Quality of hire is literally the highest impact TA action. Fortunately, one approach that doesn’t require any math. Yes, of all the possible strategic actions that a recruiting leader can take; measuring and utilizing quality of hire data is the most impactful. Simply because applying it can directly improve the most important output of the recruiting function. And that output is a high percentage of new hires that are rated as “performers.”
Identifying New Hire Success Factors are Literally A Game Changer
Yes, the Holy Grail of recruiting is measuring the quality of new hires. Nothing else even comes close in its impact on improving recruiting results. Being able to separate quality hires that are performers allows you to identify their underlying success factors. Then, knowing these success factors will eventually help you to understand “what works” and “what doesn’t work” in recruiting. For example, you would increase the importance of having certifications after you found out that 80% of performing new hires have a certification. While in direct contrast, only 10% of weak performers (those that you wouldn’t rehire) had it. Knowing these success factors can allow you to modify your recruiting sources and assessment approaches to maximize increases in new hire on-the-job performance. This final quality of hire metric would be labeled as “the percentage of all hires that were performers.” And practically that would mean “the percentage of all hires that would be rehired because they were labeled by their manager as performers (e.g. 61% of the new hires were performers).”
Drop The Word Quality and Instead Substitute The Word Performance
The first step requires a bit of a name change once you realize that quality of hire is a phrase that quickly raises negative emotions. But also because knowing what the word “quality” actually means is unfortunately uncommon within HR. So it makes sense to avoid all of the baggage around the word “quality” and begin replacing the phrase “quality of hire” with the easier to understand phrase, the “performance of new hires.” Because that new name will help you to maintain a focus on what you are attempting to measure, how well new hires perform.
Measuring The “On-The-Job Performance of New Hires” Made Easy
Next, try to put all of your anxiety around math behind you and learn that there is a “no math required” method for assessing new hire performance. I call this simplified approach the “Would You Rehire Them” method (WYRT). Because the method only requires that you ask hiring managers a single “Would you rehire them?” question.
And that question is:
Yes or no, – “Based on their performance during six months on your team, would you rehire this person without hesitation (instead of reviewing other candidates?)” Based on this question, the definition of a quality hire and “a performer” would be any recent hire that a manager would rehire without hesitation because of their performance.
The “Would You Rehire Them” Approach Resolves Most Quality of Hire Issues
Let me highlight a few of the reasons how this WYRT method avoids or minimizes the traditional fears that arise almost any time that the idea of measuring the quality of hire comes up.
- It avoids any fear of math – many in recruiting have a fear of math and they don’t want to learn any more of it. So even though most believe that quality of hire requires sophisticated math, the simple WYRT method only requires the manager to provide a simple yes or no answer to a rehire question.
- It doesn’t require a detailed definition of quality – because the traditional metric is a qualitative measure, most quickly realize that quality in almost any area is hard to define and measure. However, when you define quality as a binary choice (yes or no to the rehire question) you make the fact that the employees would be rehired without hesitation the organization’s simple but precise definition of a quality hire and a performer.
- There is no need to measure quantified new hire on-the-job performance – the quantified performance of new hires (a.k.a. quality of hire) is a key component of traditional quality of hire measures. However, in practice, the direct measure of on-the-job performance becomes a major roadblock because you can’t measure the quality of hire until those performance measures are fully implemented. There is also some resistance because revealing that you have failed to measure on the job performance can be an embarrassment to HR. Fortunately, under the WYRT method, a manager’s judgment acknowledging that the employee would be rehired (based on their performance) becomes the only performance assessment measure that is needed. Because by the six-month mark, if the employee had performance, early turnover, or firing issues, it is clear to executives that most managers simply wouldn’t be willing to rehire them without hesitation.
- This WYRT measure of quality is cheap and quick – the most widely used and difficult to calculate recruiting metric is the cost per hire. However, because it doesn’t drive action, you should stop calculating it. And instead, focus your metric time and energy on the WYRT quality measure. Because it is the highest impact metric in recruiting!
- Data quality is not an issue – because, under the WYRT method, all the data required to determine the quality of hire is controlled by HR. And as a result, most of the common HR data quality and availability issues are eliminated. Because you administer the WYRT survey yourself, you control the data. And if you survey every manager that has had a recent hire, there are no sample size issues. The only remaining data issue is the completion rate, and since the quality/performance of hire is only presented as a percentage of all hires, any psychology intern can do the calculations. And with only one data point, you can store and manipulate the data easily on a single spreadsheet.
- Explaining the metric is easy – most traditional quality of hire measures involve multiple calculations and a complex formula. And as a result, the metric is hard to explain to recruiters, managers, and executives. Fortunately, similar yes or no qualitative questions are already used in customer service and marketing research (“Will you return?”, “Would you buy again?”, or “Would you recommend us to a friend?”) So managers can quickly understand the value and accuracy of using only a single qualitative question to assess quality. Incidentally, one survey found that, if given a chance, managers would not rehire 39% of recent hires (Source: IBM research).
- A single quality of hire issue remains – there is, unfortunately, one metric issue that remains. And that is once you measure and report the quality/performance of recruiting’s output, everyone will instantly know who has a low hiring success rate. And revealing this negative information will embarrass those recruiters with a low success rate. However, despite the short-term turmoil related to publicizing individual and functional failures, overall this information will eventually directly lead to an improvement in the performance of new-hires.
Additional Tips For The “Would You Rehire Them” Method
After recommending this WYRT approach to numerous firms over the years. I have identified a few tips to guide your implementation actions.
- Prioritize your jobs – start by prioritizing your jobs. And then, at least initially, only ask the WYRT question to hiring managers for the most impactful jobs. If the number of new hires is too large, you can then use sampling techniques, so that you don’t have to gather the information on every new-hire.
- In most cases an email survey will be sufficient – in smaller organizations, you can, of course, ask the rehire question in person. However, an email request will perform just as well. Provided that you use the right subject line (i.e. your feedback is required and it only takes two minutes). Also, make sure that you have a strong follow-up process to ensure a reasonable participation rate. If however, you have low participation from an individual manager, simply refuse to help them recruit for new positions until they give feedback on this previous hire.
- The wording of the rehire question should be pretested – be sure and pretest your rehire question with a sample of hiring managers, to make sure that it is crystal clear. Here’s a version that I recommend.
- Introduction – “To gain a big picture view of whether managers are satisfied with their recent new-hires, we need you to answer a single survey question.”
- Question – “Based on what you know now about Joe Smith’s performance (and assuming that early turnover or firing would disqualify them from re-hiring) would you without hesitation choose to hire Mr. Smith again (as opposed to seeking other candidates)?” Positively answering the rehire question would classify Mr. Smith as a performer.
- Use your quality of hire results to determine which factors predict performance and which ones don’t – once you have established that you have top-performing hires in each job family, you must then go back and identify performance factors using correlations. What hiring process factors did the top-performing hires have in common? Which factors did the poor performing hires not have? (i.e. selection criteria, sources, hiring managers, the recruiter, interview questions, references, etc.) Next, you would want to reuse the factors that best predicted new hire performance, and/or fix or abandon the factors that didn’t predict on-the-job success.
- Realize a quality measure is required if you’re implementing advanced HR technology – it is important to realize upfront that any technology that uses machine learning simply will not be able to operate without a baseline quality of hire measure to learn from. And this means that in the future for most large firms, technology will force the measuring of the quality of hire to become an absolute necessity.
- Supplemental quality assessments to consider – incidentally, if you need precise performance numbers for some reason. You can ask the hiring manager to also rate “performers” on a 10 point scale. Alternatively, you can use numerical performance appraisal ratings after six months on the job. But be careful because these PA ratings are often extremely subjective.
Although I have been referred to as the father of HR metrics, I almost universally disagree with the metric approaches taken by most corporate recruiting functions. They almost universally always focus on transactional metrics like cost per hire and time-to-fill. While they are too easily convinced to completely avoid the one critical recruiting output. Which is, “how well do your organization’s new-hires perform on the job?” And with this benchmark baseline measure, you can then easily determine which recruiting sources and tools best screen out those that won’t end up being top-performers. Fortunately, this WYRT approach has another advantage, which is that it’s quick and doesn’t require any upfront investment.
Incidentally, if you do have some extra time, the next highest impact metric to focus on is “recruiting’s dollar impact.” It can be calculated with the help of the CFO’s office. Under this metric, you assign a dollar value to the increased performance among new hires that occurred because of the increased effectiveness of your recruiting process (e.g. the 8% increase in the percentage of new hire salespeople that were rated as “performers” resulted in an average $222,000 increase in six-month sales revenue from each of these new hires.”)
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© Dr. John Sullivan 10/5/20 for the DJS newsletter Aggressive Recruiting