Monday Metric: Uncovering the Value of Employees through Quality of Hire

mountain_quality_of_hireIt’s been said many times, but the people a company employs are its biggest asset, and the value your top talent brings to the organization cannot be understated. Given this fact, why are companies always trying to cut costs in their talent acquisition strategies? Putting less time and resources into the recruiting process can have the opposite effect – if the wrong people are hired, the company must then put greater time and resources into finding their replacements.

So what can be done to convince the executive team to support a robust recruiting strategy? The answer lies in considering your quality of hire.

This metric will provide deep insight into the effectiveness of the talent acquisition program, far beyond the typical cost per hire rate that’s typically used as a performance indicator. Focusing just on cost of hire provides little insight into what happens after the candidate is hired and brought on board; as a result, the company misses the opportunity to link on-the-job performance back to the hiring process.

As the hiring landscape will only become more competitive, now’s the time to move beyond this short-sighted strategy and measure quality of hire, or the monetary value a high-performing employee contributes to the organization. Just as the company measures Customer Lifetime Value (CLV) to determine the productivity of customer acquisition efforts, recruiting must be viewed through the same lens. By calculating Employee Lifetime Value (ELV), employers can link recruiting to performance metrics, thereby driving strategies to improve talent acquisition efforts.

Knowing the ELV enables the executive team to visualize the value of acquiring a top performer and their impact on the company’s revenue stream. It also enables you to avoid the trap of viewing talent acquisition as a singular task – finding the next hire. Instead, it can become a robust, comprehensive function focused on continually bringing the best people on board and measure their contributions throughout their tenure. At the same time, by understanding this insight, you can identify the qualities of your top employees and adjust recruitment strategies accordingly. For instance, by knowing the qualities that make your best salespeople successful, the recruiting team can adjust its interview questions to ensure they assess candidates for the right attributes. Moreover, coupling quality of hire with source quality data, you can invest in the sourcing efforts that best contribute to long-term company objectives.

Finding the right talent to take your company to the next level is a priority for any organization. But by focusing on key metrics, your recruiting team will have a significant competitive advantage. Measuring quality of hire – the value employees deliver – provides the insight needed to link recruitment to real business results, enabling you to continue hiring the people who can have the biggest impact on company success.

5 Talent Metrics For Effective Recruiting

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Recruiting Metrics