I’m hiring a lot but I have no idea if I am hiring the people I need

Here are 3 ways to calculate and monitor quality of hire and recruiting effectiveness. Trust me, it is no rocket science.

Just this week I was mentoring a young Recruiting Manager who had impressively managed to hire 100+ technology professionals in a single quarter— and in this job market — while building his own team and the company’s hiring process almost from scratch. Over the past year, the scale-up where he works more than doubled its workforce. As most scale-ups, though, right when the hiring frenzy left the spotlight, they saw their sense of pride and amazement for their new dimension quickly turn into the urgent need to be sure of having hired the right people. And, guess what, they had no mechanism in place to figure it out.

This situation has got me thinking that, although too many companies have no objective way to measure their quality of hire, it should be no rocket science to know whether they hired the people they needed and what aspects of their job design, recruiting process and onboarding can be adjusted to improve results. In the end, quality of hire is about recruiting effectiveness.

So here are 3 ways my teams and I use or have used in the past to measure quality of hire: from the simplest to the most complete (and therefore more complex and demanding).

The Re-hire Test

Forget that lengthy form — that 1% of the people actually fill in — inquiring how satisfied the hiring manager is with the hiring process and with the recruiter’s service. I am talking about asking the hiring manager whether the person hired is performing as expected.

In order to reach maximum engagement, we go simple and plain: once an employee finishes their first 8–12 weeks, I reach out to the hiring manager on Slack (yes, Slack) with the following message:

Hi there, Mary! John, who you recently hired as Software Engineer, just completed his first 12 weeks with us and it is critical for the People team to know how he is doing. At this point, a yes or no answer to the following question will suffice: knowing what you know now, would you have hired this person again if you had the chance?. If your answer is somewhere in the middle, please respond “no”. And, if I don’t hear back from you in 2 business days, I will assume your answer is “no” too. For your context: your answer is confidential. It serves 2 purposes: 1) we aggregate it with other answers and use it as feedback about our hiring and onboarding effectiveness, and 2) it may be used by the People Partner who supports your team to help you revert any poor performance we may have among new employees at this stage. I appreciate your participation and honest answer!

From my experience, more than 90% of hiring managers reply — and reply honestly. But, of course, people’s openness to initiatives like this depend on the company’s culture and on the trust established between the People team and the leaders it serves.

New hire turnover

I use to say that the behavior of a person who leaves a company within 6 months of joining is something like “Hi, guys! Let me see what you got here… Oh, my. Oh, no. I want nothing to do with this. Bye”. A reaction like this has recruiting mistake written all over it. It does not mean necessarily that the recruiter is to blame, but rather that something in the hiring process is broken. It may be something as complex as the job design that unfolded into the assessment model or something as simple as how they are pitching the experience to prospects and candidates.

So if your new hire turnover is higher than zero, you should check out what is going on. Recruiting teams should partner with Employee Experience or People Analytics teams to monitor this indicator and use the insights they generate to change the way they hire. You’re in an early stage company and there are no EE nor Analytics teams? No problemo. Look people up on Slack or whatever directory-like tool your company uses. If people are not there, there is a good chance they already left — and there is the information you need.

Correlation between performance in interview and on the job

Now this is my absolute favorite because it actually helps the company realize if their hiring process is effective at all and if it is able to differentiate high performers from normal performers. In other words: is all the talent hunting and countless hours interviewing paying off or should we just flip a coin and hire the candidate if we get heads?

The proposal here is to actually compare employee’s interview score to the result of their first performance review and calculate the correlation between the two. Most companies — and I say it with some degree of certainty — will find way too weak a correlation between performance interview and on the job performance. Not too long ago I calculated it for a company. The result? r = 0.007. This is no correlation. Zero. Zilch. Nada. We are now working on figuring out why and how to raise this number to something closer to 0.3 or 0.4.

This option is a tiny bit more complex because it envolves some level of maturity in people processes and data analytics but, I promise, it is not as complicated as it sounds. A good UX Researcher, a Product Manager or a Business Analyst may help you put together the method, the database and the analysis itself.

So now you have 3 ways to measure recruiting effectiveness. Do me just a simple favor and do not stop at calculating the number. The number is like a thermometer: it gives you a general idea of how normal or abnormal things are but will not tell you the cause of any issues nor how to solve it.

You should identify a few hypothesis for the issues found and test them until you discover the root causes or key drivers behind the results. I will leave you with some food for though:

1. Your scale-up hires for generic roles, not for specific challenges. In practice, this sounds more like “bring me an Acquisition Manager” and less like “bring me someone who has track record developing and delivering a large-scale customer acquisition strategy from scratch using online marketing tools and has enough stakeholder management skills to help us bridge the vision among Sales, Marketing and Branding”.
2. Your hiring process is not intentional in evaluating the skills necessary for the particular job. It means no one actually gave some thought into what are the skills, abilities and knowledge necessary for a person to deliver the job well — let alone embed it to the evaluation process.
3. Your interviewers are not subject matter experts, meaning they may be the people who are higher in the hierarchy, but they are not necessarily the ones who master the skills they are supposed to evaluate.
4. Your interviewers adopt unstructured interviews or trendy-yet-useless methods. Recent research literature shows that structured interviews are one of the few methods that actually reach higher correlation to job performance (varying from 0.3 to 0.4 depending on the research). And, please, don’t get me started with how awful the usage of brainteasers in interviews are.
5. You do not evaluate candidate’s motivation to join your company and therefore are completely blind to whether you can deliver the experience they expect from you. Another side of the same problem is you oversell the experience you can provide.
6. Your onboarding sucks. It overloads new hires with bureaucratic information but lacks to equip them with what they actually need to deliver great performance: great understanding of the culture, of the role, of the expectations about them during the onboarding and beyond and how they will monitor progress with their leader.
7. Your hiring and performance evaluation processes are looking at different things — so the only way your hiring efforts will deliver the expected performance is if you are all great friends with Chance.

These are, of course, just a few possibilities of what may cause low quality of hire. Performing these analysis and improving hiring effectiveness is a topic for another story entirely, one that I expect to write in the future. In the mean time, I hope you have found some inspiration on simple (but not comprehensive) ways to track quality of hire and recruiting effectiveness.