What HR is Missing, Sales & Marketing Already Knows

Written by Greg Moran, CEO of Chequed.com

HR is the core of most companies; the meat and potatoes of any flourishing firm. Responsible for finding and supplying top performers, talent recruiters leverage candidate and employee knowledge to ensure success. And so given such omnipotent praise, it kills us to say this, but it’s necessary: HR needs to be more like Sales and Marketing.

Sales and marketing revolves around objectivity, strategically calculated metrics, and all encompassing data.  Their benchmarks and goals are easily defined and understood through analysis that is, in most cases, spot on and tied directly to actionable results.  This leaves little room for inappropriate measurement or subsequent confusion over the disparity between measurement results and actual effects. “HR does that too!” you say? Well, not quite; not yet (at least for the most part).

Many of the traditional HR metrics used are insufficient, or altogether inapplicable, when considering the quality of hire.  Cost per hire and time to hire, for example, tell us literally nothing about the candidates’ ability to think critically or their effect on department morale. And thus, while useful in their own right, they do not create a complete picture of a recruiter or hiring manager’s success in finding the right candidate.

Likewise, the quality of hire is vital when evaluating our hiring processes because a bad hire can lurk under an acceptable time to hire or a low turnover rate.  And as we all know, a bad hire is a very dangerous thing. A study by the Society for Human Resources Management (SHRM) denotes a cost of up to five times a bad hire’s annual salary – but that’s just one of the tangible effects; never mind the soft costs associated with the decrease in productivity due to relational friction or the loss of top performers who are so frustrated with the bad hire that they up and walk.

To improve hiring there’s a new metric on the block you can incorporate into your assessments: return on hire.  Return on hire refers to those intangible impacts that are measured through more qualitative metrics. Great hires add value above and beyond the basic quantitative expectations. In other words, recruiters need to determine how a new hire fits in with the overall company culture by asking questions like “Are they contributing in ways beyond actual performance measures?” and “Would I hire them again?”

To directly incorporate metrics of value and performance into our hiring process assessment, we could, for example, take a round of hiring 25 sales people. After these new hires have been in their position for a sufficient amount of time, we could consider the following:

• On a scale of 1-10, how well is the hire aligned with the strategic values of the organization?
• On a scale of 1-10, how are they performing against goals?
• What percentage of hires are still in the position? (Useful only in large hiring organizations)

You might also want to consider customer service scores, company awards or recognitions, and manager satisfaction. The aggregate results of such analyses are a stronger indication of the employee’s intangible contribution and, thus, serve as a valid supplement to a recruiter’s existing arsenal of metrics.  These results can then be fed back into the system to further improve the overall process. Essentially, we’re attempting to identify those intangible attributes that  managers and past top performers consider critical to achieving excellence, as opposed to mere satisfaction, in each position.

What’s more, causal links can also be sought out by engaging in such assessment tactics. By maintaining a stringent record of candidate information and comparing it with their subsequent value and performance results as employees, recruiters can delineate key attributes that should be pursued in future recruitment.  As in Sales and Marketing, the goals of HR need to be well defined and, whenever possible, scientifically validated through such comparative processes. 

HR needs to connect to business results and leverage what Sales and Marketing already knows then apply it to the hiring process. By going beyond the traditional recruitment measures, to incorporate quality of hire and return on hire data as part of our comprehensive assessment, we can demonstrate a more direct link between our hiring practices and ensuing candidate success.

Greg Moran is the CEO of Chequed.com, Pre Hire softwareused by organizations like Subway and Disney to hire better. You can follow Greg on twitter @CEOofChequed.