Measuring Employee Quality - Not

In today's overheated job market, many hiring managers can be seen doing back handsprings whenever they fill a position with a body, breathing or otherwise. ("Don't worry, Jack, she'll wake up.") An exaggeration perhaps, but according to a recent study, only five out of 362 U.S. employers measure quality of hire.

That's according to "Staffing 2000," a recent study by the HR measurement service Staffing.org, a nonprofit organization based in Boston. The site was launched in March with the goal of gathering and organizing information to help organizations identify effective staffing practices. According to Nick Burkholder, a former HR executive with Johnson & Johnson Co. and Cigna Corp. and a board member of Staffing.org, companies have traditionally paid little attention to HR metrics, which could help them recruit and retain the best employees. The result? Bad hires (which include both bad employees and good employees who aren't happy with their career path or responsibilities) and high turnover (those employees tend to leave). "Nobody likes to measure," Burkholder says. "Organizations have perceived things like quality as impossible to measure." He also notes that the lack of effective measuring tools has kept many companies from tracking HR stats. Cost of hire, a common metric used by companies, is not an accurate indicator of staffing efficiency if quality isn't considered, he adds.

The study, which Staffing.org says is the most comprehensive survey of staffing performance ever undertaken (426 companies participated), also finds that:

- Staffing costs are rising overall, despite the increased use of the Internet.

- New hire quality is the top staffing priority for 300 of the companies surveyed.

- Participants have not been differentiating between employees they want to retain and those they don't.

- Comprehensive audits are necessary to ensure that development (training) costs are allocated properly and retention initiatives address the right employees.

- The workforce shortage is going to keep getting worse.

Burkholder notes that HR metrics is a field still in its infancy, but companies need to start paying attention to it. "Financial managers are now calling on HR to be accountable, and they should. If you can't show value, you shouldn't be there," he says.

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