Quality of Hire: A Vaguely Valid Metric?

data point tuesday_500

In November I wrote about Linkedin’s 2016 Global Recruiting Trends Report (you can re-read it here) and took them to task about their methodology. Turns out they did a bit of a miscalculation and corrected data that looked askew. Good on them. As I looked at a relatively new infographic about their survey data, I was again intrigued by some of their findings. In a good way.

The infographic, found in Linkedin’s Talent Blog, 4 Recruiting Trends to Watch in 2016, boils the report down to 4 key points – and they are good ones:

  • Quality of Hire is the magic metric
  • Employers are finding quality hires faster through professional networks
  • Employer branding is bouncing back as a top priority
  • Employee retention is growing as a top employer priority

The big question raised in my mind by this infographic is: how should we define quality of hire. Linkedin helps us understand that perhaps we should be talking about this a little more than we are.

Linkedin 2016 Quality of Hire

Linkedin’s data show that around the world, the KPIs that define quality of hire shift between three primary metrics:

  1. New Hire Performance Evaluation
  2. Turnover/Retention
  3. Hiring Manager Satisfaction

These are interesting and good metrics. But are they the correct metrics to use in judging wether a hire was a quality hire?

As more employers shun “labeling” performance and leave traditional performance management systems and their inherent biases in the dust, having fair, accurate and reliable performance evaluation metrics may be harder and harder to obtain – especially for employees new to their jobs.

Turnover and retention data are somewhat valuable in that they measure whether the new employee actually commits to their job and the organization and decide to stay. The challenge with this particular measure is that it is two-sided. Employees can quit their jobs if they don’t like their employee experience more easily than employers can fire new employees who don’t perform. It’s hard to make a case that turnover or retention are valid measures of quality of hire.

And hiring manager satisfaction, while maybe the most influential measure, is the least scientifically valid assessment of the three: every manager has their own performance benchmarks that are shaped by their experience, education and time in the job. Certainly a new employee’s ability to create a positive relationship with their boss is significantly influential in creating a positive impression from a performance evaluation perspective. And that makes it only vaguely valid.

It’s interesting that employers in different parts of the world have developed different steps to develop Linkedin’s “magic metric.” That there is not the emergence of a common standard (SHRM or CIPD anyone? Bueller?) creates opportunities for stakeholders to get confused about what is trying to be accomplished. And that just makes it harder to make a business case for a critical aspect of talent management.

I think Linkedin has pointed out an opportunity for significant value in the talent management game:  unless and until we can develop a relatively standard, valid set of KPIs for Quality of Hire, we can’t really make sense of whether or not we’re hiring the great talent we all need. And since having the right talent available to us when and where we need it will make the difference in whether our businesses survive or not, getting a handle on the magic metric just might be helpful.

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5 Comments

Filed under Analytics, Annual Performance Reviews, Big Data and HR, China Gorman, Data Point Tuesday, Global HR, HR Analytics, Linkedin, Performance Management, Quality of Hire

5 responses to “Quality of Hire: A Vaguely Valid Metric?

  1. Pingback: Quality of Hire: A Vaguely Valid Metric? | Mes...

  2. Rob

    China – I published a standard set of recruiting metrics back in September both on ERE and Wikipedia which included a simpler to follow and valid quality of hire metric called First Year Quality (FYQ).
    http://www.eremedia.com/ere/a-standard-set-of-recruiting-metrics/

    Gerry and others industry leaders have been very helpful getting the word out so we can standardize these metrics, so any help and input would be greatly appreciated.

    In a previous organization I did try the 7 data points of quality measurements from attrition, promotions, performance reviews, HM and pulse surveys, etc, but it was way to complex. After hundreds of conversations with TA Leaders and first hand experience, I landed on the FYQ Metric. If your interested in the journey I presented on this a few years back.

  3. Taking that broad approach to a very local business discipline might be the contributing factor to the assumption about vagueness.

    Quality of Hire is not a singular, stand alone metric. Just as new hire performance is not one data point. But there is a systems approach to documenting the way new hires demonstrate their value to the organization.
    Quality of Hire is a measurable and meaningful metric.
    http://www.shakercg.com/quality-of-hire-blog/quality-of-hire-a-measurable-and-meaningful-metric

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