many Recruitment functions are rightly proud of their success to date in standard terms of source, cost, and time to hire and see ‘quality of hire’ as another means to demonstrate their ROI. In particular in disjointed organisations where accountability for the subsequent failure of the function’s hires is laid at Recruitment’s feet. Measuring ‘quality of hire’ is an excellent method for Recruitment and HR functions to provide tangible data that a candidate/employee is ‘worth’ the investment in hiring and developing them or not. For many business leaders it is about ensuring a cohesive and stable work force through today’s growth and beyond.

Challenges 

Data

There are a multitude of challenges to overcome; perhaps the most critical is the question of the data itself. A good place to start would be with the ‘why’ – ‘why is gathering this data important? What are we trying to show?’ There are at least two different mindsets:

  • To measure the health of the organisation, from a holistic standpoint.
  • To influence the business; to change the outlook on the Recruitment function and facilitate wider change.

Businesses can consider how they want to use the data, this feeds into discussions on how to measure, then how and who to present it to. This will necessarily change what data is tracked. It could be some, all, or none of exit feedback; on-boarding feedback; basic tenure; programs after 12 months; promotion after 24 months; employee scope survey data; even down to recruitment data like conversion rates (CV:iv through to promotion). Weighting of the various data points should also be a consideration.

Early attrition is a challenge to such measurements. Should hiring managers take responsibility for selection and retention past the point of hire? In some businesses Recruitment do the sourcing but have they got right information in the first place? It is Recruitment’s responsibility to make sure the relationships are such that they consult fully with the hiring manager population to define this information.

There are other necessary considerations to make:

  • How good is the data we have?
  • What data is needed?
  • How and where is the data captured?
  • Does the data fit the business model/unit?
  • Timescales for capturing the data

What works for one demographic or business area may not translate to others. With so many roles, requiring disparate skill sets how can you achieve any form of overarching measure? For instance there will be huge variations in appropriate data in project-led businesses/consultancies, sales vs. non-billing teams, and businesses with a high intake/turnover of graduates. For the latter it’s important not to lose focus on investing in measuring this population due to potential unreliability of data. After all, they are the mid-senior management of the future.

Adding to the selection process

Something for businesses to consider in a competitive market where one extra day can mean a candidate accepting an offer elsewhere.

Implementation costs 

The time frames for demonstrable ROI could be anywhere from 12-24 months (and longer), dependent on what data is being gathered and when.

Hiring manager/candidate attitudes 

Many hiring managers are still hiring ‘in their own likeness’ or to backfill a specific person when this may not address their team’s or the business’ actual needs. Tracking ‘quality of hire’ gives Recruitment another quantitative tool to outline why a candidate may not be right.

Many candidates still join the person rather than the company. There is a difference between a ‘manager’ and a ‘leader’ and the wrong levels of involvement for ‘managers’ in either of these categories can severely influence the hiring process and, subsequently, retention, skewing quality of hire data. The highest retention will often be found in areas of business with true ‘leaders’.

Organisations should also consider the motivations of the now notorious ‘Millennial’ population. Unlike previous generations, who had more predefined career goals and a desire for longevity, they actively seek change, gaining skills in different environments to arrive at their long-term path. These attitudes may skew skew multiple data points.

Disconnections in the organisation

  • Recruitment/HR – on a basic level, HR data is often required to be anonymous – in some businesses this isn’t centralised and Recruitment don’t have access
  • Recruitment/Hiring Managers Blame is often misappropriated for an unsuccessful hire. Often onto Recruitment for the process, or the candidate themselves if they fail. Hiring managers may be under pressure to get a body in, or be unfamiliar with the process and make a rash decision. Education and relationship building are critical.
  • Business/Candidate – A lot of current data can be too employer-centric and greater balance may be required. This is particularly relevant in businesses going through ‘cultural change’ programs; hiring new profiles to support this but ultimately not doing enough to keep them and ending up back at square one.

Best Practice 

With most businesses still at a formative point in planning, implementing, or gathering and  manipulating initial data on ‘quality of hire’, a gold standard has yet to be widely acknowledged. Below are listed some of the ideas that have delivered the best results to date, as well as those that might contribute to identifying and refining the most relevant data in the first place.

  • Liaising with a 3rd party supplier (eg. SHL) to produce a bespoke Talent Report. Scoring begins at interview stage and is benchmarked against historic hire/employee data. This can give any new hire an initial ‘talent rating’. This is added-to after 12 months (looking at retention/achievements/’promotion ready’ scoring from line manager etc). It is important that the suite of data tracked should be specific to the individual business, not externally benchmarked – parameters of success/failure are unique to both businesses and units/teams within them.
  • Ensuring there are enough data points: candidate/hiring manager surveys (on process), data compiled at on boarding (post process), after one month/post-probation/six months/12 months (dependent on the role – what and when are it’s delivery timescales), promotion/progression statistics.
  • If applicable to the HR model, closer alignment between Recruitment and Talent/L&D functions. Moving away from a transactional model – Recruitment shouldn’t stop on the start date. Sharing of employee data across systems and joint strategising on appropriate toolkits to up-skill hiring manager populations and universal agreement on ‘what is talent’ for the business. Greater involvement in internal mobility and pooling data from that; not just analysing external hire data
  • Up-skilling hiring managers, not only on process but on analysing specific skills gaps on their teams (instead of hiring just to backfill). Consulting to produce vacancy-specific job descriptions is a good start. This could feed into recording line manager recruitment capability data/scoring and gradually divesting more responsibility to that population for hiring/success of hiring. All hiring managers are technically talent managers; it should be a joint responsibility.
  • Focusing on potential – hiring the person not the CV. For instance, hiring at a junior level, with robust succession planning in place, to grow them in the business. Developing standardised behavioural matrices for assessment; knowing what a hiring manager is looking for is all well and good but they need the tools to analyse this ‘in the room’.
  • Greater honesty between the business/Recruitment and candidates. Turning candidate/new-starter feedback into tangible data is key. Perhaps removing hiring managers from the experienced hire process? In many instances graduates don’t meet their ultimate managers and internal careers are increasingly defined by official development plans rather than who you work for. Increased clarity on career potential and the measurements that determine ‘success’ should result in greater engagement and, subsequently, lower turnover – making the data itself less complex.

Measuring Success 

As outlined so far, such initiatives are still very much in their infancy and as such measuring their success is an ever-evolving process. With it taking anywhere from 12-24 months (or longer) for usable data to emerge, even rolled-out schemes should be subject to continuous and rigorous review to produce the best possible results.

Given the many disparate challenges that feed into this subject it is worth questioning from the offset what the underlying issue is within your business and factoring that into any measurement approach. Is it a question of ‘quality of hire’, ‘quality of recruitment’, or, from a candidate perspective, ’quality of employer’?

As a closing thought, perhaps it’s worth considering how we position such a scheme? ‘Suitability (i.e. best-fit) of hire’ rather than ‘quality of hire’. This subtle change of nomenclature transfers the onus onto the organisation itself; can a candidate perform to the best of ability and how can the business align itself to give confidence of this throughout the hiring process. What can the business do to make the right person, at the point of hire, stay, rather than the other way around?

This thinking could offer help in positioning to candidates, particularly in today’s increasingly competitive market; making their drivers of paramount importance. A good cultural fit is a key contributor to success. However, this should be suitability to the specific role in question, not just to the hiring manager, and businesses must be wary of any ‘cultural fit’ measures becoming merely another tick box in the process.

By adapting current thinking in such a way as to meet candidates somewhere in the middle, an organisation may well be in a better situation to devise and implement a process to track and report on this critical issue.

To find out more about the Think Tank Quality of Hire: Define, Measure, Report:

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