Quality of Hire or Time to Hire: Which Recruitment Metric Matters Most?
Recruiters will be the first to tell you that recruiting is a “people business,” and it is, but when the effectiveness of your recruiting program is being assessed, it really comes down to the numbers. Like it or not, there are specific recruiting metrics to which you have to pay attention.
We’re approaching the end of Q2 of 2018, and the pace of business shows no signs of slowing. In order to stay competitive, your methods of sourcing talent need to be ironclad, and the only way to make sure that is the case is to have the info necessary to make effective, data-driven decisions.
But let’s not get ahead of ourselves. If you’ve researched recruiting metrics before, you’ll know there is no shortage of opinions on which metrics matter and how, exactly, you should slice and dice the numbers to get to the insights you need. However, the truth is unless you’re managing the team or doing the recruiting yourself, focusing on these finer data points can be overkill.
According to LinkedIn’s “Global Recruiting Trends 2017,” the two metrics that best illustrate a recruiter’s level of success are time to hire and quality of hire. Both metrics correlate with significant long- and short-term impacts that can be beneficial or detrimental. With this in mind, let’s dive into these two crucial recruiting metrics to see why they’re important, where they fall short, and when they should occupy your focus.
Time to Hire
The one we all know and love, time to hire is the recruiting metric most often referenced, and with good reason. Time to hire measures the total amount of time it takes for a recruiter to source and onboard talent. That includes everything from outreach, to interviews, to onboarding, and more. Time to hire can encompass many other metrics, including duration of the interview process, time from final interview to offer extension, time needed for candidates to respond to offers, time needed for candidates to be onboarded effectively, and more.
Why It’s Important
Time to hire is one of the most crucial metrics for assessing the efficacy of your recruiting. The more quickly you can source and hire great talent, the more competitive your company will remain. Similarly, if you’re assessing a potential recruiting partner, a fast average time to hire is indicative that the recruiter or firm is pulling from a dense, wide-ranging network of candidates.
Why It’s Overrated
Faster isn’t always better. In some cases, you have to wait for the right hire. In fact, focusing too much on time to hire can drive your company out of business.
Every organization would like to fill positions immediately. However, rushing to make a hire can lead to making the wrong hire, which can decimate your bottom line. It is estimated that the wrong hire can cost an organization up to 15 times the employee’s annual salary.
When Time to Hire Matters Most
As I touched on above, time to hire should be of particular concern for those who are outsourcing their recruiting efforts to retained search agencies. These firms are paid to conduct the search, so it’s in their best interest to find the best candidate in a short amount of time. Moreover, a fast average time to hire generally indicates a more effective retained search agency.
Additionally, time to hire should be a No. 1 priority in organizations with more than 200 employees. In organizations of this size, processes tend to be more well defined, which can sometimes lead to very long recruiting processes. When it comes to landing the best talent, time is of the essence.
Quality of Hire
As the name suggests, quality of hire is a metric that tracks the quality of your candidates, both before and after they are hired. Just like time to hire, this metric can be broken down into many components, including number of quality candidates, recruiting ROI, employee ROI, average length of employee tenure, manager satisfaction, and more.
Why It’s Important
This metric tracks the long-lasting value that each employee brings to an organization. This is the bedrock of your recruiting effort, whether outsourced or in house: Do your recruiting processes regularly bring in the right, high-performing candidates?
While very recruiter is aiming to find the best candidate as quickly as possible, retained search firms tend to prioritize quality of hire simply because they’re paid for the search, not simply to fill a slot. Moreover, much of a retained search firm’s ongoing business relies on referrals, which clients will only give to firms that provide high-caliber candidates.
Why It’s Overrated
Like we covered earlier, business in 2018 shows no signs of slowing down, and you really can’t wait around for a unicorn to fill every position. As you strive to maintain agility in today’s ever-changing business climate, you are going to have to settle for merely satisfactory hires here and there. If you focus only on quality of hire, you may end up with a well-oiled recruiting machine while your primary business flounders from lack of new blood.
When Quality of Hire Matters Most
If you’re conducting in-house recruiting for your own organization, there’s no way you can focus solely on quality of hire. This is doubly true if you’re working for an organization with more than 200 people. The truth is, quality of hire matters most for smaller organizations that need to get the very most out of each and every new employee. Similarly, for retained search firms, this metric is more closely associated with overall success or failure than time to hire is.
Which Metric Is More Indicative of Success
If you’re vetting a search firm in preparation for your next hiring campaign, which metric should you focus on? What if you’re conducting an in-house recruiting effort?
Obviously, the answers will depend on the particular needs of your organization, but in general, smaller organizations tend to prioritize quality over time, with the opposite being true for organizations of 200+ employees. On the outsourcing side, retained search firms are more often judged on the quality of the candidates they bring to the table, and contingency search firms are more often focused on filling a role quickly.
Lastly, the most important thing to remember is that neither of these metrics exists in a vacuum. On the contrary, the success of any recruitment effort, whether retained, contingency, in house, outsourced, consultative, or anything in between, depends on the careful balance of these two priorities — i.e., on finding the right talent quickly.
If your organization’s recruiting program is falling short on either of the metrics discussed here, the good news is that there are plenty of search firms out there that can help. You just have to know where to look.