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    Winter-2016  


New Study Shows Most Companies Don’t Measure Quality of Hire

 A new global benchmarking report titled “Hiring for Success: Improving Organizational Performance Through Better Quality Recruitment” was recently launched by Hudson RPO (http://hudsonrpo.com) and the HRO Today Institute (http://www.hrotoday.com). Several hundred global human resource leaders were surveyed about their quality of hiring practices as part of the study.

The Hiring for Success report defines quality in the workplace; the benefits of measuring quality of hire; the challenges of collecting data; and how to improve hiring processes. It also includes six strategies for improving quality of hire plus a case study demonstrating the commercial value of committing to a quality of hire program.

According to Hudson RPO Global Leader Kimberley Hubble, “All hiring managers know that there are considerable differences in productivity between average performers and high performers, which means quality of hire is imperative for businesses. Yet our study shows that 69% of respondents are not measuring quality of hire at all. We wanted to understand why this is and what companies can do to seize this untapped opportunity to improve their productivity.”

A snapshot of significant report insights include:

  • Eighty-five percent of the companies that measure quality of hire believe doing so has a positive impact on hiring quality; nearly half believe there is a significant impact (improvement of more than 25%).
  • Of those that do measure quality of hire, the majority do not track the most effective metrics. Best practice dictates that more companies need to cross-reference metrics to create a multi-dimensional view. Often one metric does not tell the full story.
  • Of companies that measure, most do not differentiate between job roles. Executives, managers, sales staff, customer service staff and others are evaluated against the same metrics. For the greatest value, companies should develop specific metrics to fit each job group or family.
  • Overall, companies grapple with their HR technology. Only 35% of respondents say their HR information systems are working “well” or “fairly well” in supporting the measurement of hiring quality.
  • Worldwide, hiring manager and recruiter skills were noted as the most important influences on quality of hiring.
  • Surprisingly, less than half of the respondents identified a connection between candidate source and quality of hire.
  • Measurement of candidates’ motivational drives and behavioral capabilities in combination is the most accurate predictor of whether a candidate would be a high performer in a role: 91% of hires were rated good or excellent when such formal procedures were used.
  • Sixty-two percent of those who measure quality of hire state that it has a dramatic impact (more than 25% improvement) on new hire retention.

“With some reports finding the cost of turnover ranging from 20% to as much as 200% of an employee’s annual salary, the benefit of quality of hire programs on new hire retention alone should make HR leaders take notice,” said Elizabeth Boudrie, Executive Director of the HRO Today Institute.

 


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