As the economy heads toward a slowdown, organizations are looking for ways to cut costs without hampering growth. One of the first casualties of cost-cutting is recruitment. HR managers can no longer justify hiring in bulk with rising hiring costs. Therefore, the focus is shifting from quantity to quality. Organizations are now looking for quality, skilled candidates that fit in with the job role and company culture.
Learn more about quality hiring and why it is crucial.
According to data from the Society of Human Resource Management (SHRM), when hiring, an organization spends an amount that is 2-3 times the salary offered to a candidate.
The process of hiring an employee with a salary of US$80,000 per annum would cost the company US$160,000 to US$240,000.
The hiring cost includes the actual price of hiring the person and the intangible costs of time and effort spent on the hiring process.
The employee either quits or is relieved from work, and the hiring manager again needs to spend the same time and money on the rehiring process.
Quality hiring is redefining the hiring processes to recruit employees who add long-term value and bring success to the organization. It is measured by the Quality of Hire (QoH) metric, which helps understand the efficiency of different hiring processes and involved variables.
Recruitment metrics are numbers or data that highlight the effectiveness and optimality of the hiring process. Looking at past recruitment metrics provides a clear understanding of whether the organization hires the right individuals and whether the existing recruitment processes work efficiently.
Multiple recruitment metrics are used in determining effectiveness; some of them are mentioned below:
|Time to fill
|The time taken to fill an open position
|The number of employees who quit within the first year of joining
|Applicants per opening
|The number of applications received and processed per opening
|The total cost of hiring for a specific position
|Offer acceptance rate
|The number of people who accepted/rejected the job offer
|The satisfaction of the recruiting team
|Type of hire
|The referral, career site and job posting
|Quality of hire
|The long-term value added by the hire to the organization/position
Recruiting managers need to fill up positions within a specified timeframe and cost.
Therefore, should they focus on quality talent or mass quantity applications?
Having a large pool of candidates is favorable but focusing on quality means less time and money spent interviewing and screening candidates. Concentrating on quantity recruitment to find hires may delay the process and lead to spending more resources than required.
The problems of having a large pool of applicants per role include:
Pre-hiring data is initially collected from applications to make the elimination and selection decisions when applicants send their resumes to show their interest in a specific role.
Some organizations ask candidates to fill out a form that contains crucial details, like educational qualifications, years of experience, preferred location, expected CTC, etc. This helps improve the hiring quality in the long term and allows quicker shortlisting of candidates. Instead of checking all resumes, HR managers can check the form data to filter and eliminate candidates that don’t match the requirements.
Hiring managers can utilize Mercer | Mettl’s Hiretrack, a comprehensive recruitment software that allows users to create and customize hiring workflows, and screen candidates easily and quickly.
Mercer | Mettl’s pre-employment assessments have helped leading organizations screen applicants based on multiple traits through the following:
The tool further generates results and reports once applicants are assessed for these skills, which the talent acquisition team can use to narrow down their selection.
Assessments automate the first few levels of decision-making and expedite and improve the precision of the hiring process. Hiring managers can even ensure that the screening process is impartial and equal.
Recruiters may have a moderate understanding of the job profile in some cases. This leads to wrong job expectations and communication with the candidates, which becomes a limitation when hiring quality employees.
Allow recruiters to collaborate with relevant teams to improve their understanding of the job role. Both teams can draft a job description that clearly mentions the roles and duties a candidate needs to perform.
Involving the core team or one of the existing employees in the hiring process allows proper candidate screening to ensure that job role requirements are met.
A Leadership IQ study says 89% of hiring failures happen because the employee is not able to fit in with the existing organizational culture.
Therefore, gauging an employee’s professional and cultural stand in the initial screening processes helps ensure they are a suitable fit.
An organization’s workforce is its biggest asset, and its recruitment strategies determine how effectively it utilizes this strength.
Recruitment metrics, including quality hiring, are ways to know what is efficient and what needs to be changed in the recruitment process. Evaluating different metrics helps adjust and realign the recruitment strategy to meet targets.
Evaluating past numbers and reports helps identify recruitment processes that need improvement, helping hiring managers streamline the recruitment strategy. For example, first-year attrition can help understand whether there was a mismatch in the job description and actual requirements or if unrealistic expectations were set during the interview.
The easiest way to keep track of hiring expenses is by checking recruitment metrics. Identifying unwanted expenses and curtailing them helps provide a better candidate experience during the pre-hiring processes.
Mercer | Mettl’s Training Needs Analysis helps understand skills gaps between existing and new employees. The tool picks up data from metrics to suggest what skills need to be upgraded and build a future-proof workforce.
Therefore, it allows for making a learning map for new high-potential employees, who can take up crucial managerial roles within the organization after appropriate training.
Hiring costs remain the most significant monthly expense for most organizations. Recruiting quality candidates can help optimize this cost and improve hiring efficiency in the long term. Therefore, use the above strategies to spend on the right resources that add value to the organization.
Originally published February 1 2023, Updated February 1 2023
Vaishali has been working as a content creator at Mercer | Mettl since 2022. Her deep understanding and hands-on experience in curating content for education and B2B companies help her find innovative solutions for key business content requirements. She uses her expertise, creative writing style, and industry knowledge to improve brand communications.
The primary objectives of recruitment and selection are to ensure high-quality candidates who are culturally fit and work toward shared organizational goals and vision.