As you know I suggest using the 10-factor talent scorecard to measure quality of hire on a pre-hire and post-hire basis. This form is available for members of the Recruiter’s Wall network to download. Using it is based the on the concept described in my book, Hire With Your Head (John Wiley and Sons, Inc., 2007), suggesting that in order to maximize assessment accuracy, candidates need to be assessed against real job needs. This way,10-factor talent scorecard rankings pre- and post-hire are directly comparable.

This point becomes clear when you read the differences in the 1-5 rankings for each of the factors. Everything is in comparison to real job needs. For example, one of the differences in motivation to do the work for a level 3 score (top 15-20%) and a level 4 (top 5-10%) involves gathering evidence of the candidate proactively seeking job-related problems to solve. By being job-specific, generic competency and behavioral models can be made more accurate in predicting on-the-job performance. It is suggested that you download and review this form as you review this article, since much of it refers to the use of the form in assigning quality levels to candidates.

Using the 10-factor scorecard, it’s possible to assess a group of people pre- and/or post-hire and give them actual grades or scores equivalent to A to F. Here’s a quick summary of these rankings and my definition of these grades. In addition, a financial impact multiplier is noted. In a moment I’ll develop the case for justifying these multipliers.

A level: A total score in the mid-40s point range. An A level person far exceeds expectations. Performance is exceptional, consistent, and far beyond a person typically in this category. The person is capable of a least two promotional levels within a few years. The financial impact of an A level staff person is four times (4X) his or her compensation. This is a superb hire.

B level: A total score in the mid-30s point range. A B level person is competent and motivated to meet all of the performance objectives of the job. The person does not require excess supervision and is promotable in a normal period of time. The financial impact of a B level staff person is two times (2X) his or her compensation. This is a great hire.

C level: A total score in the mid-20s range. A C level person is competent to meet most job needs, but generally not highly motivated to do more than meet the minimum job standards. As a result, the person requires excess supervision, coaching, or training. This person cannot take on bigger assignments without direction, nor is the person promotable. The financial impact of a C level staff position is equivalent (1X) to his or her compensation. These people are not good hires, but often are hired because they interview well and meet the basic experience needs of the job.

D level: A total score in the teens. A D level person is a hiring mistake. The person tends to be marginally competent, but a major distraction. Alternatively, the person could be quite competent but a terrible cultural fit or a total mismatch in style with the hiring manager. Not only does a D level person require excessive supervision and/or training, but the person tends to demotivate others. The financial impact of a D level staff person is equivalent to a loss at least equivalent (-1X) of his or her compensation largely due to excessive turnover, poor quality work, and low production. These people get hired typically for entry-level positions based on minor experience requirements and superficial assessment techniques. These people get hired for higher level positions without consideration for ethics, motivation, character, cultural fit, or managerial fit.

F level: A total score below 10! This is a terrible hire of the walking lawsuit variety. The financial impact of an F level for a staff position is equivalent to a loss at least equal to four times (-4X) his or her compensation. Since no one knowingly would hire an F level person, something obviously went wrong during the assessment process like ignoring the obvious or forgetting to conduct reference checks, a drug test, and background verification.

The financial impact multipliers are important, since they’re used to calculate the ROI of any new hiring initiative (e.g., a new sourcing program, an upgrade to the ATS, or a recruiter or hiring manager training program). Here are the basics of how this would work:

1. First, calculate the overall average quality level of your current hiring process. One way to do this is to just take a representative sample of the people you’ve just hired and rank each person in the sample using the scorecard. Then figure out the overall average score. If your company is like most others, the result will probably be somewhere in the 20s. You’ve got to have a great overall hiring process to get into the 30s. The reason for this is that most companies don’t directly measure job match, cultural fit, or managerial fit during the assessment. The result is higher than necessary turnover and lack of motivation to do more than simply meet the minimum performance standards of the job. So even if you hire some good people and put them in jobs they don’t like or with weaker managers, they can quickly become C and D level performers.
2. Determine the financial impact multiplier of your current hiring process. Since your quality of hire score is most likely in the mid to high 20s, your overall quality grade is somewhere between a C and B level. This is equivalent to a financial impact multiplier between 1X and 2X compensation. Assuming your average multiplier is 1.5X, this means that the total group of people you’ve recently hired contributed 1.5 times their total compensation to cover non-salary expenses with hopefully enough left over to earn your organization a profit. For example, if you hired 500 people last year at an average compensation of $50 thousand each, you would be spending $25 million in annual compensation. The total financial contribution of this group at a 1.5X multiplier would be $37.5 million, leaving a $12.5 million contribution to cover expenses and earn a profit. ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it if you’d like to figure out your company’s actual multiplier. We’ll need to ask your CFO to help on this, but it’s a cool technique.)
3. Assess the impact a new program has on improving the average overall quality level. New programs always promise some kind of benefit, generally cost or time savings. In the future you should justify the value of the program on how well it improves the overall quality of hire level. You can use the talent scorecard for this. First, get the vendor to describe how the quality of hire will improve using their services. If this sounds reasonable, ask the vendor to demonstrate this with real evidence. This should be by actually ranking candidates found and hired using their approach on some type of before-and-after basis. If the evidence seems adequate, then calculate the financial impact this improvement would have on your current hiring process. For example, if you’ll improve your current hiring process by 10% – meaning you’ll hire 10% fewer people who are below your current average replaced by an equal amount above – you can calculate the financial impact of this. You can then use the net improvement to calculate the ROI of the new the new investment. ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it if you'd like to see the actual mathematics behind this or check out the Recruiter’s Wall network for the details.)

The major assumption behind this model involves the determination of the financial impact multipliers for each quality level. There is academic research supporting multipliers like those mentioned[1]. However, common sense would suggest that they’re not too far off, if not conservative.

From an historical perspective one can use productivity differences, improvements in turnover, the need for less training and managerial support, and the business impact of hiring people who far exceed expectations as the basis of these multipliers. In addition, by definition these multipliers are right on. We’ve defined an A level performer as 4X more impactful than a C level performer, and a B level person as 2X more impactful. Read the guidance on the talent scorecard and add up all of the scores for the ten factors to see this. Of course, none of this is even necessary, since whatever financial impact multipliers you use would reach the same financial conclusion on an ROI basis anyway. (This is true as long as an A level person is 50-100% more impactful than a C level person and a B level person is 25-50% more impactful than a C level.)

The real key to justifying any new recruiting investment, even using the most conservative financial impact multipliers, is proving that quality of hire is improving. Setting up processes and metrics to track quality of hire is the real key here, and where the talent scorecard can be most useful. Part of this is getting your vendors to prove their worth on a quality of hire basis. However, to get the full value from this it means managers must define real job needs up front, recruiters must source and screen candidates based on these real job needs, and people need to be hired who are motivated and competent to do the work required. If you do this, your company’s quality of hire is guaranteed to improve, and you’ll have the ROIs to prove it.

[1] Email us for our bibliography at This e-mail address is being protected from spambots. You need JavaScript enabled to view it