The Only KPI that Matters is Quality of HireOctober 30th, 2013
When corporate HR evaluates itself, it does so through the use of metrics that are not tied to the performance of the candidate. Instead those metrics are tied to the performance of HR and the talent acquisition specialists.
These metrics speak to KPIs that measure “Cost of Hire” and “Time to Fill a Position”. As part of these KPIs, activity must be generated and tracked. From the time positions are opened and posted in today’s world, the following activity is normally measured to make sure the talent acquisition team is on target and has activity on as many positions as possible:
- Resumes generated from referrals and the job postings
- Out of those candidate resumes, how many candidates have been interviewed
- Of the interviews how many offers have been made and accepted
- How many positions have candidates interviewing on them (either one or multiples)
- How many positions have been filled
- How many candidates have been brought in for interviews overall
- What is the average time it takes to fill a position
- What is the cost of hire (with or without recruiting and search firms)
All these metrics are focused on the pre-start process of hiring a candidate or filling a position. As soon as the hire is made, all metrics focused on the candidate-hired ceases.
It is truly rare to find best-of-breed companies and Human Resource departments that care more about Quality of Hire than Cost or Speed of Hire as KPIs. If that wasn’t true, the metric tracking would look much different than described above?
For one thing, the focus would change. From judging how HR/Talent Acquisition is doing or how one or all Recruiting Firms are doing, the focus would be on how the candidate did after the hire. Those metrics are much different and do change the focus to the evaluation of “Quality of Hire”, which can then be tied to HR, Talent Acquisition, Postings, Employee Referrals, Recruiting Firms, Retained Search Firms, etc. The story then addresses what is working and what isn’t, along with the fact that “Quality of Hire” has a huge impact on the success or failure of a company and provides a huge deviation in ROI.
When we look at the metrics here, they consist of:
- How was employee located
- Performance Rankings of employees at 6 months/1 year/2 years/3 years
- Individual retention and average length of tenure
- % of employee resignations/average retention time
- % of employee terminations/average length of stay
- % of overall turnover
- % of employees retained
- % of employees promoted
- % of employees promoted and how often if multiple promotions.
In tracking these metrics based on after the hire factors, we can now extrapolate and make a positive impact on future hiring. Questions that maybe asked include:
- What are the best sources of candidates?
- Why are we loosing our top/poor employees?
- Are we managing our top performers well?
The important thing to keep in mind is focusing on the right information, allowing overall hiring and candidate/employee quality to improve using the information as a roadmap for success.
At Honer & Associates, we focus on these after-the-hire metrics. It is one of the ways that we ensure that we are finding our clients the top-tier, productive talent that they need. Want to know more? Contact us today.