So we all talk about Quality of Hire, but is there an ROI for Quality of Hire measurement? Turns out there is. A strong ROI.
But first, you have to measure QOH to understand where it stands in your organization. Most recruiting leaders have a good general sense of it, as in “it could be better,” “it’s pretty good,” or “it’s dismal.” But in our experience, your sense is often wrong. And if you’re in a larger company, it’s always wrong. Do you truly know what’s happening with recruiters and hiring managers in distributed locations, etc?
So many factors affect quality of hire measurement that, until you’re measuring what it is and how it got to be that way, you’ll never be able to truly impact it.
So the first step is getting a solid solution in place to measure what you’re overall Quality of Hire score is and what factors are influencing it. Easier said than done, until now. Check out Survale’s “always on” Quality of Hire solution.
What kind of gains can you expect to enjoy with a solid program to identify, measure and improve Quality of Hire?
How about millions of dollars in cost reduction and productivity gains?
Improving your Quality of Hire pays back in a couple of key area including:
Time to Productivity
If you are truly measuring and improving Quality of Hire, you will be monitoring your time to productivity. The better your hire, the faster they’ll get up to speed and contribute. This is a bedrock Quality of Hire measurement.
If your time to productivity is currently 90 days, and you read and react to your Quality of Hire metrics and manager satisfaction feedback, you can shave 10% off your time to productivity. Just take your average revenue per employee figure (ask your CFO – it’s a standard business metric), divide it by 365 and multiply it by the days you save. For example:
($235,000/365) X 9
In this case, your 10% time to productivity savings is 9 days and adds up to $5,800 per employee. If you hire 100 people per year, that’s $580,000 annual savings!
($235,000/365) X 9 X 100
New Hire Turnover
If you are measuring and improving all facets of Quality of Hire, including cultural fit and manager satisfaction, your new hire turnover will go down. That’s important because studies show that as much as 40% of turnover happens in the first six months of employment. What’s also critical is being able to track onboarding effectiveness and hiring manager feedback. While most recruiters gauge their success with QOH metrics, the reality is that what happens after is commonly a black hole for the recruiting department.
So when it comes to new hire turnover, the generally accepted average cost per hire is $4,000 for every new hire (Note: Since this article was written, SHRM has upped that number to $4,700), If you hire 100 people per year with a 70% year one retention rate and improve it by 10% (7 less turnover), you’ll save $28,000!
Now how long would it have taken you to rehire for these seven retained positions? Using the above calculations for 90 days of lost productivity, you won’t be experiencing the $604,000 in lost productivity, making the total savings $632,000!
Quality of Hire Measurement Intangibles
Getting more high quality, highly compatible employees into the workforce rubs off! When other employees work with these individuals, the results can be inspiring. We all know that we get more done when the people we rely on consistently come through. By the same token, working with highly competent people drives us to do our best. The positive effects of increasing your Quality of Hire ripple through the organization in extremely compelling ways.
So do you accurately measure Quality of Hire to pinpoint areas of improvement? Do you monitor key metrics like time to productivity, turnover and onboarding effectiveness, and then map them against manager and new hire feedback to constantly improve who and how you hire? Survale can help! If you’d like a free Quality of Hire ROI evaluation, you can contact us here. Or, take a moment now and see exactly how Survale automatically gathers feedback and tracks quality of hire automatically in this short video demo.
Save some money, increase productivity and show your organization that your recruiting team is way out in front of helping your company thrive!. Make Quality of Hire measurement your #1 KPI and get a program together to make all aspects of it tangible, manageable and improvable!