AlignMark Recruiting and Selection Blog

Talent Acquisition: Measuring Quality of Hires Versus Quantity

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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.

Manager Satisfactions - Survey hiring managers from year to year asking:

1. quality of hire perceptions
2. quality of the competencies and skills acquired

1. perception of the recruiting/selection process
2. perception of how candidates were treated
3. overall company image

1. output, production compared to recent hires
2. output, production (on average) compared to last year’s hires after their first six months
3. managers’ perceptions of performance of the new hire after their first and sixth month
4. managers’ perceptions of performance (on average) of new hires at six months versus performance of new hires last year after six months
5. time to productivity (on average) versus new hires last year
6. performance of new hires (on average) in training programs, certifications, assessments versus new hires last year in their first six months. 

1.  Managers’ perceptions of performance at the one month, six month, and annual intervals
2. Managers’ perceptions of performance at the one month, six month and annual intervals (on average), versus the same intervals for new hires last year
3. year-end survey of all managers on their satisfaction with the recruiting/selection process—year to year
4. 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
5. 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
6. 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.

Does Web 2.0 mean anything for Recruiting, Selection, and HR

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Of course it does! For HR leaders Web 2.0 is a phenomenal opportunity to engage with their employees and talent community and the community at large. In this blog I will share examples of how companies are leveraging these social computing technologies to gain competitive advantage in talent management.

So what is Web 2.0? It is the second phase of the revolution that started almost 15 years ago with the introduction of Netscape browser and changed how we access knowledge, communicate and collaborate with each other. Forrester Research identified a trend it called "Social Computing" where people are socially and professionally connecting with each other using on line tools and social networks like LinkedIn, Facebook, and Plaxo to get information from each other rather than from centralized structured institutions. People buy from each other on EBay vs. going to a supermarket or store; people in cities throughout the world rent apartments from Craigslist vs. looking through the classified section in newspapers. A friend of mine just recently downloaded Open Office - a Microsoft Office competitor that is free and is being created by engineers working together across the world vs. a big company like Microsoft.

Businesses and HR are ambivalent about how to put its arm around this phenomenon as businesses are built on command and control and organized dissemination of information. This undermines that control and flow of information. This revolution has already transformed businesses, created new business models and how companies conduct business. Encyclopedia Britannica which was the fountain of knowledge cost a fortune to own and a room to store has been replaced by Wikipedia which is free, real time and takes no space. This revolution has been embraced in our personal lives. One out of seven urban couples married in 2007 met online; MySpace is the 11th largest country in the world; and now companies are engaging with candidates as much via SMS text messages as email.

Among the top trends Watson Wyatt has recently identified many companies are adopting advanced, "web 2.0" technology. With the rapid growth of consumer-oriented web 2.0 applications, organizations are considering increasingly interactive strategies and technologies. While many corporations are using web 2.0 elements such as blogs and wikis, organizations are just beginning to implement other elements of social networking. All of these systems could reduce the focus on traditional e-mail and make work communication a more dynamic experience for employees.

Let me first share few examples of how web 2.0 is changing the HR world.

Connecting with Talent

Employees and talent community are natural groups for such social network. They work for you or would like to work for you. Dow Chemical was one of the pioneering adopters of a corporate intranet and recognized the value of social computing especially to keep in touch with former and retired employees but understood the need for corporate governance and risk management that is imperative for a 50 billion dollar global company.

Dow launched a social network primarily aimed at is US workforce that allowed people to upload their profile and pictures that could be accessed by current employees and alumni. One month after launch, more than 3,000 users had posted profiles, including 2,624 current employees, 93 former employees and 374 retirees. Managers are effectively using the platform to hire people, obtain referrals or bring in retired employees for short tern projects. The cost savings of hiring using this platform over traditional methods paid for the cost of technology is a few hires.

Listening

Bell Canada like any large company has employees that have frustrations and complaints and they do not know what or how to channel them, and when they have a good idea do not know who to go to or how to move to forward.

Bell Canada came up with their version of a "suggestion box." Anyone can submit ideas, grievances and have employees vote on them. In 18 months over three thousand ideas were shared, 15,000 employees have visited the site and 6,000 have voted. 27 of the top ideas have been significantly reviewed and 12 have been implemented.

Here is a list of the Web 2.0 component technologies that can be used by HR as well.

Blog - A web site ("web log") where people or groups "post" their thoughts, videos, pictures comments, usually displayed in reverse chronological order. Readers of blogs add their own comments and thoughts. Blogs link with each other to create a blogosphere. It is a great platform for organization to understand what is happening in their company and reach out and connect with the talent community.

SNS (Social Network Sites) - Members of these sites maintain their profile, picture, videos and share with other members their mood, thoughts, ideas. MySpace and Facebook already have over tens of millions members and Facebook is adding over 1 million users per month. Social networks have emerged based on interest and geography. LinkedIn targets professionals. Orkut is popular in Brazil. Hi 5 and Bebo dominate Europe.

Podcast - A digital audio or video file distributed over the Internet for play back on media players and computers. Some are live and interactive. The word is derived from Apple's iPod and "broadcast."

Wiki - "What I Know Is." It is a web site where various people contribute to the content and take shared responsibility editing and maintain the truthiness of the content. According to Wikipedia (the largest wiki), the word comes from Honolulu's Wiki buses (wiki means "fast" in Hawaiian).

Here are the four factors that make adoption of Web2.0 into HR easy and inevitable.

1) Inexpensive -Most of the time the software is free.
2) Easy to implement - This is not your centralized deployment of ERP system. Web 2.0 thrives on amorphous adoption by people.
3) No training needed.
4) It is powered by human need to connect, hear and listen.

Recruiting Practices: What it takes to hire the "Right Talent"

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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.

1. Attracting talent exhaustively
2. Screen talent systematically
3. 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.

Contemplating the terms "Hiring" vs "Recruiting"

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Seth Godin, the marketing “GURU” and author of the book The Purple Cow provides a succinct difference between the terms recruitment and selection.
“Hiring is what you do when you let the world know that you're accepting applications from people looking for a job. Recruiting is the act of finding the very best person for a job and persuading them to stop doing what they're doing and come join you.”

• Hiring is easy and fast and is basically a retail operation.

• Recruiting is artful and slow and is essentially a direct marketing effort.

Recruiting raises the bar because it demands you have a job worth quitting for. The recruiter doesn't solve an urgent problem for the person being recruited, in fact, they create one. That person already has a job (hence no problem). The problem being created is that until they change over to your job, they'll be unhappy. That's a huge hurdle for a job to overcome, which leads to this key question:

Is your job opening so good you could recruit great people for it?”

While it is good to understand the difference between the processes of Recruitment and Selection, most Recruitment resources are under immense pressure to ensure that right candidates are identified for the job opening. Given today’s speed of business and volumes involved in recruitment, the entire process of hiring can be compared to a typical sales process where the focus is on numbers and not on quality of hire. It is important that Recruitment Managers and the Business heads conduct periodic reviews of the Pre Hire assessment of the candidate and compare the same with performance reviews and ratings. This would give the organization a broader understanding of the efficiency of the recruitment process in a qualitative manner, thereby providing the management a deeper understanding of why skill and competency gaps exist in the organization.

Levels of Recruitment

Organizations are built like the proverbial pyramid and 80% of annual recruitment numbers correspond to entry level resources. To ensure that demand does not overshoot the supply of such skilled resources, many organizations today follow various processes to hire employees. They can include strategies such as job fairs, campus recruiting, and finding people currently working with experience.

Assessments and Interviews

There are various assessments that can be employed to ensure that you are recruiting the right candidate. This could range from aptitude and skill based assessments to full blown assessment centers along with psychometric tests. Structured interviews should be an integral part of any recruitment process and the rigor associated with the same, ensure highly comparable and objective measurement of a candidates skills and abilities.

The Challenge

Most organizations today are faced with the problem of dearth of specific skills and competencies across a specific Business Unit or Management level. While competency mapping and performance reviews help identify existing skills and abilities of employees, they still do not address the immediate and real problem of having someone with the required skills to ensure the business if not affected. Most organizations today respond to such situations by creating a Job Requisition and ensuring that someone with suitable skills is found to bridge the gap.

What organizations and Recruitment functions fail to see is that after a certain period, which may vary from business to business, another competency gap will be created and the entire cycle will be repeated from scratch. It is important that businesses evaluate employees on a periodic basis, but it is even more important that the same be compared with the employee’s pre hire evaluation. This would provide the business and HR with vital data on how much off tangent were they in evaluating the candidate and could help them take suitable steps to mitigate the risk in future.

Integrated HR systems which captures information right from initial  assessments and interview feedback till the time an employee exits the organization, provides the HR team with actionable and reliable information that can be used to better the process of recruitment, as well as employee performance, thereby ensuring that the recurring cost associated with continuous recruitment can be reduced.

For a better understanding or more information on this topic please don't hesitate to Ask Us about Recruiting or download our latest worksheet to determine what recruiting is costing your organization.

Real Talent Management Leadership Requires Action!

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This is the context within which most organizations are choosing to operate. Many of our clients, however, are making savvy decisions where they see the current economic climate as the perfect time to get their talent management systems in order. They understand that improving their talent screening and selection systems, upgrading their leadership talent, and improving workforce productivity-- are the only keys to making their workforce more capable, committed, and aligned to drive even greater operating success. Some of our clients recognize the absolute predictive nature of their human capital assets and systems as "leading indicators" to cost reduction and gaining competitiveness. We encourage all our clients and the many prospects we aspire to work with in the near future-- to work hard on the fundamentals now. Diagnose the strengths and weaknesses in your talent management processes and take action on closing gaps-- optimize both your talent assets and systems now-- so you are prepared to compete when the economy recovers (which is NOW).

AlignMark research and white papers are availble to find out more.

Save Money Recruiting by Finding Candidates Automatically

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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.

GenWeb: What today's newest generational group means for recruiting

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 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.