It’s a new age of work, in all senses of the word “new.” The office environment is no longer confined to a physical space; employees are demanding better work-life balance, and want more flexibility from their employers. As companies look for ways to improve hiring and retention, many will have to start by unlearning the ways they have done things in the past.
Let’s explore why focusing on the quality of your hires has become the smartest recruiting strategy for companies to implement, and why leaders need to listen closely to what candidates expect out of the interview process in 2022.
How the Great Resignation has increased hiring and recruiting pressure
The Great Resignation has no end in sight. Record numbers of employees continue to leave their jobs in search of more professional freedom, a healthier work-life balance, and openings at organizations with missions that align better with their personal ideologies. As of the beginning of 2022, 4.3 million employees have quit their jobs.
For hiring and recruitment teams, the pressure has never been greater to attract top talent — but this can lead to mishiring or choosing candidates who aren’t the right fit in order to meet hiring quotas. This does a disservice to the organization (think: higher hiring and recruitment costs and increased turnover rates) and the candidate. Mishires are estimated to cost companies 5-27 times an employee’s annual salary, factoring in recruiting costs like advertising, internal employees’ time, and training costs. And in the United States alone, mishires cost businesses $1 trillion annually. Recruitment efforts need to be redesigned to better fit the needs of the modern workforce and ultimately result in hires of greater quality.
Recruiting goals are misguided and costing companies money
Employee recruitment in 2022 looks a lot different than it did a few years ago. Start by revisiting your recruitment goals.
- How does your recruiting team feel about current hiring quotas or interview quotas?
- How have recent candidates performed after 30, 60, or 90 days?
- Where could optimization or automation support your team in achieving their goals?
By taking a look at hiring metrics and existing processes with a fresh set of eyes, you can uncover more opportunities to match quality hires with open roles.
Setting realistic recruiting goals allows hiring teams to refine their processes and better serve recruiters and candidates.
Strategic recruiting goals may include:
- Quality of hire
- Employee satisfaction
- Number of employee referrals
- NPS of the recruiting process
Re-evaluating recruiting budget allocations
To lower your cost-per-hire, take time to revisit your recruiting budget altogether. Re-calculate ongoing recruitment costs, estimate your total number of hires, and draft a new recruitment budget based on your current projected workforce needs and your new recruiting goals. For example, a talent acquisition platform can reduce hiring costs and improve the candidate experience.
The human cost of rising hiring demands
Besides inflating your budget, working toward outdated or misguided recruiting goals also has a human cost. Rising hiring demands place increased pressure on already overworked and under-staffed recruitment teams — especially at organizations who are experiencing higher than usual turnover rates themselves. But when a candidate is hired who isn’t the right choice, it impacts them as well. They might move, which leads to moving-associated costs and the mental burden of relocating themselves and their families, or make new childcare plans which can take months to set up.
While switching jobs can be extremely positive for mental health, especially when folks are leaving a toxic micromanager or stressful work environment, the job search itself can also have a negative impact, with more than half of people feeling that they “lost their identity” during the job hunt process, and 56% experiencing more mental health issues like anxiety or depression.
According to the Owl Labs State of Remote Work Report from 2021, those who quit or were seeking new jobs were looking for:
- Better career opportunities
- Better work-life balance
- Better pay
- Lower stress
Gallup data shows that millennials are most likely to seek out new roles that better use their qualifications and have a higher income.
Being more thoughtful about the recruitment process can lead to a more inclusive and positive experience for all involved.
How can companies make sure they are hiring the right people?
In times of crisis, hiring the right people takes some creativity. To make informed, sustainable hires, recruiting teams need to rethink their entire hiring process from the first point of contact to the end of the employee training cycle and one-year review.
And to do that, you’ll need to think about your overall company goals and how they relate to hiring goals. Are your goals well-defined? Do all teams agree on the goals and are they shared transparently across the organization? Every aspect of the hiring process, including assessments, job requirements, time to hire, and other factors need to be tied to goals and business outcomes.
For example — can your organization show that you’re hiring better salespeople and increasing company revenue? Do new hires feel aligned with your organization’s mission, vision, and values, leading to an increase in overall company productivity and retention rates?
To get there, invest in vetting prospects and map every recruitment strategy to recruiting goals. Set up team goals connected to business outcomes and frequently meet with heads of every department to discuss employee engagement and experience.
In addition to having a strong foundation for recruitment efforts, embrace simple, low-cost recruitment strategies — like maintaining an updated website with accurate job descriptions — so that teams are able to increase hiring efficiency and use less of their company’s recruiting budget.
Additional ways that companies can ensure they are hiring the right people include:
- Adding a skills-based task to the interviewing process to weed out candidates who may just be good interviewees.
- Having prospective employees meet informally with their potential team members.
- Being transparent about the role you are hiring for during every stage of the recruiting process to set clear expectations.
- Using tools like Crosschq’s AI-powered Talent Intelligence CloudTM to reduce manual tasks and streamline the hiring pipeline.
“Quality of hire” is the North Star of hiring goals
When it comes to overcoming the Great Resignation, quality of hire is everything. However, because it can take multiple years to determine an individual’s quality of hire, it is also one of the most difficult recruiting metrics to measure. Therefore, improving the quality of hire at your organization requires a cross-department joint effort.
What is “quality of hire” and how do you measure it?
“Quality of hire is a way to measure the value each new hire brings to your company and to evaluate their long-term impact in your organization. For example, active employees who join your team for the long-haul add value to your culture and are continuous top performers would be considered having a “high quality of hire.” On the flip side, employees who are hired and then leave their role shortly after and never achieve productivity, would be considered to have a “low quality of hire,” explains Mike Fitzsimmons, CEO of Crosschq.
Measuring the quality of hire can vary depending on your larger recruiting and company-wide goals. For example, if one of your company goals is to build a workforce of loyal employees, you would measure the quality of hire based on the total time an employee spends at your company, but if you are interested in evaluating work performance as the key metric, you might look at performance reviews and output.
Quality of hire metrics
Every organization has different expectations for their employees and it is therefore up to individual companies to choose the quality of hire metrics to track that reflect their own unique expectations and long-term recruiting goals.
Quality of hire is a reflection of a company’s desired outcomes, recruiting goals, and company goals, which can be measured qualitatively. These outcomes or goals may include:
- Company culture
- Candidate potential
- Employee engagement
- Qualitative business outcomes like morale, likeability, team dynamics
Then, people operations and recruiting teams can incorporate all of these attributes into a score that shows how new hires or cohorts of new hires impact the business.
“To use quality of hire, companies should first decide what quality means to them, then collect pertinent data on those characteristics or company outcomes, scale it up, and measure,” says Chris Drake, Head of Data at Crosschq.
The quality of hire formula that can be used to measure candidate performance combines all of a company’s desired goals and helps to predict hiring quality using a unique score that’s specific to the organization:
Quality of Hire = (Employee performance + hiring manager satisfaction + new hire fit)/3
Examples of recruitment analytics used to measure their quality of hire are:
- The results of regularly scheduled employee performance reviews
- The error rate of new hires
- Monitoring retention for individual positions or departments
- Satisfaction level of hiring managers
- Employee turnover rates
- 30, 60, and 90-day employee reviews and retention rates
- New hire fit or culture fit
- Reference quality
- Employee engagement levels
Why measure quality of hire?
When you actively analyze candidate performance and understand employee potential for success, you can proactively address employees at risk for leaving, and identify new hires who have high potential to stay with the company long term.
HR and people operations teams can use quality of hire data to refine sourcing budget allocations and advertising budgets based on the channels that bring in the highest quality candidates. Using talent intelligence software, you can correlate quality of hire data to pre-hire assessments, helping to identify candidates who are the most likely to succeed after hire. This streamlines the recruiting process, shortens the hiring cycle, and can improve candidate NPS.
Improving hiring quality reduces bias and enables a diverse workforce
Companies that take an active role in improving their hiring quality are more likely to have a strong company culture supported by a diverse workforce. Crafting a thorough hiring process at your organization results in increased job satisfaction due to the assurance that the right employees are being hired for positions that are suited to their talents.
When your company is known for its high-quality hiring process, you’ll generate more first-rate candidate interest and improve the overall reputation of your organization. Because after all, the Great Resignation has landed the ball firmly in the workforce’s court. Individuals are looking for job openings at organizations they respect, but they are also on the lookout for a streamlined hiring process.
“By investing in improving the quality of your hiring process, companies can ensure that they are attracting the top talent they are eager to hire. And employees will be more likely to refer friends and promote working for your organization amongst their network,” adds Fitzsimmons.
Reducing bias with data-backed reference checks + candidate assessments
The first step to enabling a diverse workforce at your company is to reduce bias during the hiring process. Hiring bias (intentional or otherwise) has the power to stunt the growth of otherwise thriving companies and lead to a homogenous workforce.
To eliminate hiring bias, integrate bias-free reference checks and candidate assessments into your hiring process. Recruiting teams need to use data-backed reference checks with a standard referral process and remove the need for repeated reference requests throughout the hiring process — resulting in unbiased reference checks.
Another way to reduce bias during the hiring process is to integrate the use of candidate assessments to measure the potential quality of prospects before they’re hired. Using a combination of qualitative and quantitative assessments provides hiring teams with the information they need to make quality hires.
As the Great Resignation continues to redefine the hiring process at companies around the world, it’s up to recruitment teams and HR leaders to update their processes to better fit the needs and expectations of today’s employees.
Do you know what employees need to stay, or are you pushing them to jump ship?
In our “2022 Great Resignation: The State of Internal Mobility and Employee Retention Report,” we uncover how organizations can best attract and retain employees during the Great Resignation, specifically looking at the impacts of internal mobility. Explore all of the insights and data from our 2022 Report here.