You invest a lot in your hiring process. A study conducted a few years ago by the Society for Human Resource Management found that the average cost-per-hire tops $4,000. Meanwhile, the process of bringing in a new employee takes more than 40 days on average.
That doesn’t even take into account the resources and effort necessary for onboarding and training. At the same time, a bad hire creates a major opportunity cost. With the wrong decision, you lose time and momentum that allows your competitors to gain an edge.
Meanwhile, bad hires are frighteningly common. One survey found that fewer than two out of 10 hires (19%) are judged successful. Meanwhile, nearly half of all new employees (46%) fail in the first 18 months.
Why is quality of hire important?
With these stats, it’s clear that most companies can benefit by improving their quality of hire. With these procedures, you can upgrade your organization in several ways at once:
- Improve Performance: Quality hires lead to quality work. By upgrading your hiring process, you create a more efficient organization.
- Build a Better Team: You won’t just benefit from improvement in your individual employees. There’s a multiplying effect. Good employees get the best out of their coworkers. The overlapping value of your better workers will lead to even more impressive performance.
- Lower Turnover: You won’t need to fire your hiring mistakes. At the same time, having strong coworkers and a dynamic organization will help you keep top talent over the long haul.
- Create an Excellent Leadership Pool: Your current frontline workers represent your talent pool for future management positions. Better talent coming in the door means a higher grade of future leaders for your organization.
How do you measure the quality of a candidate?
Most executives see the value in improving their quality of hire. However, the task itself remains elusive. Achieving success in this area means understanding how to measure the value of your incoming employees.
Look at the End Results
The precise metrics to track your employees’ performance will depend on your exact business. But you’ll need some quantitative measures — otherwise known as key performance indicators, or KPIs — to understand how well your workers achieve their goals.
If your team consistently falls short of expectations, you need to run through a series of questions:
- Do you need to improve training?
- Are your expectations too high?
- Are you using the correct KPIs?
Once you control for other factors, you can see how well your hiring process delivers strong employees. From there, you can decide what steps need to happen to upgrade your team.
Track Each Recruitment Step
Don’t just look at your final hiring decisions to track the quality of your recruitment process. You need to find ways to track every stage in the system. That way, it will be easier to identify snags in your procedures.
For instance, look at measures like:
- total applicants vs. number of quality candidates
- number of quality applicants vs. amount of interviews
- amount of interviews vs. number of offers
With these relatively simple ratios in mind, you can spot bottlenecks. For instance, say you get flooded with resumes for each open position, but identify very few quality candidates among those applicants. In that case, you might look at your job description, which is clearly attracting the wrong type of job seekers.
How do you improve your quality of hire?
Once you’ve identified your crucial areas of need, you can take the steps necessary to improve your quality of hire. Here are a few tips to make that possible:
- Clearly Define Open Positions Before Launching a Hiring Process
- Communicate Effectively with Candidates
- Create Skills Tests
- Emphasize Culture
- Involve More People in the Recruiting Process
- Check References
Are you ready to find the perfect candidates for your organization? Turn to a top recruiter, like PrideStaff. You’ll get the expertise you need to maximize your hiring process.