How to Measure Quality of Hire Before Making the Offer
A recent LinkedIn research report indicated that these three metrics are what recruiters believe are most important when it comes to measuring new hire success:
- The length of time new hires stay at the company
- Time to hire
- Hiring manager satisfaction
It’s not a surprise that both 1 and 3 relate to quality of hire – this metric has been on the top of every talent leader’s list for years. And, the common theme has been that quality of hire is the primary determinant of success.
However, what seems to be elusive is how to measure quality of hire before the person is hired. Companies have fewer problems measuring quality after the hire. Usually this is based on the new person’s on-the-job performance after 6-12 months. Of course, these types of historical measures are assessed too late to manage incoming candidate quality.
With the absence of a valid pre-hire quality of hire measure, companies take the safe route by over-relying on the need for direct industry experience, a very high standard for minimal education, an endless laundry list of skills and generic competencies and more sophisticated pre-hire assessment tests that the best passive candidates refuse to take. The result of this absurd approach is that it ensures the company will hire average people and have employee retention problems.
Good news is, there's a better way - one that allows you to know the quality of a hire before making the hire.
How you can predict quality of hire
The tactic im about to discuss is one used to promote people internally and hire well-known referrals from the outside. This process achieves predictable results since it’s based on the person’s past performance doing comparable work and the person’s upside potential. What’s odd is that when we hire people we don’t know, we hire people using a process that doesn’t work.
As a recruiter for many, many years who only got paid for making high quality placements, I discovered that measuring pre-hire quality is not hard. It can be summarized using the Quality of Hiring Talent Scorecard in the graphic as a guide. The assumption is that if the person scores high on all of the factors he/she will be a top performer on the job. It’s important to note that the ranking scale is non-linear and the assessment is made in comparison to real job needs.
Quality of Hire Ranking System
Level 1: Meets the bare minimum requirements, typically in the bottom-third of the peer group.
Level 2: Meets the average level of performance doing comparable work.
Level 3: Has a track record of doing work at a level comparable to those in the top-third of the peer group.
Level 4: The quality and quantity of the work performed represents someone in the top 10-15% of the peer group.
Level 5: Past work performance clearly indicates the candidate is in the top 5-10% of the peer group.
In order to determine pre-hire quality of hire, the job first needs to be defined as a series of performance objectives defining top third performance. This is the benchmark used to measure comparable past performance. If the candidate isn’t motivated to do the actual work required, doesn’t fit with the manager and the environment and doesn’t see the job as a true career move, on-the-job performance will suffer regardless of the innate ability of the person hired. I contend that not considering these factors has been the reason traditional hiring practices aren’t effective in predicting on-the-job performance and quality of hire. And, as a result, is the primary cause of unnecessary turnover.
Making the quality of hire assessment requires the gathering of specific evidence of comparable past performance using something like the performance-based interviewing process I advocate. This information can then be used to calculate the total score to measure quality of hire. A huge added plus: Measuring post-hire quality of hire uses the same factors and the pre- and post-hire variances on any of the factors provide good feedback for process improvement. Most often the problems have to do with lack of clarity around real job needs or the use of superficial or oddball interviewing techniques. (This Lynda.com video offers a good introduction to this Performance-based Hiring process.)
Quality of hire is a critical measure but one not possible to make using traditional hiring processes. However, the process described above is identical to how the best people are promoted and why referrals make the best hires. In these cases the hiring decision is based on the person’s past performance doing comparable work combined with the person’s ability to grow, learn and adapt.
By adopting this type of process, companies will not only be able to accurately measure pre- and post-quality of hire but also, as a result, improve on-the-job performance, increase employee satisfaction and reduce turnover.