We all know it’s futile to try to manage what we don’t measure, but many leaders fail to properly measure a critical part of their business: the hiring function.
High-performing employees are to the organization as oxygen is to the human body. If your company doesn’t bring enough in, it’s going to suffocate, slowly and painfully. That’s why I believe that even in larger companies, the CEO should play a direct role in attracting and retaining top talent. Maybe you can’t personally interview every candidate, but you can drive your company’s hiring excellence by consistently tracking the following five metrics.
Together with an assessment of your turnover rates, these measurements will pull back the curtain on how well you’re fulfilling your obligation to provide motivated, productive people to the organization, and will show you where you need to work on your hiring processes.
1. Time to fill an open job. Productivity suffers as positions lie unfilled, and as time passes, you lose momentum on bringing a stellar person into the role. If it’s taking multiple months to fill positions, take a hard look at your hiring process, particularly whether you’re offering a compelling employee value proposition.
2. Time from engaging candidate to offer. In-demand candidates don’t have time to wait around for you to get them an offer. Set a goal to hand your top candidate an offer within two weeks of first engaging with them. That may not be possible for all positions, but if candidates are languishing for months without news on the position, they’ll move on. Don’t expect them to sit by the phone forever—only low performers will be that desperate. If this metric lags, work on getting your recruiters and hiring managers in sync, and look for any opportunity to build speed into the process.
3. Percentage of candidates who accept offers. Hiring is a very time-consuming process, so it is important not to waste everyone’s time going through the interviewing process just to have the candidate turn down the offer. Hopefully the recruiter and hiring manager are laying the groundwork for an offer from the get-go and properly selling the company to the candidate. If so, this number should be 80 percent or better.
4. Companies candidates choose over yours. It’s one thing if you lose out on potential employees to other high-flying companies, but if you are losing to Joe’s Shoe Emporium, something about your company is not very attractive. In one company where I served as CEO, we lost the number-one graduate in computer science from the University of Texas to Google. While I never like losing, the fact that it came down to deciding between us and Google convinced me we were doing something right.
5. Percentage of new hires with high ratings two quarters after hire. I recommend that CEOs and managers use an A-B-C rating system for rating employees throughout the organization, but whatever system you use, make sure that you keep track of how many employees receive high ratings from their managers six months after hire. If you’re bringing on a good deal of C-level players, you’ll need to evaluate where the breakdown is happening.
Tracking and regularly reviewing these metrics gives CEOs and other leaders actionable insight into how well the recruiting and hiring function performs—time well spent, no matter what industry you’re in.