What is the purpose of quality-of-hire metrics? Quality-of-hire metrics reveal the effectiveness, or lack thereof, of an organization's employee selection process and/or their hiring managers. Their purpose is to trigger positive change, and without them, generally there is no motivation to improve hiring results. 

Why are quality-of-hire metrics so important? Standard hiring metrics such as cost-per-hire and time-to-fill are inadequate because they focus solely on the effectiveness of the hiring process itself rather than on the hiring results. For example, a "fast, cheap" hire might seem good, but if the employee doesn't do a good job these metrics deceive us. Furthermore, Harvard Business School research found that 76% of turnover could be traced back to poor hiring decisions. Without quality-of-hire metrics, organizations really don't know how well their hiring managers are doing at hiring.

What data is important for tracking quality-of-hire metrics? For starters, the best strategy is to keep it simple. More quality-of-hire data is typically not better because the more complex you make it...the more no one will track it. Simple works well - as long as you track the right information. You need to start with a baseline. One of the best indicators of how well an organization is doing at selecting employees is their "short-term turnover" numbers combined with quality of job performance data. As a general rule, "short-term turnover" is any employee who stayed one year or less. It's also important to know how well these short-tenured employees performed while there. Did they meet/exceed job expectations or fall short? How many low performers versus High Performers are leaving? The answers are critical because it determines what you fix. Low performance combined with short-term employment is less of a turnover issue and more of a quality-of-hire problem. Let's be crystal clear...you don't have a retention problem when poor performers are leaving because you don't want them to stay. You have a retention problem when the High Performers are leaving. In the latter, you are hiring right but they aren't sticking around. You need to determine why. In the former, you're not hiring well, and without addressing it, it becomes an unending cycle. Quality-of-hire metrics help organizations to see this critical difference. Organizations that place emphases on retention without first determining quality-of-hire (and improving it), inadvertently create a culture of mediocrity by hiring and retaining marginal job performers. 

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Organizations that discover they do in fact have a quality-of-hire problem need to take corrective action to improve their hiring results. This tutorial doesn't just stop at baseline or past quality-of-hire metrics. It continues tracking new hires going forward. The idea is to determine the effectiveness of the corrective action, with the goal being a reduction in short-term turnover as well as a measurable improvement overall job performance.

How does this tutorial work? This tutorial will walk you through actual quality-of-hire metrics from an organization in Palm Beach County, Florida. It includes real data and real results. And...if you want to track your own metrics, it provides simple step-by-step instructions and a downloadable Excel template with the formulas built-in. Once you enter basic information, it calculates your quality-of-hire for you. It even includes great pie charts and graphs. Click NEXT.

 

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