Australasian Talent Conference 2013 - Improving Organisational Performance Through Better Quality Recruitment

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Kimberly Hubble presents at the 2013 Australasian Talent Conference in Sydney. Kimberly leads Global Recruitment Process Outsourcing at Hudson Global Inc and shares her expertise on improving …

Kimberly Hubble presents at the 2013 Australasian Talent Conference in Sydney. Kimberly leads Global Recruitment Process Outsourcing at Hudson Global Inc and shares her expertise on improving organisational performance through better quality recruitment. Find out more about the Australasian Talent Conference at www.atcevent.com

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  • Business leaders all over the globe are facing a common conundrum: How do they improve the quality of their hires? The purpose of this report is to help our clients improve their quality of hire. The benefits of doing so include better commercial performance, greater efficiency, reduced staff turnover and, as a natural consequence, a reduction in the negative impact of poor hires.Our research looks at: Importance – How important is the quality-of-hire metric versus other hiring metrics?Frequency – What percentage of organizations are measuring quality of hire?Data collection & analysis – How is this data collected and analyzed, how frequently and by whom? Impacts and Changes – For those organizations that are measuring quality of hire, what are they discovering? What changes to recruitment or other HR processes have resulted from measuring quality of hire? Downstream – long term your staff has massive impact in how your operate
  • There were 246 Talent Acquisition and HR Leaders from organisations around the world. The findings from this research have been collated and integrated with market insights gained from working with clients around the world.
  • Virtually everyone believes it’s important ….In Hudson RPO’s experience, measuring quality of hire has always been important – it is having the capability to effectively measure quality that has been difficult. Survey resultsGiven the business case for improving quality of hire is so compelling, it is hardly surprising that virtually all our survey respondents understood the value of measuring quality of hire: 97% said it was ‘important’ or ‘very important.’  Yet in spite of appearing to recognise the value of such a practice, almost half of respondents (45%) said they had discussed the issue internally but did not have plans in place to establish an appropriate process. A smaller percentage (15%) have a plan but have yet to implement it. Only (9%) – the smallest proportion are not discussing or planning to introduce quality of hire measures.Why? Measuring quality of hire is not as straightforward as people initially anticipate. As they delve into the details of what is required to measure quality of hire in a reliable, valid and useful way, many talent acquisition leaders are overwhelmed by the challenges of data accessibility, system capability and resource availability.
  • Organisations are most often tracking three specific measures:Retention of new hires (82%)Hiring manager feedback (74%)Employee performance appraisal ratings (63%) These findings are consistent across all regions and for companies of all sizes. While new hire performance appraisal and retention metrics can be important measures, they are only as useful as the quality of data collected. If an organisation does not collect performance appraisal information systematically or if this information is perceived to be unreliable, then it loses its value. So employers need to acknowledge the standard of their data before using it to measure quality of hire. Similarly, using employee performance ratings without integrating retention data only tells half the tale; an organisation that hires good people who leave within the first six to 12 months, needs to know more.Very few organisations are tracking measures beyond the top three. Currently most employers that do measure quality of hire, do not differentiate. between quality of hire measures for executives, managers, professional staff, sales staff, customer service staff and so on. To deliver the greatest value, quality of hire must be assessed with metrics including those that are specific to the role being measured.Organisations should be aware that there are many more metrics that could be usefully applied to help create a fuller picture of an individual’s performance at work.Generally HR are doing the measuring and this may be why more financial metrics (such as revenue and profit per employee) are not being used
  • Only around a third (35%) say their systems work ‘fairly well’ or ‘well’ in delivering the data needed. The remaining two thirds say their systems are ‘okay’ (31%), ‘poor’ or ‘very poor’ (34%).One of the key reasons organisations are unable to measure quality of hire effectively is that their HR information systems (HRIS) are simply not up to it . Only around a third (35%) say their systems work ‘fairly well’ or ‘well’ in delivering the data needed. The remaining two thirds say their systems are ‘okay’ (31%), ‘poor’ or ‘very poor’ (34% total). ‘Real time’ information becomes increasingly available through new technology platforms, companies committed to improving their quality of hire will employ appropriately skilled professionals to deal with data collection, curation, analysis and exploitation.
  • SPECIFIC AREAS AND IMPACT THEY HAVE OVERALLAmong the top three quality of hire measures (retention of new hires, hiring manager feedback, and employee performance appraisal ratings), retention of new hires is impacted most by the implementation of quality of hire measures, with 62% saying there is significant impact employee performance appraisal ratings are next (56% say there is a significant impact) Then hiring manager feedback (52% have seen significant impact).another quality measure that does not make the top three, employee productivity, is the most positively impacted by the use of quality measures: 70% say that measuring employee productivity as part of quality of hire has resulted in significant improvement in productivity.
  • In general, respondents rank skills and process factors as more critical to driving new hire quality than source of hire. Hiring managers skills should be– Clear about what the role involves i.e. function, objectives, reporting lines etc. It’s important to think about more than just the skills needed to do the job; performance and personality are important too. Combining these elements with known predictors of high performance and converting them into measurable assessment criteria is critical. Open and provide specific details about the role to candidates: Potential employees must have enough information to have a very clear idea of what doing this job would be like – and be able to imagine themselves doing it.Able to communicate what success in the role looks like. Candidates must know exactly what their employer is looking for including which skills and attributes are most highly valued.Objective. Most of us are drawn to people like ourselves. It’s a natural inclination but isn’t helpful in the recruitment process so hiring managers need to take steps to address bias of this kind and ensure assessment methods are objective rather than subjective. Get buy in from decision-makers. The role description should be socialised and agreed upon by key stakeholders. Managers must share a vision of the role and what success means in it in order for someone to achieve that success.Be able to sell the role and the opportunities it brings – via recruiters, the media they employ for recruitment and when communicating with candidates
  • Regional priorities and perspectives Asia Pacific respondents rank the selection process as the most important factor influencing quality of hire, followed by recruiter skills and the orientation/on-boarding process. This finding is supported by the importance placed on competency based behavioral interviewing skills in this region and the widespread use of psychometric assessments and other behavioral simulations. In EMEA, the most pressing factors are skills-related – both hiring manager skills and recruiter skills. Respondents in this region also stress the importance of the recruitment preparation process. This involves clarifying the requirements of the role, agreeing on a sourcing strategy and engaging high quality recruiters who can add value to the process at every stage.
  • Having established a clear idea of what they are looking for, hiring managers need to ensure that their recruitment processes are sufficiently rigorous to identify those candidates that best match the profile of the person they’re looking for.  Hudson RPO recommends assessing candidates against criteria proven to accurately predict high performance in a role. It uses a suite of tools including psychometric tests; verbal, numerical and abstract reasoning assessments; behavioural tests; and ‘live’ situations including simulations and role-playing to determine the technical competencies, skills and experience required for the job.  Hudson RPO also measures candidates’ motivational and behavioural capabilities. Our research shows that the alignment of these two areas is the most accurate predictor of whether a candidate could be a high performer in a role.
  • Based on the research findings and discussions with organisations worldwide, Hudson RPO has identified seven key steps to delivering a successful quality of hire program. 1. Create a compelling business caseSecure executive team support for a quality of hire program by demonstrating the commercial benefits such an initiative could bring. In order to build the case, establish:Which roles within the organisation are critical to driving the top line, client satisfaction and/or client retention?Which of these roles are regularly recruited? (It makes more sense to demonstrate a quality of hire model with a role that is recruited frequently.)  Use broadly accepted models to analyse financial impact. For example, studies show that high performing sales people can create revenues three times that of their average performing counterparts. Those in talent acquisition may need to partner with finance to ensure the business case makes commercial sense. 2. Identify and understand business-critical role families It is vital to determine which roles have the most significant impact on organisational performance. Resist the temptation to measure everything at the outset; it is better to choose a smaller number of regularly recruited business-critical role families and implement a robust program rather than assessing the entire organisation with a raft of generic measures and benefits.  3. Determine the most relevant metrics for quality of new hires in your organisationEncourage debate about the best measures for each role family to ensure the most appropriate metrics are used. Ensure the data your organisation chooses is high quality and incorporates multiple elements that validate one another. For example, a set of qualitative metrics might include performance appraisal, retention and financial measures.  4. Leverage company networks and cross-reference dataCollecting data from multiple systems across recruitment, HRIS and finance will deliver the richest insights and consequently the greatest value. Using only data that can be easily produced by a single discipline limits the scope and worth of conclusions. 5. Analyse the dataThis may be a good project for a masters graduate or student. When analysing the data be sure to draw conclusions that are statistically significant. Analysis may also help determine additional performance indicators that could be incorporated into the quality of hire program. 6.Report your findings to the business and take actionPresent the key findings to people who are sufficiently senior to understand the implications. Be sure to have a clear plan supporting the necessary changes and resources needed. 7. Review the program annually Revisit your quality of hire program each year to ensure you are studying the right roles, using the best metrics, collating and analysing the most appropriate data and driving real change as a result. Most importantly, revisit the business case and quantify and report the benefits the program has delivered. 

Transcript

  • 1. HIRING FOR SUCCESS IMPROVING ORGANISATIONAL PERFORMANCE THROUGH BETTER QUALITY RECRUITMENT © This information is the property of ATC Events and may not be reproduced or used without attribution
  • 2. ABOUT THE REPORT • Hudson RPO and the HRO Today Institute conducted a global benchmarking survey of quality of hire measurement practices • Surveyed talent leaders and hiring managers at 246 companies of all sizes globally • Final report will be officially launched on 30 May 2013 1
  • 3. THE SURVEY 80% 20% Commercial/ Private sector company 47% Other (non-profit, gov’t, etc.) >$50M 30% 35% $50M$499M $500M -$5B 27% 27% 18% <$5B 27%
  • 4. THE RIGHT TALENT IMPROVES BUSINESS PERFORMANCE “How much more does a high performer generate annually than an average performer?” 49% 40% Increased productivity in operations roles Increased profit in general management roles Increased revenue in sales roles 67%
  • 5. THE RIGHT TALENT IMPROVES BUSINESS PERFORMANCE “Compared to our competition, our talent pool is much or somewhat stronger” Average annual percentage return to shareholders 22% 61% 38% Top-Quintile Performing Companies Mid-Quintile Performing Companies 13% Top-Quintile Performing Companies Mid-Quintile Performing Companies Source: McKinsey, War for Talent, Top 200 survey – 5,679 respondents
  • 6. WHO IS MEASURING QUALITY OF HIRE?
  • 7. WHO IS MEASURING QUALITY OF HIRE?
  • 8. WHO IS MEASURING QUALITY OF HIRE? • Almost all organizations surveyed believe quality of hire is important but less than one third are actually measuring it • Just 60% of organisations that measure quality of hire have been doing so for less than two years so it seems to be a developing practice • Most organizations surveyed are measuring quality of hire across all role types using the same measures • There is an argument to suggest better organizational returns would be achieved by measuring quality of hire across a smaller number of roles, but roles which have a more critical business impact 7
  • 9. WHAT MEASURES ARE BEING USED TO DEFINE QUALITY?
  • 10. DEFINING QUALITY OF HIRE
  • 11. DEFINING QUALITY OF HIRE • Employers must translate their definition of quality into clear and measurable criteria • These criteria should be relevant to the organization and role type – a single measure of quality may not be practical • Companies should consider other metrics such as: - Customer metrics i.e. feedback, retention rates - Staff metrics i.e. engagement, retention - 10 Financial metrics i.e. revenue or profit per employee, revenue growth Product & service innovation
  • 12. WHAT HAVE YOU FOUND AS THE KEY CHALLENGES OF DATA COLLECTION?
  • 13. CHALLENGES OF DATA COLLECTION • HR Information systems not up to the task • HRIS and ATS are often not integrated sufficiently • HRIS and ATS often not integrated with financial systems • Systems generally have a lack of compliance among users • Insufficient resources to do the job 12
  • 14. MEASURING DOES IMPACT QUALITY
  • 15. FACTORS THAT IMPACT QUALITY OF HIRE
  • 16. REGIONAL COMPARISON
  • 17. HURDLES TO IMPROVING QUALITY OF HIRE
  • 18. HUDSON RPO’S 7 STEPS TO IMPROVE QUALITY OF HIRE 1. Create a compelling business case 2. Identify and understand business-critical roles 3. Determine the most relevant metrics for these business critical roles 4. Collect and analyse the data, working cross divisionally 5. Report your findings and recommendations to the business and seek their support for required changes 6. Take action to drive required changes ! 7. Review the program annually
  • 19. Register to receive the report: http://HudsonRPO.com/Quality Contact: kimberley.huddle@hudson.com