Staffing firm image

Quality of hire: What, why and how

Jeremy Hiring

Most staffing businesses understand the value of metrics and reporting to their bottom line. However, most conversations about reporting features center on efficiency metrics to optimize output. Such metrics include time to hire and cost per hire.

A number of firms also track metrics related to candidate effectiveness, but the practice is less common.

It's important not to leave out metrics related to your No.1 commodity: your talent. Candidates are the commodity staffing firms sell, so it's crucial to have a way to measure quality. In short, agencies that measure candidate effectiveness become more competitive businesses. With the skills gap growing wider, companies now look for staffing agencies based on the quality of their talent. The agencies with the best roster of talent will win more business and earn higher placement fees for each candidate.

"Companies now look for staffing agencies based on quality."

Naturally, coming up with a reliable way to measure candidate quality is easier said than done. To a certain extent, this metric will always be somewhat subjective, depending on the eye of the beholder. However, there are ways to gauge candidate effectiveness:

Candidates redeployed
This is a crucial metric for success. How many times have your candidates been sent to new positions? Consistently performing throughout various placements demonstrates candidates are effective and likely to continue to make clients happy. According to CareerBuilder, the percentage of candidates redeployed is an essential metric for staffing firms. Currently, less than 6 percent of firms keep track of this metric. It's important to track this number for several reasons. First, your continuously deployed candidates are your best asset, and you will want to study them to see how you can replicate their success. The more redeployed candidates you have, the better your overall recruiting program is likely to be.

Client experience
It's important to look into client experience. A candidate may look great on paper, but may not fit into the work environment they've been placed in. Success is more than just numbers, and asking for client feedback is one way to find out which candidates are truly effective on the job. Right now, overall client sentiment is low across the industry. CareerBuilder and Invaro's Net Promoter Score for client satisfaction, an index that measures the willingness of customers to recommend a company's products or services to others, recently dipped to -3 percent. It's crucial to continue to look at overall client experience to determine how well your candidates perform and bring this number up.

Candidate interview image What makes a high-quality candidate?

Sourcing channels
It helps to bring in great candidates from the start rather than being forced to weed out low-quality candidates later on. By keeping track of where the best candidates come from, you can continue to add great talent to your pipeline. Learning where your best people come from can help you focus more effort in the right place. If referrals and specific job boards tend to bring in high-performers, stick with those sources. Measuring candidate quality starts as early as the recruitment process.

Utilize a scorecard
Staffing expert Lou Adler of Lou Adler Group suggested using a performance-based scorecard to determine pre-hire quality of candidate. When recruiters use a pre-hire scorecard, they can gradually eliminate sourcing problems to ensure only the best candidates come into the pipeline. For instance, if one recruiter consistently brings in talent lacking in one area of the scorecard, the agency can help them adjust their methodology. Once the job is over, you can use the same scorecard to determine their aptitude post-hire. You can also compare these two scorecards for more information and gain key insights.

Candidate performance assessment image It's important to assess candidate performance.

Here are a few other metrics to consider:

  • Ramp up time: How long did it take for the new hire to get up to speed? Was it quick or longer than average?
  • Job performance: Measured by performance ratings or objective data, depending on the industry or position.
  • Engagement/cultural fit: Did the employee feel happy and engaged in the position and did he or she fit in with the overall culture?

A combination of these scores can help agencies derive a larger candidate quality score to help them measure each candidate more effectively.

Measuring candidates from start to finish helps you create a well-oiled staffing machine. Candidate quality isn't just about individuals – it's about the process your agency uses to recruit and onboard. If quality is low, it might be your process that's to blame. Measuring how good your candidates are might not seem like the most pressing metric, but at the end of the day, it's the quality of your talent that sets you apart.