Topgrading

 

ERE.net is a popular networking and learning site for recruiters.  The site publishes Excellence Awards annually; there were seven award winners and seven runners up for 2010.  A description of the awards, winners, and what they did in 2009 is in a four-part article on their site.  Links to the article: Part 1   Part 2   Part 3   Part 4.

 

Winners were divided into seven categories - Employee Referral Programs, Employer Branding, Corporate Careers Website, College Recruiting, Excellence in Retention, Strategic Use of Technology, and Overall Award Winner

The list of winners and the best practices they have implemented are great resources for those of you in Human Resources and business leaders who have HR people reporting to them.  It is  a nearly comprehensive list of the things a great HR Department could and should be doing…but one metric is conspicuously missing from the criteria upon which companies were judged.  The missing metric is Quality of Hire.  In other words, when someone was hired, did that person turn out to be an A player or not?

The best practices that are described are all fantastic and seem to be valuable, but without measuring the most important outcome, whether or not more A players were hired and retained, those activities could possibly be just that, activity.  Mishires cost all organizations a lot of money (5-15 times each mishire’s base salary).  Reducing the number of mishires an organization experiences by improving Quality of Hire metrics presents the best opportunity for human resources to add tremendous value to an organization.

Given that a mid-management mishire ($100K base salary) costs an organization around 15 times that person’s base salary, if human resources can help the organization avoid even one mid-level management mishire, it could potentially save the company $1.5M!

Quality of Hire is THE metric that any recruitment activity should be measured against, because it is the metric that, when improved, will return the greatest value to the organization.  Further, it is not that difficult to measure.  A year after someone is hired, the hiring manager, a human resources professional, and usually the hiring manager’s boss meet to discuss whether the individual met or exceeded performance goals (or not) and whether or not the individual exhibits the organization’s values (competencies).  If the answer to both questions is “Yes,” that person was a good hire and the activity that went into recruiting and hiring that person was valuable.