The Wild West of Hiring: What, why and how to measure results
A brief guide to making great hires and measuring your success
An entire new industry of vendors has sprung up to answer your every question about hiring talent. Employers are spending about $20 billion a year on these new tools — most without knowing whether they work. Recruitment has moved into the Wild West, according to Wharton’s Peter Cappelli in his May Harvard Business Review article, “Your Approach to Hiring Is All Wrong.”
Amid all this opportunity and confusion, start with this question: How do we know whether our practices lead to the best employees? Meaning the people with the most talent and right culture fit —the ones who will help reach your full competitive potential. For that, you need a process that measures what’s working (or what’s not) and tells you what to pay attention to as you move forward. Measuring is the only tool that enables you to influence outcomes, either positive or negative. Without it you’re moving blind.
Below is a short guide on the questions you should ask, why you need to ask them and how to go about measuring whether your recruitment processes are working. The guide is based on over 15 years of firm experience working with companies of all industries and sizes throughout the country — and on finding our own way through this maze as we’ve grown.
A brief guide to making great hires
The secret to successful recruitment is to maintain a sales mindset. Our advice always begins with: “treat candidates like you do customers.” You’ll be among a small minority of companies that monitor whether their hiring practices are working, which will put you way ahead in the talent war.
Typically, and unfortunately, most companies don’t think of hiring as an investment. It is, in fact, both an investment of money and time; and what you put into it is a strategic business decision. You should have a structure in place that answers the following fundamental questions:
- The marketplace. How do you stack up compared to your competitors? Are your compensation levels and perks fair and trending with market expectations? Do candidates compare you positively to competitors in relation to compensation and culture? Do you check Glassdoor, Indeed, and other “feedback” social media sites frequently? Do you act on what employees and/or the market is saying about you?
- Cost to hire. What are you investing in the hiring process, from initial outreach, interviews, background checks/pre-offer, offer and hire, to start date? Is it enough, or are you wasting too much money on practices or resources that don’t work for you?
- Time to hire. How long does it take to fill your open positions? Are there avoidable delays? What is this costing your business in terms of missed sales, lost customers, inability to move your strategic objectives forward, and employee burnout/attrition from overwork? Are you communicating frequently with your candidates throughout? (And remember: Fast does not always mean best.)
- Time to productivity. How long is your onboarding and training process and is it too long or short? How effective is it in terms of reduced on-the-job errors and employee/supervisor satisfaction?
- Candidate conversion. Where are your best candidates coming from? Are they active (looking for jobs) or passive (not looking but open to opportunities)? How many are referred by employees? Which schools provide the best performing candidates at the lowest compensation? How many candidates do you lose in the hiring process and why?
- Culture fit. How do you assess culture fit with interviews and assessments? Do current employees have an accurate and consistent view of your values and what they mean in terms of workplace behavior? Do turnover and exit interviews reveal that lack of culture fit is an issue?
- Adverse impact. Are your hiring practices valid and meaningful, ensuring that you are protected from unintended discrimination or adverse impact claims? How many claims have you had in the past? What have you done to ensure that your culture and practices are open to all strong candidates, according to law?
- Use of recruiting tools. If you are using job boards and other tools or outsourced recruiters, what are the costs monthly and annually? Are these resources scalable as your business needs evolve? Are their reports understandable and actionable? Do they produce high-quality candidates and clear results?
- Testing. Are you using tools that provide both quantitative and qualitative information about candidates? How successful are they in predicting good hires, including skills, attitude, and cultural fit? How do you control for bias?
- Turnover. What are your turnover rates and how do they compare with others in your location or industry? Do you conduct exit interviews with every employee to understand why they are leaving? Do you check with employees regularly about what they like and don’t like about working for you and do you act on some of their suggestions?
Answers to all these questions help ensure that your approach to hiring is right. You’ll find answers through a combination of surveys, interviews, assessments and/or tracking software. If you’re using outside resources, their reports will provide additional data and insight.
Use the information to determine where and how much to invest in your recruitment budget and what areas you need to focus on to improve and update your practices. True success is measured in candidate quality, acquisition costs and conversions to long-term employee. Understanding how your practices impact the quality of your hires is among the most consequential aspects of business today.
Process is King
Although it’s true that we can’t measure some of the things we value most, the adage, “we manage what we measure” is also true in business. It’s important that we pay attention to both skills and attitude, experience and culture fit, character and personality. A well-defined hiring process based on data and punctuated with personal observation helps us choose the right people.
As was said in the Wild West, “It don’t take a genius to spot a goat in a flock of sheep;” It takes a process.