Posted by Cabot Jaffee on Tue, Aug 24, 2010 @ 10:57 AM
The Society for Human Resources Management (SHRM) has stated the following fast fact: “On average, companies that did a better job of attracting, developing and retaining highly talented managers earned 22% higher return to shareholders.”
Most recruiters and staffing organizations are labeled “successful” if they fill jobs quickly, at a low cost, process high numbers of candidates, and are easy to work with. Seldom are recruiters and staffing organizations measured by turnover or performance levels of those hired. For example, would your organization think a recruiter was excellent if he/she was able to hire 1000 people in a month (more than anyone had ever hired before)? Well how would that recruiter be perceived if 990 of those hired didn’t work out on the job for even 60 days? Organizations must begin to evaluate the quality of their hires versus focusing on quantity and cost containment.
There are many ways to define quality of hire, and many organizations even vary in their definition by department or job title. But essentially, what is important to any organization is that the recruiting process consistently delivers productive employees who produce good results, are engaged in their jobs, and want to grow and learn more.
We have found the process to capture the “QUALITY OF HIRE” measure expands the dialogue between recruiters and line managers beyond efficiency numbers to a conversation around the quality of talent and the organizational impact this talent will have.
The following blog will discuss what factors to consider when measuring quality of hire, as well as when to measure and how.
What Should We Measure?
Individual Performance Metrics of New Hires
- productivity, output, sales, customer satisfaction levels
- number of weeks to achieve acceptable performance
- error rates
- performance appraisal ratings
- number of months to achieving first promotion
- number of awards/certifications
- performance in training programs/assessments
Retention Rates – Turnover is a high cost for all companies and is impacted by so many variables. Click here to
download AlignMark’s turnover calculator which considers factors such as job position, separation costs, replacement costs, training costs, productivity loss.
Manager Satisfactions - Survey hiring managers from year to year asking:
- quality of hire perceptions
- quality of the competencies and skills acquired
Candidate Satisfaction - Survey candidates from year to year and ask:
- perception of the recruiting/selection process
- perception of how candidates were treated
- overall company image
When Should We Measure?
Immediate/Intermediate Measures (up to six months post hire)
- output, production compared to recent hires
- output, production (on average) compared to last year’s hires after their first six months
- managers’ perceptions of performance of the new hire after their first and sixth month
- managers’ perceptions of performance (on average) of new hires at six months versus performance of new hires last year after six months
- time to productivity (on average) versus new hires last year
- performance of new hires (on average) in training programs, certifications, assessments versus new hires last year in their first six months.
Longer-Term Measures (beyond 6 months)
- Managers’ perceptions of performance at the one month, six month, and annual intervals
- Managers’ perceptions of performance at the one month, six month and annual intervals (on average), versus the same intervals for new hires last year
- year-end survey of all managers on their satisfaction with the recruiting/selection process—year to year
- the percentage of above-average performers who are still with the company (not including involuntary terminations) after one year, versus the percentage of above-average performers who voluntarily left the organization last year
- the percentage of new hires (last 12 months) who are still with the company (not including involuntary terminations) after one year, versus the percentage who left voluntarily last year
- the cost differential of voluntary turnover this year versus last year (see cost of turnover calculator)
Summary
What’s measured gets paid attention to. The importance of collecting data about an organization’s most important asset--its human capital--will only continue to increase. Calculating the quality of new hires allows staffing managers to communicate the quality of their hires as well as the efficiencies of the recruiting processes. Like all human capital measures, quality of hire should not stand alone. Rather, HR professionals should use this metric in conjunction with other measures to provide a balanced assessment of their organizations’ human capital.
Posted by Cabot Jaffee on Fri, May 28, 2010 @ 12:15 PM
Despite thousands of applicants applying to organizations with job opportunities, businesses today are facing a long-term talent shortage unlike anything experienced over the past several decades. Leading editorials as diverse as The Economist and CNN Money have pointed out that the problem is the shrinkage in highly skilled work force, increasing worldwide demand for highly skilled knowledge workers and globalization of the economy will create difficulty for even the most creative and successful businesses in managing their talent pipeline.
Over the next 10 years, the demand for talented people will far exceed the availability of skilled workers - at all levels, and in all industries. Before proceeding further, let’s put things into perspective. The recruitment and staffing department within each organization is responsible for recruiting the primary assets of the company – its workforce. For a company to make sure that their recruiting department is effective and efficient, proper performance metrics must be employed along with the aid of tools and techniques to source and screen talent.
How do I know I have a problem?
- I have fewer applicants than I’d like showing up at my door
- Resumes never give me the right picture
- I am spending too much time calling each candidate
- I am spending too much time talking to candidates that are not really qualified
- My applicant to hire ratio is very low
- Line organizations constantly differ with the candidates that are shortlisted
As we speak with staffing and talent acquisition executives from around the world, they all express frustration in creating a measurable means that drives one main objective – getting the right candidate for the job. In order to achieve this objective we must first look at how the recruiter of today is being measured and its implications on how he/she sources. We have noticed that organizations measuring their recruiters in traditional methods and processes are losing out in the war for talent.
According to us recruitment has 3 key areas to focus on that every recruiter and recruitment manager need to live by.
- Attracting talent exhaustively
- Screen talent systematically
- Measuring talent for knowledge, skills, abilities, and other factors such as fit.
What am I doing wrong?
Recruiters today are being trained to “screen out” applicants, thus making their roles very transactional. Measuring the number of transactions a recruiter could perform in a specific amount of time led to the creation of the most commonly used metrics: Cost-Per-Hire. Many organizations continue to employ these same metrics on today’s recruiter with poor results and low “client” satisfaction.
Cost-Per-Hire, the most common measurement applied to recruiting, only looks at the initial cost and not the long-term cost associated with hiring the wrong candidate. Focusing purely on initial cost will drive recruiters to focus on making more hires as opposed to making better hires and loosing focus on the three elements of recruitment practices. This metric can inadvertently create conflicts between recruiting and hiring managers by driving the recruiter to ‘sell’ candidates internally that may not be appropriate but come at a low cost.
To summarize: “How recruiters are measured is having its impact on the quality of hires”. But smart recruiters and recruitment managers can change the way they hire and be accountable for quality of hires while continuing to make more hires through a very systematic approach. To achieve this recruiters should spend more time with pre-qualified candidates and leverage technology that simplifies processes and systematically follows the 3 key areas of focus; attract, screen, and measure.
How do I address that problem?
The smartest employers, who hire the best people, recruit a pre-qualified candidate pool of potential employees before they need to fill a job. The earlier you adopt these practices, the better your organization will do in the war for talent
For more detail on addressing this or other recruiting issues please contact us or download some of our recruiting white papers.
Posted by Cabot Jaffee on Mon, May 10, 2010 @ 03:14 PM
Most of us have heard of online job boards or job portals and understand how important they are to recruiting and hiring. And while they have a certain appeal to many job seekers, rarely does a job seeker focus on only one single job portal. Most candidates are willing to look across many different job boards for job opportunities. Conversely most companies recruiting strategy allows them to choose only one to advertise in given the costs associated with advertising on multiple boards.
Many companies have started experiencing great success finding candidates at a lower cost per candidate utilizing many less well known, free job boards. One of the keys to having success with any job board is the frequent "updating" and utilization of the job posting.
A System that has functionality that allows a company to create a job description and automatically posts to a variety of free job boards such as GoogleJobs, Simply Hired, Craigslist, and Kijiji will lead to an increased number of candidates. In other words a company that now posts on 10 job boards versus just one will clearly not have any less candidates and in fact will have significantly more. Subsequently, the System must automatically keep the post updated. This will keep the job listing fresh and listed towards the top of similar postings.
There are numerous examples of Systems working as described above. A major Real Estate Brokerage has utilized a System for five months now. Since the System was implemented, there has been over a 100% increase in the number of leads generated through job boards in the past. This has significantly lead to a decrease in the need to spend as much money on the more expensive job boards thereby leading to a significant return on investment. For example, here are some job boards without a System and with a System:
| Without System | With System |
Paid Job Board Per Month | $695 | $0 |
Costs for posting on other job boards | $200* (time it takes to post and update to 10 job boards once per week) | $135* (auto-poster capabilities of System) |
Total costs - generate leads thru job boards | $895 | $135 |
# of leads - paid job boards Additional leads generated | 40 0 | 0 10 |
Postings on other job boards | 40* (if no update leads start to diminish) | 40 |
Total leads | 80 | 50 |
Cost per lead | $11 | $2.70 |
We'd be interested in your input with regards to your organization posting listings on job boards. Do you have an online Recruiting System in place for keeping your listing updated? Are you interested in finding such an automated Recruiting System? Click
here to find out more.
Posted by Cabot Jaffee on Sun, May 09, 2010 @ 08:51 PM
We've
all heard about Gen X, Gen Y, Boomers, etc. and each of these generations have certain characteristics that "bond" them together with the most obvious one being age. Today a new generation has evolved that has nothing to do with age. We'll refer to the newest Generation as Generation Web or "Gen Web" as its members are bonded together by a single factor - Technology.
Everyone talks of baby boomers retiring and the future shortage of qualified workers in the labor market. Well in almost all cases it's the new "Gen Webbers" that will fill this gap, regardless of their age. Given the current economic condition, workers from all generations that join Gen Web will be asked to fill tomorrow's jobs. Fortunately the time it takes to be part of Gen Web can be relatively short, as today the majority of jobs are becoming more and more dependent on technology. This trend will only continue, and in fact, accelerate faster in the near future. As a simple example for boomers - remember when you first used a computer, laptop or cell phone - for the younger generation, remember when you first began to text message or use MySpace. Technology weaves us all together, especially when it comes to recruiting and business.
So what are the implications of this for business? The need for this new generation in the workplace will force businesses to change many of their HR practices. The ways in which companies recruit, hire people, train and develop their employees, and manage them on the job will take on a very different look versus today (yes even today.) We're already seeing the rapid increase in the use of social networking to find new sources of candidates and passive job seekers. This trend will continue with new ways of training and sharing information, new ways of collecting performance data on workers, etc.
And we're not just seeing the need for technology in the workplace. New ways of communications, gathering information, reading books and newspapers will all continue to evolve. And as the technology evolves, so will the needs and skills of this newest Gen Web generation. Grandparents will join in this generation to communicate with their Grandchildren. Politicians will connect with their constituents. And Business will use technology to better connect to its customers, suppliers, and employees.