3 Tips For Measuring Quality Of Hire In Financial Services
LinkedIn reports quality of hire is the most important recruiting priority for talent acquisition leaders. Quality of hire is the value a new hire adds to your organization in terms of performance and tenure.
For financial services, quality of hire is a top priority because it directly contributes to their bottom line.
Measuring quality of hire is notoriously difficult, however, because it requires technical know-how, access to data, and a long-term mentality. Organizations that can get it right will create a huge competitive advantage.
Here are 3 tips for measuring quality of hire when recruiting for financial services.
Tip #1: Partner with the business to determine what a quality hire looks like
The first step to measuring quality of hire is going back to the basics. Meet with the business to determine what a quality hire looks like to them by asking:
- What does success in a new hire looks like?
- What problem do you want solved?
- How does this affect our bottom line?
That are several ways quality of hire can be measured in financial institutions:
- Receiving a raise
- Receiving a promotion
- Ratings on a performance review
For a sales employee:
- Total dollars in sales for a year
- Commissions earned
- Number of new clients won
- Retention or satisfaction of customers
For a call center employee:
- Number of calls handled in a given time frame
- Time to resolve
- Customer feedback
- Supervisor feedback on monitored calls
For roles where hard data doesn’t exist, there’s still a point at which an employee starts adding value. Partner with the business to figure out what that threshold is for each role.
Tip #2: Calculate the financial impact of each hire
By quantifying the value a hire adds, you can calculate their financial impact on your organization. The cost-impact formula for a hire is:
- Financial impact = Value / Cost
For example, a hire who delivers $1,000,000 of value for your company with a $100,000 salary would have a 10X financial impact.
Measuring the financial impact of a hire is one of the best ways to show how quality of hire can directly increase your company’s bottom line as well as show recruiting’s value in monetary terms.
Tip #3: Invest in a long-term mentality
One of the biggest barriers to measuring quality of hire is that it requires a long-term investment.
Often, quality of hire is measured within the first 90 days of a new hire using metrics like retention or ratings of hiring manager satisfaction. While this type of data can be useful in the short-term, to truly track quality of hire requires a long-term mentality.
To assess if your recruiting process is really hiring the right talent requires tracking and collecting data year over year in terms of hires’ performance, raises, promotions, and tenure.