Measuring quality of hire can be a highly complex process, or a relatively simple one, depending on how deep you want to go with it. But make no mistake, it's an extremely important pillar in your efforts to measure and validate the ROI of recruitment marketing strategies and technologies. In fact, it's the cornerstone of an important metric for measuring recruitment marketing ROI called Cost Per Quality Hire (CPQ).
You can learn more about CPQ in Talemetry's new free eBook, The Recruitment Marketing ROI Handbook.
How important are recruitment marketing strategies and technologies to your overall quality of hire?
Brandon Hall Group did a recent study that found that organizations with greater recruitment marketing capabilities experienced 31% better quality of hire.
If you are tracking quality of hire metrics, you should have a threshold for what you deem a quality hire. The simplest example of such a threshold is year one retention. Simply subtract year one turnover from the overall number of hires. The retained hires would be deemed quality hires in this example.
However, you can and should get more sophisticated in how you determine a quality hire. Manager satisfaction and time to productivity metrics can also be key components of a quality of hire index that measures the multiple facets of retention, satisfaction, fit, performance, and productivity.
No matter how you measure it, CPQ is calculated by dividing your recruiting budget by the total number of hires minus the number of hires below the quality hire threshold.
With the CPQ metric in mind, let's review some key aspects of recruitment marketing and how they work together to support increased quality of hire (and lower CPQ).
Proprietary, Shared Talent Pool
One of the foundational strategies of recruitment marketing is centralizing all candidates in a proprietary talent pool that can be segmented by key job family and shared amongst all your recruiters. This is typically accomplished with a Candidate Relationship Management (CRM) system. Why is this important?
- It leverages all your candidates, applicants, and other talent with interest in working for you, across your entire recruiting team for greater access and efficiency.
- A shared talent pool ensures that once you pay for a candidate (resume download, job ad, agency submission), you own that candidate and can remarket to them as needed.
- LinkedIn has a proprietary talent pool that you share with every other employer in the world. You should have your own that no one else has access to.
- Your talent pool enables you to educate, nurture, and forge relationships with talent prior to need.
- It speeds your time to fill, as new requisitions can be matched to your talent pool and you have instant candidates for the job.
- As your talent pool grows, you can become less reliant on paid sources for candidates, reducing your talent acquisition expenses.
These are just a few of the reasons that CRM is a foundational recruitment marketing strategy and technology.
CRM and Quality of Hire
With the right talent acquisition strategy and strong processes, this centralized talent pool presents a major opportunity to positively impact quality of hire. The key is to understand your core job families and the type of talent that your organization needs for each family.
This is done by gathering feedback from hiring managers and combining it with the objective performance characteristics of employees who are excelling within your key job families. Then, create personas that define core characteristics of the type of talent you want.
Once you have a good idea of what your ideal candidate looks like for each key job family, the objective is to stock your talent pool with candidates that fit within that general skills, competencies and other characteristics you've identified. Of course with all your talent acquisition channels and sources feeding into your CRM, there will be chaff with the wheat. But with a good recruiting CRM, you can search, segment, and pipeline your best fit candidates against the appropriate jobs.
You've, in a sense, modelled your ideal workforce into your talent pool. And when your recruiters source from your talent pool, they can't help but run into high quality candidates. Certainly better candidates than they would get broadcasting jobs to social media, job boards, and the like.
And with this approach, all your ongoing recruiting activities continue to add to and refine this proprietary talent pool, giving your organization increasingly easier and faster access to the kind of talent that will boost your quality of hire.
The Quality of Hire Payoff
Imagine the productivity increases you could see with 31% better quality of hire. And think about how much less you could spend acquiring that talent as your centralized talent pool attains critical mass, becoming a low/no cost source of most of your new hires.
No need to imagine. You can measure it yourself and watch your CPQ, and your entire recruiting budget, shrink significantly.