How to Measure Quality of Hire for Customer Success
After exhaustive research, studies reflect only 23% of all organizations measure quality of hire. Of those companies, only 10% feel they are measuring correctly. That means, only 2.3% of all companies feel they are measuring quality of hire in a meaningful fashion??!!?? If this is true, why aren’t more companies testing quality of hire strategies or focused on improvement? Because it is hard…
Quality of hire is the Holy Grail metric for most recruiting organizations. Poor quality of hire can quickly destroy a team or company, while an excellent quality of hire can, over time, take an organization to the next-level performance.
Studies reflect that the average separations within Year 1 of hire is at 28%, which does not include those “mis-hires” that are still with the organization. That is only for Year 1 employees, not inclusive of all turnover rate.
The cost of a “mis-hire” is extremely expensive, both in “hard” and “soft” dollars to an organization. Some research shows that, depending on the level and tenure of a “mis-hire”, it can cost organizations up to 5x base salary. Some criteria involved in that calculation reflects recruitment, compensation, severance, disruption, missed opportunities, etc…
Here is the problem – Measuring quality of hire is extremely difficult. So difficult, in fact, that most companies never bother to attempt to measure it. As such, I am going to outline a path in which to do so and make it possible.
Step 1: Define “Quality”
What is a “quality hire”? Before you can ever hope to measure it, you must first define quality for your organization. This is probably the most challenging part of the entire process, as there may be differing opinions in your company. If you were to ask 5 different leaders in your company to define a “quality hire”, you’ll probably get 5 different responses.
Does quality mean Capability fit? Culture fit? Commitment fit? In our organization, the answer is yes to all. We follow the TopGrading methodology, which reflects that each category is as important as the other. We gain alignment of the capability needs (skill sets to perform the job), culture (values of the company), and commitment (willing to go above and beyond to get the job done). We find our highest performers and “Role Models” and take their characteristics and apply to those three categories. Once we are aligned, we have a roadmap in which to proceed.
Step 2: Measurement Methods
Now, down to the fun….Here are a few suggestions on how to measure:
Customer Satisfaction Method
Use a survey to ask your hiring managers how satisfied they are with the quality of their new hire. This should be done in an user friendly method as hiring managers also have their “day jobs”.
If your performance review process has some rigor and there is a good distribution of ratings, this can provide a good, objective measure of how good your new hires are compared to your highest performing employees in a given job. It is important to note that the performance evaluations should reflect the components of the hiring criteria. Why hire someone for different expectations on how you want them to perform?
With this method, companies investigate the “data blueprint” of their high performers. Also called a success pattern, this allows you to use data-clumping to illustrate and measure what makes your high performers tick. Once you have defined a success pattern for the job, you can measure anyone against the pattern to see how similar, or dissimilar, your applicants are compared to your known high performers.
Using all three methods concurrently increases your probability of success dramatically, however I realize we need to crawl before we can run. As such, if you do not have any process in place, I recommend the Customer Satisfaction method first, and then evolve into the others. This will allow you shortest time to traction.
As we know, the right people can overcome many challenges and increase our likelihood of success exponentially. It is extremely important to have a focus on the talent that is coming into the organization, as well as how it is being managed. Remember, if you can’t measure it, you can’t manage it.