Hiring Process Quality
One of my regular newsletter feeds, Human Resource Executive Online, had an article this past week entitled Hiring-Process Quality Drops. I was intrigued, and read through, including looking at the source material, a study by PriceWaterhouseCoopers on the State of the Workforce. The metric cited as evidence of hiring process quality was first year turnover. Apparently, this statistic is measured and reported by many companies, and had been in a downward trend line (the good direction for this stat) for many years, but reversed itself in 2012. It went from 21.5% in 2011 to 22.6% in 2012, not a particularly alarming increase.
I was reminded of John Sullivan’s articles on employee turnover, in which he opines that not all turnover is bad, and that low turnover could mean you have “ugly” (poorly performing) employees. Both of Sullivan’s articles point out that retention just means that people aren’t leaving – it doesn’t mean they are doing you any good!
So, in my humble opinion, measuring hiring process quality by first year turnover is ludicrous.
I did a little looking for additional info on this topic, and found a much better take on it by Shanil Kaderali in his article How to Measure Whether You’re Hiring Good People. This is a somewhat complex article, but it is worth puzzling through, because Shanil’s point of view is very compelling. The quality of hiring is based not on turnover, but on how well the people fit after 6-9 months on the job, and very importantly, on how productive they are.
Let me add to this that the best way to determine how productive someone is, is to define what success would look like well before the hire. Using a performance-based approach, and defining the objectives and metrics before hiring ensures that any employer has a way to determine hiring process quality that would be far more meaningful than first year turnover.