Tigran Sloyan is the cofounder and CEO of CodeSignal, a technical interview and assessment platform.
In today’s business climate, software engineering is the engine that powers innovation across sectors. Hiring technical talent with the right skills is, therefore, not just a recruitment challenge; it’s a strategic imperative. As the CEO and co-founder of a technical interview and assessment company, I frequently witness enterprises grapple with how to measure the efficiency and effectiveness of their tech hiring processes in order to better scale their engineering teams.
While executives are several steps removed from the day-to-day of engineer hiring at their organizations, they still need to be tuned in to the effectiveness of their recruiting processes. Here, I’ll highlight three key metrics that executives should be looking at: quality of hire, cost of hire and time to hire.
Quality Of Hire: Skills and impact
The concept of quality of hire is often reduced to factors visible on a resume: education, previous experience or even the brand reputation of prior employers. However, the ability to produce high-quality code, work collaboratively in teams and solve complex problems are skills that are hard to assess by just looking at a resume.
For software engineers, we can evaluate the quality of hire through post-hiring performance reviews, contributions to the codebase or the time required to become productive in their new role. Using objective skill assessments during the hiring process can also predict job performance with high accuracy; according to recent research by McKinsey, skills-based hiring is five times more predictive of job performance than hiring based on education. The switch to skills-based hiring reduces the risk of making a bad hire and thereby improves the overall quality of your engineering teams.
Why should you care? Highly skilled hires not only bolster productivity, but they also have a multiplying effect on team morale and innovation. In industries with high competition for market share, settling for anything but the best engineers can result in lost opportunities and diminished returns.
Cost Of Hire: Looking Beyond The Recruiting Team
When we speak about the cost of hire, we generally think of costs to the recruiting or talent acquisition team—recruiter salaries, recruitment agency fees, job postings and talent marketing costs. However, the cost to the recruiting team is just the tip of the iceberg.
When hiring technical talent, cost-of-hire calculations must also include the time investment from your engineering team in screening, interviewing and onboarding new hires. Industry research by Greenhouse found that the engineering team incurs six times the cost that the recruiting team does to make one technical hire. The longer the hiring process, the more it diverts your engineers away from their core responsibilities.
Inefficient hiring processes can quickly balloon these costs. For instance, a hiring process that leans too heavily on traditional, resume-based methods tends to result in longer cycles and a higher number of interviews to find the right candidate. Tech hiring tools that screen candidates’ technical skills at the top of the funnel can reduce the amount of time recruiters spend reviewing resumes, and lead to higher-quality candidates advancing to the onsite.
Why is this metric important for you? Every dollar or hour saved in the hiring process can be reallocated to business-critical activities that drive growth and innovation. A streamlined, efficient hiring process is a competitive advantage.
Time To Hire: Speed Without Compromise
Executives often find themselves in a race against time to fill talent gaps at their organizations, especially for technical roles. The time to hire metric—measured from the point of opening a job requisition to when an offer is accepted—helps you understand the efficiency of your hiring pipeline. And, it makes business sense to speed up time to hire.
However, a shorter time to hire shouldn’t come at the expense of the quality of the hire. Speeding through interviews may fill positions quickly, but the longer-term impact of a bad hire can be devastating. Combining validated top-of-funnel skills assessments with highly realistic, job-relevant technical and onsite interviews can drastically reduce time to hire without compromising the quality.
Understanding this metric’s implications is vital. A drawn-out hiring process can result in lost productivity and potentially losing top candidates to competitors. On the other hand, a rushed process can lead to hires who are a poor fit for your team. Striking a balance is key.
In Conclusion
For executives of enterprise companies, these metrics—quality of hire, cost of hire and time to hire—offer robust data insights into the effectiveness and efficiency of your tech hiring processes. Using a technical hiring platform that provides visibility into these metrics makes it easy to monitor the success of your tech recruiting.
As you scale your engineering teams and innovate, keep these metrics top of mind. They won’t just keep you informed on the performance of your recruiting teams—they’ll empower you to make better workforce planning decisions that will shape the future of your organization.
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