As we prepare for the publication of the 2011 Staffing Performance Benchmarks Report, we will take a closer looks at each of the five ‘Optimum Staffing’ metrics.
Staffing Performance Metric #1 – New Hire Quality
Quality is the first and most important recruiting metric. It is something that people often stand up for, saying that it should command attention and be measured. The difficulty lies in defining quality to a point of mutual agreement and then finding a method for assessing something that is obscure, and by nature, difficult to identify. While acknowledging these difficulties is important, it is more important to avoid letting them interfere with assessing the quality outcomes of your operations. Like Customer Satisfaction, the New Hire Quality metric cannot be defined by a specific formula. Instead, it is defined mutually by both staffing and business stakeholders.
The standards for New Hire Quality should be determined by the hiring manager before recruiting is initiated, and the quality measure taken within the first 90 to 180 days of employment. This is after the easiest and hardest periods of new hire assimilation, and also before organizational influences significantly impacts the rating.
The simplest strategy is to ask the hiring manager to review the criteria established prior to hiring and answer the question: Compared to pre-recruiting requirements, how would you rate the new employee today on a scale from 1 to 5?
It can be argued that out of all staffing the metrics discussed, New Hire Quality is one of the most important ones. Routine surveys conducted by organizations including Optimum Staffing found that over 19,000 C-level executives rated new hire quality as having the highest level of importance when compared with over twenty other HR metrics (9.6 on a ten point scale). Twelve years ago, over 90% of organizations in the U.S. insisted that New Hire Quality was critical, yet less than 2% of them were making any attempt to measure it. In that same report, respondents were asked to prioritize their metrics foci for next year – over 58% selected quality; more than any other choice. Today, over 40% of organizations have some sort of New Hire Quality measurement.
Despite agreement by both CFOs and chief HR officers that people and talent are crucial, it’s somewhat surprising that organizations have been slow to measure the quality of their new employees.
One approach to initiating (or enhancing) the measurement of staffing performance in your organization is to design a comprehensive initiative that puts all recommended metrics into place and tracks data for recruiting and hiring organization-wide. However, designing and implementing a comprehensive initiative from scratch can be a daunting task, especially if your organization is new to performance metrics. To get started and introduce performance metrics to your organization, we recommend using a phased approach.
The benefits of a phased approach are as follows:
Our four phased approach for implementing a performance measurement program in your organization is as follows:
Phase One: Detailed Data Analysis
Phase Two: Consult with Stakeholders, Negotiate Agreements
Phase Three: Begin Tracking Data
Phase Four: Report Your Findings
For more information, reference our 2011 Staffing Mission, Objectives and Metrics Toolkit which contains the full guide to the implementing a performance measurement program using a phased approach along with the tools and templates necessary for success. The Toolkit is included free as part of the 2011 Staffing and Performance Benchmarks Package.
As part of our 2010 Staffing and Performance Benchmarks Report, a group of participants were asked a series of questions regarding the use of staffing metrics within their organization. The results are as follows:
Regardless of how the general lack of measurement can be explained, times are changing. With the rapid increase in globalization and e-commerce, the acceleration of labor market competitiveness and technological advances that make numbers-driven, results-oriented information accessible to everyone, measurement will be the report card of how departments like staffing and HR will be gauged. The instruments to measure, track, report, and analyze are also becoming more common and effective.
Metrics are even being used by executives in top-performing organizations to measure their high-quality performance. This goes to show that savvy professionals realize results-by-numbers is not reserved for the finance department. Metrics are what allow them to establish business-partner relationships with the CEO, clearly show how they contribute to the company’s bottom line, and illustrate how well these executives use the resources granted to them to generate revenue and improve profitability.
The lesson is clear: obstacles to measurement must be understood and overcome. Measurement need not be overwhelming and daunting. A good place to start is our 2011 Staffing Performance Metrics and Benchmarks Package which contains the resources to help you “get out of the gate” and get started on your metrics programs including:
Will 2011 be the year that your organization starts to measure staffing performance?