Which KPIs Matter When Hiring?
When it comes to key performance indicators — a critical continuous improvement activity in any organization — results are what matter. KPIs must be directly linked to business goals and the responsibilities of every employee to achieve them.
The KPI Process
The basic premise behind KPIs and CI is what cannot be measured cannot be improved. To ensure success, a company must continually refine, adapt and measure its business models – including recruitment – to deliver on results. This involves:
- Determining which KPIs are important for the job function and the business.
- Including KPIs in recruitment and performance plans.
- Establishing effective processes to monitor KPIs.
- Analyzing resulting numbers and recalibrating strategies as needed.
The most effective hiring decisions are based on a comprehensive plans composed of historical, real-time and predictive metrics. These include:
- Performance levels and dollar impacts of hires: Also known as a “quality-of-hire” data, this measures the actual on-the-job performance of new hires. These metrics should be designed to demonstrate that new team members produce at levels significantly higher than those of the average employee.
- Project delays due to weak recruiting: This information is calculated via surveys of project managers to determine whether any initiatives have been negatively affected by weak recruiting. Barometers include number of project delays, days lost and the cost of these bottlenecks.
- Excessive vacancies in key positions: Every day that a key leadership spot is open can be damaging to a company’s performance and/or reputation. Every day that a revenue-generating position is vacant hurts corporate revenue.
- New hire failure rate: The worst hire of all is the one who must be terminated within six months. Failure analyses should be done immediately to determine what went wrong and what the cost was to your organization.
- Percentage of innovators and game changers hired: If you want to dramatically improve your business’s rate of product improvement, determine whether your recruitment process is successfully hiring innovators and game changers. Get this assessment from managers six months after a new hire. If expected standards are not being met, a reassessment is warranted.
- Quality candidate forecast: Your recruitment team should gather data and accurately forecast whether there will be a shift in the availability of quality candidates during the next three to six months. This will allow you to change your hiring plans accordingly. Market intelligence should show whether or not your key competitors will be hiring. Hiring managers should be appraised of the probability that individuals on their “most wanted list” are likely to enter the market.
Identifying KPIs in Candidates
Before you hire, determine whether a candidate has the potential to be a top performer. Historically, only 20 percent of the average corporate workforce meets this expectation.
- When interviewing, find out which results a candidate has successfully achieved in their prior positions. Use behavioral questions and ask for specific examples and measurable results.
- A true performer will know their results and be able to articulate them quickly, simply and readily. If they “can’t remember” or try to convince you that it will be very complex, take that as a red flag.
- Top performers don’t need constant supervision. They can envision results even before a project beginsand they are constantly focused on results versus barriers. Their natural instinct is to measure outcomes so they can make them better.