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Picture this. It’s Tuesday morning and Susan is on a tight deadline to fill multiple customer service roles. The Fall season is approaching quickly, when many employees return to school. With an increasing labor shortage, Susan has spent months making her talent acquisition process more efficient, to prepare for the end-of-summer hiring blitz. Susan worked around the clock to research new tools to help her team meet its goals. After months of vetting new tools, and a process to implement the new ones she’s selected, she started to see results. The team’s time-to-hire improved, and so did their interview-to-hire ratio. So this Tuesday is special because Susan is meeting with her boss to report that she has met her hiring goals for the Fall and is ahead of schedule.
When Susan gets out of the meeting with her boss she is dumbfounded. Her boss told her that she was not pleased with Susan’s performance and that the quality of hires has been extremely poor, so now they’ve had to implement a costly training program for their new employees. On top of that, they haven’t hit CSAT targets, so the company has been losing business.
Susan is devastated when she realizes that her cost-per-hire has increased because the quality of hire has decreased. The technology that took her months to implement has only improved one single hiring metric, time-to-hire, and unfortunately, that wasn’t where she needed to focus her energy, she needed to look at performance as well.
“The technology that took her months to implement has only improved one single hiring metric, time-to-hire, and unfortunately, that wasn’t where she needed to focus her energy…”
Imagine how much company time and energy is required to research, vet, and implement new technology into a hiring process, only to find out it doesn’t work and leads to worse hiring results in the long run. Unfortunately, this is a true story for many companies today.
By the end of this article you will understand:
- which hiring metrics are the right ones
- technology’s role and responsibility around hiring performance
- how to improve candidate quality at the assessment phase
The Reality of Hiring Measurement
Susan’s hypothetical story above is better than most. Less than 33% of companies in the United States even measure their time-to-hire let alone how well their new technology innovations are truly working. Harvard Business Review articulates the reality of this situation well:
“The big problem with all these new practices is that we don’t know whether they actually produce satisfactory hires. Only about a third of U.S. companies report that they monitor whether their hiring practices lead to good employees; few of them do so carefully, and only a minority even track cost per hire and time to hire. Imagine if the CEO asked how an advertising campaign had gone, and the response was “We have a good idea how long it took to roll out and what it cost, but we haven’t looked to see whether we’re selling more.”
If companies aren’t measuring how well new hires are doing, how can they improve hiring quality?
Your True Measure of Success is 🥁 Employee Performance
There are so many hiring “solutions” out there that it’s difficult to sort through all of them to find the best fit. Many make promises for greater efficiency or improved performance, but that could be referring to just one metric available when there are so many to choose from. Is hiring performance based on the time-to-hire? Or is performance about meeting a hiring quota? According to the Academy to Innovate HR there are up to 21 different metrics that teams can use to improve recruitment performance, such as:
- Time to fill
- Time to hire
- Source of hire
- First-year attrition
- Quality of hire
- Hiring Manager satisfaction
- Candidate job satisfaction
- Applicants per opening
- Selection ratio
- Cost per hire
- Candidate experience
- Offer acceptance rate
- % of open positions
- Application completion rate
- Recruitment funnel effectiveness
- Sourcing channel effectiveness
- Sourcing channel cost
- Cost of getting to Optimum Productivity Level (OPL)
- Time to productivity
- Adverse impact
- Recruiter performance metrics
Most technology systems dedicated to hiring focus on one or two pre-hire metrics, like time-to-hire, but ignore what happens post-hire. For example, a technology tool seldom reassures hiring teams that if they use their tool they can expect customer satisfaction to increase or sales to be better. They can only tell you that you can make decisions quicker. In reality, this may create more delays if you’re not making the right decisions in the first place. The cost of a bad hire is estimated as high as 27 weeks of wasted time and 3.5x the position salary. Multiplied many times over, bad hires can cost companies millions of dollars. The CEO of Zappos estimated that bad hires cost the company well over $100 Million.
While the costs are significant, there are a few companies that are going beyond pre-hire metrics and integrating with systems that are proven to increase performance post-hire. For example, in a customer service center, hiring teams could instead be measuring a new hire’s customer resolution time, ticket reopens, CSAT scores, net-promoter scores, and so on. These are the types of metrics that truly reflect the quality of a new customer service hire.
Let’s take a look at one company that diagnosed its hiring problem and fixed it.
Telco Solves Hiring Problems With Soft Skills Assessments
High attrition rates were affecting the hiring performance of a large telecommunications company serving over 11.7 million subscribers. Typically managers had focused on training and development programs to help new employees turn into star performers. The training didn’t help. The company even tried an external call center provider to temporarily patch its internal attrition problem.
“They assumed that low-quality performers were a reality and that professional development was the only way to improve the situation.”
They assumed that low-quality performers were a reality and that professional development was the only way to improve the situation. Typically from a pool of candidates, only a portion of them were qualified beyond the assessment phase. Once hired, that pool continued to shrink as candidates dropped off during the training phase. In the end, the telco company was left with a fraction of the talent pool they were able to attract to a job advertisement in the first place. With part-time positions, turnover is even higher and the team was left in an endless cycle of hiring.
The company had been using a language assessment tool and a personality test to help qualify candidates and save time. From there they would hire those that were qualified and put them through training; however, they’d lose many new hires at this stage of the hiring process.
Once they switched assessment tools (to HiringBranch’s soft skills assessments!), they were able to retain all of their new employees and stop the drop-off. This means that they were able to increase the quality of their new hires because they weren’t leaving anymore. Why? With the new assessment tool, candidates were getting a sample of the job they were applying for within the application and didn’t need to wait until training to get a real sense of the role. This is only possible with assessment tools that can simulate real-work scenarios. The solution they are using actively measured the performance of new employees as well to demonstrate how effectively they could select new employees. Rather than training poor candidates, this TelCo company solved its hiring problem at the root.
Rise Above Low Quality and Enter Performance
Being honest about your hiring problem is the only real way you’ll be able to fix it. Hiring faster is a good idea, but only if it truly leads to better quality hires, otherwise you’ll be wasting more time and spinning your wheels. Nip your hiring process in the bud and use tools that ensure better-performing candidates from the get-go. Technology has to be a means to the right end. As HBR concludes “When we turn to hiring itself, we find that employers are missing the forest for the trees: Obsessed with new technologies and driving down costs, they largely ignore the ultimate goal: making the best possible hires.” With the right technology, hiring teams can have their cake and eat it too.
Image Credits
Feature Image: Unsplash/Frame Harirak
Image 1: Graphic courtesy of HiringBranch
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