How Do You Define 'Quality of Hire'? | with Nick Johnston

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Welcome. You're listening live. It's a Wednesday and that means it's time for the Shortlist with myself, your host, Johnny Campbell, CEO and co founder of Social Hunt. Welcome to the show everybody. We've got a great show, a kind of universal theme for any of you in hiring and recruiting. This week we we're going to be talking about talking about the definition of quality of hire. How do you define quality of hire in your business, in your team, whatever it might be? It's going to be hopefully a contentious show because I can't find anyone in the world to agree on what the heck quality of hire is and how they define it. Hard to find two companies or two people align on the metric. The principle, yes, but not necessarily the metric. Don't forget if you're a first time listener or viewer to the show. The Shortness is a weekly show we broadcast live on YouTube and LinkedIn but we're also a podcast available on Apple, Spotify or wherever you find your good podcasts, broadcasting typically live from Dublin, Ireland. Over our Internet link you can find more about the show and find out our back catalog and explore that and watch the videos if you'd like to get links or find out what we have coming up next by going to socialtalent.com the shortlist by the way, I'd be remiss of me not to do a quick shout out to our founder of the show and producer, Cat Anderson, who's our head of marketing and this is her last show. She leaves the company tomorrow. She's been instrumental in getting the shortlist up and running with an idea she had earlier in 2020 and bringing the 3040 episodes we've had ever since. So I want to just make that shout out to the brilliant work that Kat and team have done and we wish Kat all the very best. The show won't be the same without her, but we'll march on. And Kat, thanks for everything you've done getting this show up and running. It's been brilliant. Bye Kat. Anyway, let's move on. There will be no more cats on the show. That's my last mention of a cat. Unlike lawyers in the U.S. if you were on Twitter this week. But enough about that. So let's get into it. HR and talent acquisition teams are typically provide required in an organization to provide performance data. The only data typically shared with as a public company is the number of FTEs. So when look at all your financial information you have to share all the information, disclose about your business, your people, information typically it's how many people do you employ? Thanks very much. We'll move on. I think that's about to change. We had Jerry Crispin on the show late in 2020, talking about some of the new SEC requirements, particularly around the Nasdaq and the impact that the new ISO 30414 standard might have on such data. But I think it's going to be the decade in the 2020s of data in HR and HR metrics, and one of the core ones that we've tried to look at over the years is quality. Quality of hire is the elusive metric that I think most talent or TA teams try and look to measure, but there's no real consistency on that and to kind of give us one person's opinion, one person's perspective from many, many organizations. I'd like to welcome to the show. Nick Johnson. Nick is has most recently held the role of VP of Talent Acquisition for Etihad Airways, previously held the role of Head of TA in EMEA for SAP and Head of Global Operations. You've worked as a VP of HR as well, Nick. You've worked for many large enterprises around the world. Different market. Although a native Brit, you're currently joining us from Abu Dhabi, and you have literally managed teams all over the world as well. So it's probably fair to say, Nick, that you've seen a lot of different companies and seen a lot of different ways that this metric has been measured. Would that be fair to say?

Absolutely. Thank you for having me on the show, Jonny. It's really nice to be here. No doubt. Over 20 years of recruiting career, I've seen a lot of different applications of different kind of metrics, working in different industries, different environments. No one company does it the same way. Honestly, two different teams within the same company might need to do it in different ways because of the nature of the jobs that they're working on. And it's been an evolution. And that's interesting to me because when you think about what we do in ta, it's got to be about quality, right? I kind of subscribe to the belief that what we do in TA is not the most strategic thing in hr, but it's definitely the most impactful because as you know, you founded your own company, right? And what makes your company run good people. So if we hire good people, everything flows from that point. And if you don't, it just won't. So, you know, it is like the holy grail of recruitment metrics and TA metrics. And if that's what we're all about. We've got to start asking the question, why haven't we got to a better way of measuring quality of hire?

100%. Nick, maybe if you wouldn't mind sharing with our audience a little bit perhaps about the give us some context, maybe some of the teams that you've worked with, maybe some of the brands that people might be more familiar with. SAP, Etihad.

Could you give us a little bit.

Of context of the scale of the team, the volume of hiring that you've been responsible for over the last few years? Just to kind of. I think it's important for you to get that across that we're not talking about, you know, I do 20 hires a year and here's my measure of quality hire. Tell us a little about the scale of hiring that you've been involved in in your career.

Yeah, sure. So let's step back to when I started to get into, you know, to bigger FTE hiring leadership roles. So that would have been, you know, Cisco back in my RPO days where, you know, we rolled out a team of 35 recruiters across 17 locations across Europe, Middle east and Africa. We dropped that in in six months and we were running 500 hires every six months. So 1,000 a year through to coming out here to the Middle East, Microsoft, Middle east and Africa. That was about 700 every half. It's huge. Yeah. I was then really fortunate to join SAP. SAP. I went in and headed up in my ADAK. That's the two largest segments. That's about 5,000 hires a year. It's a team of about 100 at that point in time. I was fortunate enough that when the head of TA left, they asked me to run it as an interim globally. That took me to 10,000 hires a year. All flavors team of about 300 across the globe. Since then, I've been more into content rather than volume roles. Most recently Etihad, it was a global role. Really reinvigorating the hiring model for the airline and really driving on quality of hiring talent and brand and assessment. And we were doing about 2,500 hires a year and I was doing that with the team of at its peak, 35. But we took it back to 30 as we got more efficient.

Excellent. Excellent. And just a quick shout out to those of you listening live. Quick hello to Srinivasa and to Soren. Good evening and good afternoon to both of you for joining us for saying hello in the chat. We'd welcome, of course, any questions you have. Our comments on the show, the topic or questions for Nick, please do. If you're listening live, join us on LinkedIn or YouTube with your questions and comments and we'll absolutely put them so they can take them. But before we do that, before we even get into the Back to the quality of hire piece, it's been in the news a lot lately. Have a look and see what we have in the news this week. Nick. So first up, there's a great piece in Fast Company on quality of hire. Right? So is the quality of your hires the most important test of good leadership? I'll just give context to this. This is a great article worth reading. For any of you who are listening who haven't already come across it, look up Fast Company. Is the quality of your hires the most important test of good leadership? And it's written actually by the co founder and CEO of a company called Octa. Fascinating company. Todd McKinnon is the CEO there. That's a very successful company. He himself was an ex Salesforce employee who kind of left Salesforce and set up his own business. And Octa have been enormously successful over the last number of years. Billion dollar valuations, all that wonderful good stuff. Right? This is a experienced leader is basically my point. And, and he's really trying to hammer this point home, I guess Nick, which is that he tweeted out, I think is what he explains at the start of the article. He put a tweet out that put that, you know, that, that suggested to the world that 90%, possibly 95% of what makes a good leader is the quality of the people that she hires. What is your perspective on this article? The opinions of this CEO, would you agree? Is that the main driver? Is there anything else? Has he got the ray? What do you think?

So I mean, firstly, kudos to the CEO for putting it out there and really putting a weighting on talent and the ability of leaders to attract talent. I think that's exactly the right agenda to be setting. I always said that recruitment is not, you know, a function that sits in hr. It's a team sport that's run across the business. And if your leaders aren't on point and genuinely trying to hire the best people that they can and playing an active role in attracting and engaging talent, then you're really missing a trick. So I think this guy's absolutely in the right space. Would I say that 95% of a leader's ability and impact is their ability to attract great people? No, I would disagree with that. I'd put a heavy weighting on it. But it's not just attracting the people, it's inspiring and enabling those people to perform at their best. And to think that you would be 90% of your day into getting people through the door and only 10% on helping them to be successful, I think that's a misbalance for me. I'd probably wait it. 30% should be on attraction and getting the right people and 70% should be focusing on enabling those people to perform, getting them on point, inspired with the mission, putting them in the right place and helping them to develop and to grow.

Yeah, I think it's a really good point. I'm not into soccer, Nick, for American audiences or football, but if I was, I'd probably point to many, many premier leadership teams who've thrown money at hiring, where they signed the quality players so they might be brought into that, but they've made a hames of trying to put them together on the pitch with poor leadership, poor management of actually getting them to perform. So having the superstar squad, as many football teams around the world have realized, doesn't make a, a, a championship winning team.

No, no. You could have, you could have a load of superstars. Right. All running in the different directions and nothing's going to happen other than the other team are going to score the goal. Yeah. So couldn't agree more.

I think the one point I did take from this that I think was really important was just the importance of being able to hire well across the organization. Right. You know, that it's a strength that really is, isn't given enough focus in your experience, you know, do organizations put enough importance into enabling leaders and training them and making them really good at hiring? You know, even if it is only 30 to 40% of what makes a great leader. Do you think organizations do it good enough?

That's a tough one to answer, isn't it, Johnny? I think there are some organizations that do a really good job of enabling managers to be great people managers. And part of that is around hiring. I think, you know, it's arguable that there are a lot of companies that also have a culture of recruitment is a function in HR. It's HR's job to deliver us the people and we'll do what we can do with the people that we get. That reactive approach is a recipe for failure in my opinion. And it tells you a lot about a company. I get to sit down with a lot of executives in different companies and talk to them about what are they trying to do, what kind of people do they want. It tells you A lot about the direction the company's heading in. When you sit down with the CEO and ask a simple question, I'm going to be hiring executive talent for you. What do you want in your leadership team? Right. I have to be honest, it's rare when somebody sits down and gives me, you know, this is my model. This is how I think about leadership. This is how I think about talent. This is, you know, this is what I'm looking for in that leadership team. But whenever I get a leader like that to work with, it's amazing. We can do an amazing job together because they're on point, they're engaged, they're razor sharp on what they're looking for. And that kind of attitude speaks volumes not just to me as someone providing a service to them, but also the candidates coming through. Yeah. So I think, I think it's something that's important to focus on and I don't think anybody can really say they're doing a good enough job there at the moment.

I've got a great question or two and comments from Jared Weider, which I'm going to come to in just a few minutes. Jared. So thanks for putting those in. I don't know, Nick, if you know Jared well, your paths may have crossed in the past. But before I do, I want to take our second article. I think this is, you know, more to the point around data. And it comes from Forbes this week and it's entitled 2021 Recru Outlook going from Quantity to Quality. And I guess you know the, the, the thesis here, and it's written by another CEO, but probably what is more talking about how to sell his product. No offense, Charles Hips, but I think there is merit in this. He talks about how maybe what we're finally seeing after the kind of change in the market dynamics in 2020 from it being a candidate rich market to in some areas, being a candidate, sorry, a kind of poor market to being a candidate rich market that we're moving from quantity to quality. And in a world where you're moving from quantity to quality, you need metrics and you need measurability and that we're seeing this come into the, the, the world of recruiting and talent acquisition. Now he runs a business that provides this technology and he's overwhelmingly talking about you need the tech. I know, I read this, Nick, and my reading was, you know, okay, this is a tech focused. Tech will solve all your problem. To me, I, I kind of disagree with that. I think to me it's more like, let's nail A formula. Let's nail how we're measuring it. Is it right? Can it be measured? What is it? We'll figure out the tech like a spreadsheet would do. You know, if we to. But like the best tech with a bad process, a bad formula isn't going to make a damn difference. What are your thoughts around this? First of all, the whole move from quantity to quality and then the change in metrics and the need to have great metrics there.

So two things there, Jonny. First is if you're not laser focused on quality, then you're in the wrong game. In my opinion. Everything hangs off quality. Your brand strategy hangs off quality. Your candidate experience feeds into quality. Your sourcing strategy feeds into quality. So even if you're running a volume model and I've run volume recruiting models and you do factory process, you have to. Yeah. But even if you're doing that, if you're not focusing on quality as your outcome, I really do think you're in the wrong game. Because we're all about enhancing business productivity. And that for me is the ultimate measure of quality of hire is how are they contributing to business productivity in whatever area they're in. Whether that's revenue in sales, cost savings in procurement, awareness in engagement in brand. That's the kind of thinking that we need to get to around quality of hire. I do feel like we are going back into an employer driven market. Surplus of candidates, shortage of roles, response handling headaches are definitely coming back into play. Right. And so technology can really help us get through that. And you know, I love tech. Right. I love working in tech, I love working with tech. I do see it as an important part of the model. What's interesting to me is how can we use responsibly, use tech, big data and AI to help us solve the quality of hire problem, to get to an easy way to measure quality of hire. And I think there's huge opportunities to do that. But I do think we need to be very cautious with new technologies that are spotting patterns that we may not even understand. Yeah. And how that can influence the decisions that we're making. So I think it is something that is of great interest but it's kind of out there on the maturity thing. It needs to become more mature for us to be able to use it with confidence and to use it with the responsibility that we have to making good hiring decisions. But without it we're going to be in big trouble. So we definitely have to embrace it.

I'm going to tell a story about two stories One is a profound statement that was quite short, sweet and simple from one of our customers during the year. VP of Talent Acquisition over a team of 400 folks, big technology company, very well known brand. And I asked this, this recruiting leader, what, what are your metrics? What are the things the business really holds you to account for? And he said, there's two things. He said, the quality of hire and speed to ramp. He said, that's it. Are we hiring great people? Am I getting them, am I helping them? Getting ramped up to productivity within the business. That's it. Nothing else matters. Of course some of the things matter, but like that, that's what the business wants, the great people and get them ramped up fast. Because great people who don't get ramped up, that's not very good either. And I was telling the story to another leader, one of the big ERP firms that we work with, who was again the global role, big team. And he was saying how a couple of years ago when he had a big focus on speed, so he was very much metric on time to hire, he felt he was nailing it, he'd achieved his metrics. And he was talking to one of his business leaders in India and saying, isn't it great? We're nailing the speed. And this guy was looking at him going, what do you mean? He's like, we're hiring so fast. And this business leader is going, yeah, but like it takes me two years to get those people ramped up to productivity. This is, this is disgraceful. I can't meet my business goals. I'm, I, this is, it's gone backwards. And it really was the disconnect, it was like, okay, you got to, you know, metrics. The wrong metrics can make a TA leader and her whole team feel brilliant. But then, you know, the business is looking at you going, it's not working. And I'm going to get to Jared's questions here. So, Jared, and great to have you join us, Jared, on LinkedIn with your questions. So Jared Wheeler asking and Jared is an experienced leader of TA teams around the world as well. Two questions. One, is quality of hire merely a product of ta? And then I'll just get to a second comment which is in his opinion, the interview and assessment of the hiring manager hiring team is a primary contributor to the outcome. So it's kind of intertwined. What are your thoughts about that quality hire thing?

Merely, I think, I think it's a great observation that, you know, quality of hire is a bit of TA jargon. You don't see it in other talent measures. So, you know, if you look at, you know, succession planning, learning, performance, they're not talking about quality of hire, but quite simply, they're not hiring. Yeah. They are measuring quality in other ways. So, you know, the classic nine box grid, potential and performance ratings to give them a view of the quality of an individual. So they're talking around it. So, yes, it is a product of ta, but I think it's a necessary product of ta. I don't think if we're, I think if we were to try and talk, try and talk to the business without talking about quality in an impactful way, then we really are missing a trick. And your examples speak to that in volumes. It's my experience that, you know, a lot of hiring managers are really only caring about speed. Once you've identified the right person, they're willing to take their time as long as they know what's going on and they're comfortable that you are working hard for them and doing a job. They're willing to be patient to find the right person because they know the cost of delaying getting somebody into the role is less than the cost of a mishire. But once you've got them, man, they want them quick. Yeah. And they want them in and they want them up and running. So I think that we have to be talking quality and I think it's necessary and sensible that we have our own jargon around that. With regards to the comment that the assessment team and the hiring manager contribution is a primary contributor to quality of hire. Yes, it's a key contributor. There's no doubt in my mind. But I've done a number of very basic spreadsheet experiments, Jonny, where I've looked at trying to work out what's driving quality of hire in the process. And the first thing that springs to my mind is what really drives quality of hire is your sourcing. Right. Because at the end of the day, we're running a funnel in a process. Through that funnel, if we're not feeding good candidates in at the top, we're not going to get good candidates out at the bottom. Right. Simple. And what really drives the quality of sourcing is the kickoff meeting is the engagement of the recruiter and taking that time to really understand the role and work with the manager to set a good plan and to get the manager to play their role in that plan properly. And I can see that. So whenever I go into any new organization, the first thing I do is like a customer satisfaction survey, the sentiment analysis Right. How are you feeling about the recruiting service? How do you feel about the quality of hires you made in the last 12 months? The shortlist, you got the consultation from the recruiter. And I can see empirically that as we start to train recruiters to consult properly. Yeah. Then the quality of the shortlist goes up and then the quality of hire goes up. I can see that knock on effect through that simple data. So for me, hiring manager is a primary contributor to quality of hire, but their primary impact is in that kickoff meeting. And the recruiter is the real contributor to quality of hire because we have to go out there and get the right people in the first place. The manager may attract some people, bring some referrals. We need to complement that and build out a really strong talent pool.

2 comments that have come in I think really back that up. One from Mr. Navasa who's saying unless the role is a leadership one and client facing, should the job description really talk about education from tier one universities? Tier one universities might not mean top productivity. I think the point there is that we need to really understand what it is. Don't just go for arbitrary requirements, you know, and backed up by a second comment saying a lot of hiring decisions are made on those parameters.

Right.

Which is, I guess it's a fair point, people who don't know how to define what they want and go with traditional stereotypes. If you'd like, let's hire from this university, this background, this company, without digging into what does good look like. Right. Which as you said, Nick, and you're quite right, is about alignment in the strategy meeting. And then we have a second comment again coming in from LinkedIn, from ITAC. ITech. Excuse me if I'm mispronouncing your name, but quality of hire is also about the right person for the right organization. The latter part neglected sometimes in that person's opinion, company values as a different difficult conversation. So again, what might be good for one person might be different, might be the wrong candidate for another firm in the same role. Would you agree? That's also part of that, that initial alignment and strategy meeting?

I think 100%. So firstly, too many questions at the same time. Johnny. So welcome to the show. Nick, on the education, on the education piece, I think education is super important. I think, you know, if you can go and get a degree. Great. Yeah. Is it directly relevant to quality of hire and to assessing people's fit in the majority of roles that we hire? Honestly, no. Yeah. Where we're hiring for grads and entry level Positions and we don't have much else to benchmark on. Yeah, absolutely. It's a useful metric. As soon as you're hiring for like 3, 4, 5 plus experience roles, you really need to be getting into what has the person been doing and how have they been doing it. Yeah. What relevant accreditations do they need? What certifications do they need, technical certifications or accreditations to be able to do their job? I always say to my teams, challenge your managers when they start pushing you on education levels and years of experience. I don't care if somebody's got 10 years experience. I care about how many years of relevant experience they've got to the role. And that's what's important. So that kind of mindset is really important to driving quality of hire because that's what drives a good fit. With regard to the point about different roles have different requirements. 1,000%. Yeah. I mean, if you think about it, a very simplistic level, the difference between a salesperson and cabin crew, in my world. Yeah. Is massively different. The outcomes they're going to achieve, the way that they need to do, what they need to be able to do is very, very different. It requires different kinds of people and therefore. And the outcomes that they deliver for the business are different. And therefore the quality indicators could be different at the transactional level, but we can still measure it at the meta level in terms of getting an overall indicator of quality of hire across the organization.

Another comment in from Dale Harris saying he thinks quality hires is totally based on understanding the expectations. Backing up what you said there. But the six million dollar question, Nick, that I wanted to try and get on the show was how do you measure quality of hire? What have you seen that works and what would you recommend others follow?

So I primarily work on sentiment analysis. Yes. So manager feedback. And we try to look at that at two levels. So, you know, the first thing that we look at is are you happy with the quality of the shortlist? Are you happy with the quality of the hire? Yeah. We also try to look at MIS hiring rates. Right. So how many people leave within the first six months? Now that's a broader indicator because, you know, there could be other factors, other external factors to that. It could be the manager, it could be something personal. But at the end of the day, what we're talking about here is not a measure of the recruitment's performance. We're talking about a critical business measure. So we need to take that risk and measure at the organizational level. So if you can look at your mis hiring rate and push your MIS hiring rate down. Yeah. And you can get a view on the cost of a MIS hire. So, for example, I think it's SHRM estimates, it's about 5x of what you're paying that individual. Then you can start to show a contribution in financial terms that your CEO and CFO will be comfortable with. Likewise, sentiment analysis allows you to get direct feedback from the manager. And accommodating the fact that every role is different, they all have different expectations of quality. Where I would like to go with it, and coming back to that big data thing is there are AI technologies that you can plug into your ats, that can look at your funnel and can start to look at the conversions and what's driving those conversions and give you intelligence to feedback on quality of hire. The challenge with that, from my perspective, Johnny, is that often people are progressed. Some are strong, sure fits, some are like borderlines. Right. And the ATS isn't going to know that because they just see them move forwards. Sorry, the AI isn't going to know that because they just see them move forwards. So what we started to do is to introduce numeric ratings of the candidates. So we look at when the recruiter submits them in the shortlist, they give them a number, one to five, three IS meets, five is, you know, outstanding, one is does not meet. That's someone shortlisted one. I'm going to be pretty furious, but it might happen, you never know. Right. And then we get the manager to feedback and review. Yeah, I like this person, I rate them a three. I like this person, I rate them a four. Yeah. And then as we go through the interview process and we're getting the interview feedback and we're aggravating the assessments that we're using, all of it on a five point scale, we can start to draw a line of the assessment of that individual through the process using something that is a bit more objective than sentiment analysis. Where I want to take that then is we can use the AI to start to look at that and to show us what the patterns are for our fives and our threes. Now we can start to get clever because if we want to top grade, we want to be hiring fours and fives, not threes. Right. So then we can really start to get clever with this. I'm not telling you that I've got there. This is the, the vision I have for this. And then I think the follow up is another confirmation. So kind of like the probation or after six months of service, a simple message to the Manager and I'd actually encourage recruiters to do this personally. Whether your, your leaders and your systems are measuring this, you can do this as an individual. Just give them a call and say how's that person producing for you? Are they doing better? Are they meeting the expectations you had for them and are they doing better than the other people in the team? And if you can get that kind of indicator back, then I think you can start to get a read on quality of hire without having to be too granular about what is driving quality in individual roles. So that's, you know, my, my go to has always been manager feedback but I'm trying to move to something more, more objective in terms of the ratings through the assessment process and getting a view on performance after a period of time in the job.

I don't know if you've seen it, but the International Standards Organization ISO in their 304144 kind of HR standard that they published a year and a half ago, they've defined quality of hire and are trying to enforce a standardized quality match measurement across all companies right around the world. And, and without going into massive detail, their formula, Nick, is, is composed of three parts. So it's a percentage number and it's basically these three things added together divided by three. Right. So you rate them out of 100 and then you divide the whole thing by three. Right. So the maximum score could be 300. You divide it by three, so you're going to get a maximum score of 100. So you see where you lie on that. And they're saying the three components are, one is job performance. So it's a performance rating. So the average job performance rating of all new company hires. So I guess you're collecting that data at the end of your first year and you're looking at the internal performance rating metric of that company hire. The second piece is to do with productivity and they're saying the percentage of new hires with acceptable ramp up time to reach full productivity. So did they reach productivity and how long that took. And the third element is the percentage of new hires that retained after one year of employment, 150, etc. So you got a kind of performance metric, a ramp up metric and a retention metric and you add them all together, divide by three and you get a score. They're proposing that's quality of hire. How is that a good measure? And I've thrown this at you, but does that sound reasonably good? What's it missing? You know, is there anything new there? You think that you should, you Know what is interesting?

I prep for the show and I did some googling on quality of hire. Right. Just to see what was out there. And I saw these like three point formulas and a lot of them are coming from recruiting tech firms and RPOs that are saying, here's how you can have a business conversation with your CEO around quality. I'm going to quote Warren Buffet. If you can't explain it in under 10 seconds, you can't understand it. Don't invest in it. Right. That's way too complicated at the end of the day to talk at executive level. We need to talk in simple terms about things that really matter. So being able to tie quality of hire back to performance, financial performance, I think is the simplest thing to do. If we can say we're reducing the mis hire rate and we can put, you know, agree a figure around that with the CFO and only with the cfo, then you have something that stands up in the boardroom. If we can say if we're hiring fours and fives, we're top grading and agree what that multiplier looks like across probably the key roles in your organization. You don't necessarily need to do this for everything, just the stuff that or the roles that really shift the organization. So if you're a product organization, it's research. If your sales organization is the salespeople and use those indicators, I think you can have a more compelling conversation without having to get into a three point explanation explaining what those points are. It feels clunky to me if I'm honest and, you know, clever, really clever. But I wouldn't want to stand up in front of the executives that I deal with and try and explain that to them. Yeah, if I can just talk to them about cash.

It's ISO. I'm like, I'm not too surprised. It's, it's got the, it's not too long, but it's got complications. What do you think about. See, even you just go back to the pure measurement of hey, we hired a four, why are they a four a year later? And if you just take it as simple as that, what if they were rated a 2 but it wasn't because they weren't a 4, they were a 4, but they went into an environment that only allowed them to perform as a 2. Do you still give them a kind of downgraded rating? Is that fair? And what does that say about us understanding what the problem is?

So I was all in for that. You know, I was all in for, let's look at the performance rating after 18 months relative to the pool that they're in and see if they're materially better. But there's so many variables that sit around that performance rating that really make it hard to tie it back to a true measure of quality of hire. And you know, honestly, with a lot of the HR people that I talk to in my network and you know, in, in some of the companies that I've worked in, there's a sense of we don't feel like we trust the performance process enough to, you know, to, to use it for that. We're still maturing it, we're still evolving it. We're not ready to, to use it for, you know, for that kind of thing. Which is why I like to try and tie it back to the mishiring rate and you know, to try and get to a point with the fours and fives.

Is there a challenge and kind of going back to some of the points earlier on. Right. We've lots of questions coming in here. I might just take, just throw some of them at some of the comments questions. We won't get to answer them all, you know. Jared Wheeler, again, asking Nick, have you considered asking the hiring manager to define what success looks like at 6 months and 1 year? Success can be revenue generation, billability, productivity, completion of projects, but it has to be quantitative. Then hires are measured against those expectations, determined value of hire. You've answered part of this, but I'm at pause and ask that you answer this one before overwhelming you with questions. Again, Nick.

So Jared, I've been watching your comments coming through and I love them. I love the point you made about the hiring plan. I do exactly the same thing as part of the hiring plan. If you're not asking your manager what good looks like and how they're going to, you know, what success looks like after 12 months. 12 months is what I use. You know, what, what is you going to say this person has done that will make you say, yeah, I made a good hire, then you're probably not going to go in the right direction. So yeah, absolutely. I believe in asking those questions. Whether we can get into the rhythm of going back and reviewing after a period of time. I think that's what the, you know, after six months, did they meet your expectations? Question is tying it back with that level of granularity would be a great thing to do. That's probably where the tech comes in. Right. So if we can plug into the, the ATS as we're making the hire, these are the success measures. We've agreed in 12 months and then push out to the manager saying, hey, these are the success measures you set for 12 months. Did this person hit these targets then? That could be a really nice way to do this.

We've got Jacob Madsen, who does like the ISO approach, saying it sounds astounding about quality hire loves the three metrics version. So I guess everyone has. This is the point we started with. Everyone has a different opinion on this. For some people it's the. It's the perfect one. Some people it's the worst one. We're probably not going to align on everything at the end of the show, but we'll have surfaced some, some comments. We could see some people talking about that. Another LinkedIn user saying, Measuring expectations versus reality after six months is a great approach. In theory it is. There are challenges, I think is your point. But no matter what metric we choose, Nick, you know, if it's going down, let's say, or it's not at whatever level the business wants it to be, considering there are so many variables you mentioned, you got to get it right. The top of funnel 100. Right. Top of funnel is really good. Right. So that's your pool available has quality in the first place. Then you're going to have a process that assesses for that quality. Then you've got to be an attractive enough organization, both in your eb, your managers and your compensation, to get them on board. Then you've got to have a good onboarding process and you can have a good manager who can bring out the best of them, who can realize that potential if the score is low. And this is really. This bugs me when it talks about metrics because metrics are great only when you can action them. If it's low, how do I diagnose what's wrong? What's your experience on when the metric isn't what people want it to be? How do you figure out what part of the process is wrong? That's Nick Frozen. I wasn't sure whether it was just me or Nick, but Nick, your Internet's just frozen there. If you can hear us, we're going to wait for you to come back online. But while Nick hopefully comes back on our Internet there, I think it is a big issue for organizations because there are, as we all know, when we're trying to measure quality of hire, it's usually a TA metric. The TA team is responsible for it. The T18 gets beaten up when they aren't hitting the right number. When it's down, when it's low. And yes, maybe it's a top of funnel issue. Maybe we aren't producing the right pool of talent in the first place. And I think you can have metrics such as hiring managers raising the recruiters through the process, the quality of candidates constantly to make sure that at least, hey, if they're saying that the quality of candidates is high and then we're not getting the right outcomes, what's going on here. But I think you need to prepare for that and be ready to go. Hang on a second. If it's not right, because it won't always be right, how do we get to the problem? And having one metric really causes challenges there. So Nick, welcome back. Well, I ask you that question then again, if you don't mind, I hope you heard the full question, but I'll ask it again around, you know, when it's not the right number, when it's going in the wrong direction for the business. How do we diagnose where in the process and who in the process, because there's so many people might be causing it to be down or even up.

So I think to do that it's, you know, it's a straight piece of consultation. Right. So we, we need to identify from the metric where we have a problem and then go and speak to the people concerned with that problem to find out what the issues are. Typically that's the hiring manager and that's the people that you've hired and possibly other employees in the team that they're working in. And there could be a number of things, you know, wrong in that model. It could be that we're not bringing the right skills. It could be that we're miss setting expectations with the candidates. They're coming in, it's not the reality they thought it would be. And they're leaving because they've got talent. There's a number of different things that are driving that. It could be that we're not targeting the right talent, in which case we might need to look at our attraction or our hunting strategies. The simple way to get into that is to go and do a deep dive. So you're going to identify where are my worst case issues and go and talk to everybody concerned with that reverse back across the process and see where you're seeing the challenge points or the kinks and then work out what to do with them.

Yeah. Jacob Madsen saying that's untangling a web. And he would say it's pretty near impossible. Is it possible in your experience in complex TA organizations, can it be done. And if so, what is the Rosetta stone that unlocks the ability to untangle that web?

I've been doing it for 15 years, Jacob. So most of the companies that I go into is to do a change program in ta, which is fantastic work to be able to do. Untangling the web requires some headspace. Right. So normally I go into a new company, I've got 30 days to do that kind of review process that I just talked about to understand what's going on with their model and then to put together a new model and implement and start the implementation process. When you're live in operation, you're going to have to call it out and say, we have a problem. Yeah. We don't have the capacity to deal with this problem without dropping something else. So then you're getting into business as a team sport. Yeah. Is it you that's going to do the, the untangling? Are the business partners going to help you? Yeah. The business themselves going to drop some people in that are skilled in this area and help you to work through that problem. What you cannot do is leave the web tangled.

Yeah.

We need straight lines running through those recruitment processes. It's entirely possible, but you need headspace and thinking space to be able to do it.

So Nick, if you were to pick, I know it's not quite the topic of the day, but you know, I mentioned at the top of the hour that we have a customer who inspired me to kind of look at two, two metrics, one of which was quality hire. What about that time to ramp metric? Do you think it's a good second metric? Would it be your second next best metric to use to kind of look at the quality and impact of hiring an organization?

I think time to productivity is ultimately what it's all about. Time to ramp, to me sounds like, okay, we've identified the person they started. How quickly do we get them up and running? I think that's a good metric to look at, but I think you need to be able to exercise management judgment. So, you know, for example, Joni, where I recruit here in the Middle east, we have a diversity agenda. The diversity agenda and the way things work here allow us to consider less skilled candidates and put them on a longer development path to get the diversity metrics right in the business. If we over focus on ramp time, that would perhaps affect us on that diversity agenda. But that's my sense of all metrics that we use. We may decide to increase our cost per hire because we want to invest in new solutions coming into the recruitment function that will pay out in the future. In the future, as long as you know why you're doing it and you're predicting what's happening with your metrics. And that's the key thing. You've got to be able to predict we're going to do this, it's going to do these to the measures and then over time they're going to trend over here. That's why we're doing this. And you manage your stakeholders through that, you'll be okay. I think looking at how quickly people get productive is really important because there's always something you're going to learn from that. Right. So as soon as you start paying attention to something and measuring it and trying to work out what's going on in there, you're going to identify ways to improve it. So I would definitely be measuring that. And we do look at the cycle time through different stages of the process, but again with the flexibility to acknowledge that you may trend it down deliberately in order to achieve other objectives that the business has.

I'm going to throw out from out of nowhere. So you'll be forgiven for pretending the Internet drops if this is the case in the SaaS world. Right. The software as a service world that I live in. Two biggest business metrics that people are held to apart from growth are churn and what's called customer lifetime value over cost of acquisition of a customer, CLTV over cac. I explained the two of them. I wonder what your thoughts are and could we perhaps introduce them in a TA environment? What is your churn which we have churn in? Employee churn. Right. The second being, you know, not the first year measure which we've talked about here. What's the employee lifetime value divided by the cost of bringing that person in? You know, in Software there's a 3 to 1 magic ratio above that you're doing well, that we're getting three times more value than we put in to try and acquire them. So therefore that's, that's a good productive productivity measure. Do you think something similar is possible in the world of HR where we look at the employee lifetime value in an organization and then assign that to some sort of cost of bringing them in? Because I'm really, I really liked your point around how time to productivity falls down when you look at trying to, let's say, you know, take marginalized individuals and give them more time, which is a really good thing you should be doing. But then it. If you only look at one blind metric, you won't do it. You'll just dump all those initiatives because it's going to spoil your metrics. So that lifetime value. Do you think there's something there that we could do in. In ta?

There's something there, but I think this probably takes us back to, you know, one of the core problems with. With quality of hire. Our best measures of quality of hire are lagging indicators. They're after the fact, they're off to the point of hiring, they're really well worth looking at. But what we really need to try and do is work out which leading indicators correlate to and influence those lagging indicators. If we can do that, then we track our lagging indicators, but we laser focus on those leading indicators because then we have the opportunity to be proactive and pull levers and change and influence quality of hire in real time, which is what the business needs us to be able to do.

Nick, I think we could go for the two hours on metrics and we'd have the same level of engagement. I'm going to pause for a second. Thank all our live listeners and viewers for their fantastic questions. It's been brilliant. We've tons more we didn't even get to get to and comments. But, Nick, we're nearly out of time. I'm conscious that you've got a whole heap of kids downstairs trying to get their movie finished before they come and annoy dad for bedtime. Nick, as we do at the end of every show, we try and ask each guest to leave us with their tip or piece of advice and you've. You've left us with tons already. Don't get me wrong, Nick, but I'm asking for one more. What tip or piece of advice would you leave us with today for our shortlist that either you've gained from your own experience or has been passed on to you over the years.

So what I'm going to do now is quote my dad so that I can play this back to him and show him later and get some dad points. Right? So one of my dad's best bits of advice to me ever, when I was kind of kicking around after university wondering what to do next, was sometimes you just got to jump in the pool and get on with it, son. Yeah, don't overthink it. And I think I see today, I think in this conversation, you can overthink quality of hire and the metrics and all of that stuff. And I think today and in the COVID world that we're living in, the levels of anxiety amongst everybody has risen and A lot of people are overthinking and I think sometimes we just need to jump in and get on with it. So I'm going to quote the old man, just jump in the pool and get on with it.

Drop the mic and leave. Nick, it's been an absolute pleasure. Thanks a million for staying up late. I know you got to get the kids to bed and listen, I wish you great success. And on your new, new venture, we're at Social Talent, really excited to begin to partner with you. We're looking forward to bringing your new content to the platform later this year for our users and excited to bring more insights and thoughts. And thanks for sharing your wisdom with us here today on the shortlist.

Thank you very much. It was great fun.

So for those of you who are keen to hear what we have next, of course we've got loads more planned for you. Hope you really enjoyed those insights and hopefully it sparked some debate in your team and we'd love to hear your thoughts as well. But next week we've got another show. It won't have the fabulous Kat Anderson, but it will have the fantastic Matthew Jeffrey and Catalina Hernandez. So, Matt and Catalina joining us from ey, EY has been a company that I've massively admired over the last few years about how they've really shaken up the, the way that they have thought about recruiting and from what for some of us might be a very traditional business advisory firm, a big four organization, you know, ey, particularly in the uk, have done some fantastic things around diversity and things that actually work, changing the way that they hire, removing the need to have a 2:1 degree, as it's referred to in the UK and Ireland, and tons of other issues around gender, about economic background, tons of things that really made a difference in EY and change things. So I'm very excited to welcome the head of ta, Matthew Jeffrey and his colleague Catalina from their diversity, equity and inclusion organization to basically talk about how to keep diversity top of the agenda when it's out of the news. Something I think EY have done admirably and we're going to hopefully hear that story when they join us next week. And that is going to be, of course, broadcast live. You want to get your live questions and comments in, please do join us live on LinkedIn or YouTube. You'll find us on LinkedIn on my channel, on my page or else on YouTube, on YouTube.com forward/socialtalent. That's on Wednesday 17th February and that is going to be at 4pm UK time, which is 11am on the east coast of the US, 8am on the west coast, and go Google it for the rest of you to see where it is in the world. If not, you can catch us not quite so live, but usually by Wednesday evening on podcast. And you can always watch the re recordings on LinkedIn and YouTube as well. But I hope you really enjoyed the show. Hope you've got some insight around quality hire. That's the ISO 30414 reference I mentioned. We'll put notes around that and links to Nick if you want to connect with them in the show notes. But until next week, have a great week. Stay safe and try and battle through lockdown through. We'll see you next week.