Dive Brief:
- If employers aren't measuring their quality of hires, they should, given the high cost of unsuccessful recruiting in dollars, productivity and morale, according to a new survey by JazzHR, an applicant tracking system.
- Survey results showed that while 64% of respondents said they measure quality of hire, more than a third said they don't track it at all. Also, only 1 in 5 respondents reported measuring candidates' quality before hiring them; more than half said they don't start measuring quality until 90 days into the recruiting process.
- To measure it, JazzHR recommended that employers: 1) define what "quality" means to them; 2) quantify the criteria for a job by assigning each a numeric value; 3) collect data and set a timeline; and 4) track quality to determine their organization's return on investment.
Dive Insight:
The current state of recruiting establishes a solid case for considering quality of hire, as shown in a 2019 study by Kronos and The Human Capital Institute. The study of 234 HR leaders found that with the talent shortage and historically low unemployment rate, the number of unfilled hourly and salaried positions grew during the last two years. More than a third of respondents said positions take longer to fill. In turn, hiring costs have escalated due to longer vacancies and rising wages in the competition for talent.
Employers can't afford to make a bad choice. Based on calculations from Thrivemap, replacing a bad hire can cost an employer with 500 workers a 5% increase in headcount and a 15% hike in turnover, for a total of more than $500,000 a year. The calculations also cover the costs of lost productivity, advertising and agency fees.
Experts previously told HR Dive that employers also can avoid miss-hires by:
- Conducting robust interviews that include different people with experience in the job.
- Using metrics related to the job.
- Thoroughly reviewing the candidates' references.
- Communicating the company culture to candidates.
