By Kate Southam

HR professionals are missing an opportunity to demonstrate the strategic role they play in their organisations due to the way they hire executives and measure the success of those hires.

Research by global recruitment firm Futurestep shows economic uncertainty was placing more focus on the short term impact of an executive hire rather than measures such the potential of the new hire to be promoted.

Many HR professionals were also not getting the buy in of more senior management into the way a new hire is assessed.

A global survey of 1500 HR professionals found 64 per cent judge the success of a recruitment process on an executive or manager’s immediate performance. However, 40 per cent were concerned about the metrics they have in place to measure the success of an executive hire.

The Futurestep Global Talent Impact Study 2012 also found 76 per cent of respondents measure the impact of a hire in the first 12 months and regard this immediate impact as three times more valuable than retention.

Other findings include that 27 per cent of respondents factor in cost of hire when measuring the success of a new hire and 27 per cent consider the time it took to hire the executive or manager.

Overall, 62 per cent of respondents formally measure the impact of a new executive on the business but by country this figure varies widely. For example, only 44 per cent of Australian organisation looks at the impact of the hire on the business compared to 89 per cent in China and 85 per cent in Hong Kong.

Other findings include:

•    62 per cent of respondents have a formal measurement process in place but only 32 per cent use a widely adopted method to measure success.
•    The most popular measures used are performance data (64 per cent) and financial performance (46 per cent).
•    Only 23 per cent of respondents cited board level requirements as a reason for measuring impact.
•    The recruitment process and promoting the values of the process were ranked highest (56 per cent and 48 per cent respectively).

Byrne Mulrooney, Chief Executive Officer at Futurestep says the results reveal “headroom” for senior management to take a greater interest in how the success of a an executive hire is measured and for measures that assess the success of a new hire over the long term.

“Interestingly, there is some acknowledgement that new employees are often measured too early and before they reach a point when they are most likely to make the biggest impact,” he says. 

“This may be because soft skills such as creativity are harder to develop and measure and are less likely to emerge within the first year.”

 “The big question is how to prove the value of measuring the impact that an employee has – not just on the recruitment process and in the first year but also on the business in the long term. 

He says if HR professionals can get more senior “buy in” they would be in a better position to demonstrate the benefits of an executive hire over the medium and long term. This would make it far easier to highlight the strategic role played by HR within the businesses.

CareerOne.com.au, April 2012.