I’ve been thinking a lot lately about how to measure hiring quality, and I’m hoping to test an idea with you.
Over time I have grown a bit frustrated with the focus on “time to fill” measures. It can lead recruiters to shorten cycles that need to be longer, and it can encourage managers to settle rather than find the right talent. I understand the need to minimize vacancy lengths, particularly in environments with ongoing weekly production needs. But for most companies, there is little question that finding the right person matters a lot.
So why don’t we measure it?
It is important to note that Hire Quality is not the same thing as measuring recruiter performance. Of course recruiters need to focus on hiring with quality, but it is a mistake to assume that Hire Quality is theirs to own. Just like classic “time to fill” metrics can be misleading as recruiter performance indicators, so can hire quality. Similarly, let’s be clear we are talking about the hire becoming a great employee, not simply executing a good hiring process. So surveying managers after the hire is made is not the answer (you should do that… but not as a measure of hire quality).
Ultimately, a great hire can probably be simplified into two dimensions: they contribute to the company at or beyond expectations, and they stick around for at least a while. Both of these dimensions require time in order to evaluate. But since we are not solving for a recruiter performance metric, I am going to assume that a longer-term view is acceptable. As such, here is a proposal for measuring Hire Quality, using two metrics:
New Hire Retention Rate: Percent of new hires who make it to their 24-month anniversary. You can substitute 24 months for another benchmark for your company or industry. By definition this is a percentage from 0 to 100.
New Hire Performance Rate: Percent of new hires who achieve a certain performance rating/measure/level in their second year in the role. I chose the second year since first year performance is really all relative to expectations and likely measures the onboarding experience more than the quality/fit of talent. By definition this is a percentage from 0 to 100. The denominator is the number of original hires, not just those who survive. You can deliberately define “performance” as needed, given your context.
There is value in calculating Retention Rate separately from Performance Rate, even though Performance Rate has the attrition built in (since you divide by those who started, not just those who survived). Using a separate measure lets you judge when the primary issue is retention rather than performance, which is helpful in diagnosing change needs.
I’ve used this approach in the past, but at limited scale. I found the metrics and dialogue they created helpful, but it wasn’t across a wide enough population or over a long enough period to see how stable it would or how it would respond to changes. I’m curious if such a model would scale to larger organizations, or how this contrasts with how other organizations are defining hire quality.
Thoughts? Comment below, on LinkedIn, or you can send me an email (firstname.lastname@example.org).