Did you know that 20% of new hires turn out to be bad decisions?
That’s a hard cold fact from the good folks at CEB Recruiting.
Scary right? Well, it got me thinking about the impact of a great hire, the impact of a bad hire and how we can actually tell the difference between the two – how do you know if you’ve
made a bad hiring decision?
And why is that even important?...
...It’s too late anyway.
Well, as with any other process, it’s really (really) important to measure the success of your recruitment so you can make sure you’re doing the right things now and, if not, improve in the future.
But it’s not easy to measure post-hire success.
That’s why so many companies don’t bother or simply rely on their gut feeling alone (that agency sent me this terrible person so I won’t use them again).
So that’s why I wrote this blog for your today…
What does “success” look like?
Before you can even hope to assess the quality of your hire, you need to have a clear vision of what the “perfect hire” looks like.
So, you need to have a clear, empirical vision of the successes, numbers and targets a recent hire should be hitting before you can measure against it.
Here are some metrics that will help you build that vision:
1. Cost of hire.
In the grand scheme of things, the amount that you spend on a good hire should pale into insignificance.
The output you get from them will give you more than enough in terms of an ROI.
However, if you spend much more when hiring for certain positions then it might be worth investigating different ways to advertise for them.
- Have you considered social media recruiting?
- Group interviews or assessment days?
- Does one job board give you all the best candidates while the rest waste your money?
If you’re pumping money into traditional advertising then an honest assessment of your spending could save you a lot in the long run.
Keep an eye on the cost of each and every hire, from the first advert to the final interview.
Then look for ways to improve/ different methods you could be using.
2. Time to hire.
Obviously, you need to hire as quickly as possible, without sacrificing quality or rushing into any decisions.
The whole company will suffer if you spend too long filling key positions.
So, the time to hire is an absolutely critical KPI when it comes to your hiring success.
Assess how long every stage of the process takes and see if there are any ways you can speed things up. Is there a bottleneck? Are you wasting any time at all?
For example, some companies spend too long during first round interviews or assessing CVs.
Others spend a lot of time on application forms and psychometric tests.
It’s fine to use such things and take your time, but it’s important to keep track and make sure there is enough of an advantage to keep spending this time.
You might find, it saves both time and money to use an outside recruitment agency for the preliminary stages of recruitment or that application forms are an unnecessary road block.
You might also realise that creating a pipeline of talent is well worth the effort.
3. Individual Performance.
Virtually every job comes with Key Performance Indicators (KPIs) these days.
If you don’t use them, then you probably should.
It’s a simple way of making sure that every staff member is working to their full potential. It also provides a yardstick for new recruits and helps give them direction and motivation.
Staggered KPIs will help them get up to speed.
But, along the way, you should take note of the time it took them to achieve the minimum acceptable productivity.
This can highlight issues with your training, as well as particular problems with a member of staff.
If you have all the figures then it’s clear if it’s an issue with the individual or if you need to take a look at your own procedures.
Check out this blog for some more information on KPIs: The Basics of Key Performance Indicators (KPI)
4. Mistakes.
(Ok, this is a little bit more controversial…)
Everybody makes mistakes, but you can kind of assume that the better the employee, the less mistakes they would make. But how can you quantify that?
Firstly, it’s important to make a note of all mistakes (I know that sounds a bit negative, but you’re not going to use them as a weapon and it is worthwhile in the long run).
Secondly, it’s worth applying some kind of scoring system, according the seriousness of the mistakes – you should keep this as consistent as possible.
This means that when you assess people on their performance, you’ll properly be able to weigh up their pros and cons, successes and mistakes.
This will never be the perfect system, but it will help you to assess whether a new hire is dropping the ball on a regular basis or just once in a while.
Recruiter Pro Tip Quantifying mistakes will allow you see trends across departments too. Do certain teams have a consistently low error rate? This could be because they have superior managers or a better method of recruiting.
This may seem like a bizarre idea, but some companies use it very successfully… just make sure you are fair in all of your judgements.
5. Staff retention.
It costs a significant amount to hire and train new staff, so you want to keep as many people on board, for as long as possible (unless they’re awful of course…)
So, again, you have to analyse patterns and make sure that you know which departments are retaining top staff and which ones are losing them.
The following could affect your staff retention:
- The recruitment process. Perhaps the wrong person gets hired.
- Is there a certain person scaring their employees off?
- Training and development. Are you offering people enough?
(Click here to find out more about these.)
Which is why it’s so important to keep an eye on your staff retention rates.
Can you improve your recruitment and other processes so that people stay happier for longer?
This leads nicely into our next metric…
6. Employee satisfaction.
Just because your employees stick around, doesn’t mean they’re happy.
There could be a variety of things going on that you don’t know about but need to – that’s where the “employee satisfaction survey” comes in.
These should reveal how happy your team are, because if they’re not happy, then chances are they are not working to maximum productivity – and they will eventually leave.
Summary
Recruiting someone costs an awful lot of money.
So when you hire someone for your business, you want to know…
- They can do the job.
- They’re going to work hard to get the job done.
- They’ll fit in with the rest of the team.
- You can keep them motivated and engaged in the future.
- They aren’t likely to jump as soon as a better offer comes along.
And all of those things are affected by your recruitment process… a certain job board might be yielding less qualified candidates, a certain interviewer may not be asking cultural questions properly, psychometric testing might be a complete waste of time for certain roles.
That’s why it’s so important to track these recruitment metrics.
So you can work out exactly what is the most successful strategy and improve upon it.
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