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Recruiting Effectiveness Measurement

Recruiting Effectiveness Measurement

Nov 10, 2010

Last post I wrote about recruiting efficiency measures.  From the effectiveness side, we’re all used to things like first year turnover rates and performance rates.  Once again, we’ve been using these metrics forever, but they don’t necessarily measure actual effectiveness.  You’d like to think that quality of hire metrics tells us about effectiveness, but I’m not sure it really does.

When we look at the standard quality of hire metrics, they usually have something to do with the turnover rate and performance scores after 90 days or 1 year.  Especially when those two metrics are combined, you wind up with a decent view of short term effectiveness.  The more people that are left, and the higher the average performance score, the better the effectiveness., right?

Not so quick.  While low turnover rates are absolutely desirable, they should also be assumed.  High turnover rates don’t indicate a lack of effectiveness.  High turnover rates instead indicate a completely dysfunctional recruiting operation.  Second of all, the utilization of performance scores doesn’t seem to indicate anything for me.

Organizations that are using 90 or 180 day performance scores have so much new hire recency bias that they are completely irrelevant.  It’s pretty rare that you have a manager review a new hire poorly after just 3 or 6 months.  For most organizations, you expect people to observe and soak in the new company culture before really doing much of anything.  This process usually takes at least 3 months.  And while the average performance score in the organization might be “3” your 90 and 180 day performance scores are often going to be marginally higher than “3” even though those new hires have not actually done anything yet.  However, you’ll have a performance score that is advantageous to the overall organizational score making you think that your recruiters are heroes.  Instead, all you have is a bunch of bias working on your metrics.

I’m not sure I have any short term metrics for recruiter effectiveness though.  Since we don’t get a grasp of almost any new hire within the first year, short term effectiveness is really pretty hard to measure.  I’m certainly not saying that turnover and performance are the wrong measures.  I’m just saying that you can’t measure effectiveness in the short term.

First of all, we need to correlate the degree of recruiting impact that we have on turnover versus things like manager influence.  If we’re looking at effectiveness over 3 years, we need to be able to localize what impact recruiting actually has in selecting applicants that will stick around in your organizational culture.  Second, we need to pick the right performance scores.  Are we looking at the actual performance score? goal attainment, competency growth, or career movement in # years?  Picking the right metrics is pretty critical, and it’s easy to pick the wrong ones just because it’s what everyone else is using.  However, depending on your talent strategy, you might be less interested in performance and more interested in competency growth.  You might want to look at performance for lower level positions while the number of career moves in 5 years is the metric for senior roles.  A one size fits all does not work for recruiting effectiveness because the recruiting strategy changes from organization to organization and even between business units within the same organization.

Overall, recruiter effectiveness is not as simple as it seems, and unfortunately there isn’t a good way to predict effectiveness in the short term.  In fact, short term effectiveness may be one of those oxymorons.

2 comments

  1. A key reason why you see few poor-performance scores early on is that managers view a poor hire as a reflection on their ability to select and thus score to highlight their recruiting skills. When you compare hires who are reviewed by people not involved in the hiring you see a more ‘normal’ set of scores.

    There are some roles where quality of hire can be measured, but they tend to be commodity type positions with considerable objective operational data. For most its not that simple.

    I think to look at recruitment effectiveness – and here I believe you’re interested in quality of hire not operational effectiveness – well constructed surveys are important. You also need to understand what is realistic to see after 3 months (or early stage) and measure that.

    I’m a keen believer in what the literature describes as ‘realistic information hypothesis’. Setting of expectations in both directions is a key part of the hiring process and unmatched expectations are correlated to early exits. Surveys can be used to look at expectation matches. This is especially useful when viewing by source of candidates. As always it’s only a partial picture.

    A few of key points:
    * capture as much data as possible in a way that facilitates linking. Transactional data, performance data and survey results etc. Use data mining to spot patterns with large data sets
    * understand that correlation isn’t necessarily causation
    * look for failures not positives. Survival analysis techniques are useful

    Of course almost all data will look at a one-sided view of effectiveness. By this I mean it enables you to minimize the number of poor performers. It is unlikely that it can tell you your effectiveness at spotting all the good performers. The ones that got away become invisible.

  2. Are there measures that don’t look at the standard performance core? How about:
    - promotions in the first 5 years
    - number or % of hires that go into the HiPo pool in their first 3 years of employment
    - Total incentive payment by candidate type

    Just some thoughts. There has got to be something action based that is reliably quantifiable other than performance scores.

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  1. Recruitment Metrics 2010 » HR Tech Central - [...] Recruiting Effectiveness Measurement Systematic HR Wednesday, November 10, 2010 Last post I wrote about recruiting efficiency …
  2. How Do You Measure the Effectiveness of Talent and Recruitment? | blur Innovatrs - [...] examining the effectiveness of your HR? Consider the criteria you are using to judge yourself, as Systematic HR details. …

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