“With SmartRecruiters continuously evolving features and most importantly, their dedicated daily consultation, we’re able to attract, interview, select and hire much more rapidly and effectively, fueling the company’s growth.”
Ryan Conley
Talent Acquisition Manager
Language
McKinsey & Co1, Bain & Co2, Harvard Business Review3 and other4 research show that talent quality directly impacts business outcomes. To quantify this, SmartRecruiters established the Net Hiring Score5 (NHS) metric to measure overall quality of hire. The following model demonstrates the financial impact of hiring top talent. Find out how much hiring the best people saves your business with the SmartRecruiters NHS model.
On average, SmartRecruiters customers experience a 50% increase in quality of hire, which translates to hundreds of millions of dollars in increased productivity. Achievements like this take more than a talent acquisition suite – our team comes with industry-specific recruiting expertise and applies a transformative Hiring Success methodology.
Get in touch to get your personalized NHS and its financial impact
Get in touch1McKinsey & Company study of more than 600,000 researchers, entertainers, politicians, and athletes which found that high performers are 4X more productive than average ones. For low complexity jobs, the high performer is 50% more productive than the average performer. For very high complexity jobs, the difference is 8X.
2Bain & Company research says that “across all job types, we estimate, the best performers are roughly 4 times as productive as average performers. That holds in every industry, geographical region, and type of organization we’ve examined.”
3Frequent Harvard Business Review authors Jack Zenger and Joseph Folkman analyzed a database of 50,000 managers and found that a top 10% leader creates 15X revenue created by the middle 80% leader while a bottom 10% leader costs 4X revenue created by the middle 80% leader. Their research on 24,826 evaluations on 2,055 individual contributors shows that a top 10% individual contributor is 2X as productive as the middle 30%-70% performer.
4In a widely cited paper on organizational behavior, the study shows a bad employee can bring down team productivity by 30%-40%.
5Net Hiring Score measures overall quality of hire. Similar to Net Promoter Score, it’s calculated by detracting % of below-average hires from % of above-average hires and multiplying by 100. With a range from -100 to 100, NHS tells you what % of your employees are above average at your organization.
aNHS = (% of Above-Average Hire - % of Below-Average Hire)*100
bFormula based on research by McKinsey & Co, Bain & Co, and frequent Harvard Business Review authors Jack Zenger and Joseph Folkman, contact us to learn more.
cGenerally applicable relative impact: Below-Average Hire = -2X | Average Hire = 1X |Above-Average Hire = 4X
According to research cited below, an above-average hire produces 2X - 15X the revenue impact while a below-average hire has a negative revenue impact between 1X - 4X. In the model here, we defined an above-average hire as someone who produces 4X the revenue impact as an average hire and a below-average hire as someone who costs 2X the revenue impact as an average hire.
dBased on selected industry benchmarks according to U.S. Department of Labor. According to the U.S. Department of Labor, annual total turnover rate is 43.3% in 2017 and 40% of that is attributed to employees who quit their jobs in their first year of employment according to the Work Institute 2018 Retention Report. This means nearly 20% hires are unsuccessful within the first year.
eAn average SmartRecruiters customer sees a 10 point increase in NHS.
fFormula based on research by McKinsey & Co, Bain & Co, and frequent Harvard Business Review authors Jack Zenger and Joseph Folkman, contact us to learn more.
