Hiring is one of the most important thing team leaders do, yet few are trained and experienced in the hiring process. A good HR department will educate hiring managers about he importance of their role in the process and show them how to work together to recruit and retain the best people.
Once a new hire is up and running, HR will ask the hiring manger to help assess the success of a new hire. It’s easy to know when you have hired the wrong person, but how to you know when you’ve hired the right one? And overall, how do you measure whether a hire is ‘successful’ or not?
Clearly, it takes more than answering, ‘Is this position filled?’
Hiring mangers must use the right recruiting metrics to understand where the process is succeeding and falling short. There are several measurements that can be used. The first step is for the organisation to agree what to measure. Most often, performance and quality of hire are measured at six months and at 12 months from the time the person starts in the position.
Here are some of the metrics you might be asked to use.
Time to hire
This is a measurement of how long it takes from the time a vacancy is advertised to the time the successful candidate starts – not acceptance of the offer, but until they are installed at their new desk. Companies with strong processes have faster hiring times than those who do not.
Why it matters:
As well as negatively impacting your productivity and revenue generation and possibly annoying your customers, your competition will snap up great candidates if you are not prepared to move fast.
Cost of hire
Some costs, such as recruiters’ fees and advertising, are obvious and straightforward, but others are easily overlooked. How much time did the hiring manager take to interview candidates? Did they spend time in negotiation? Did they spend time on social media accounts in relation to the hire? Were there travel costs?
Why it matters:
Knowing the cost per hire helps to ensure that the organisation’s recruitment processes are feasible and match those of others in your industry, location and size of business.
Retention rate
How long do people stay at your organisation and in your team? The costs are not only those associated with the expenses associated with hiring a new person, but include loss of productivity when a person resigns or a position is open, and the costs of rehiring and retraining.
Why it matters: The cost of replacing somebody is estimated at anywhere between 30 and 400 per cent of annual salary, so making sure you hire people who stick around is really important to the business and to your team.
Time to productivity
How long did it take the new hire to to get up to speed and be fully productive? How did this compare to their peers and to the person who had the role before them? Did they reach their performance targets within a reasonable time?
Why it matters:
Clearly there are financial and revenue implications, but this measure matters to the whole team and may reflect on the hiring manager too.
Offer: acceptance ratio
How many offers did you have to make before you filled the role? If the candidates you choose are not ultimately coming on board, you may have a problem. They might perceive that the organisation does not meets their expectations, or a competitor may have made a more attractive offer. Track where you lose candidates and find ways to improve those areas.
Why it matters:
If a candidate turns down your offer, you will have to begin the process again or choose a less preferred candidate.
Engagement and satisfaction
Is the hiring manager satisfied with the new hire at 6 moths and at 12 months? Did the new hire have a good experience of the recruitment process? Are they happy in their role?
Why it matters:
Measuring engagement and performance helps not only the new employee, it also lets you make improvements to your processes as needed. None of the other things you measure will be completely effective if your new hires are not satisfied with their experience.
There are a number of other ways to measure hiring success and all the data that is gathered from them is helpful in different ways. The important thing is to use them to improve processes by translating the measurements into strategies for action to improve the quality of your hires and make the most of your resources.
