Benchmarking in Hiring: What is it and Why is it Important?

Benchmarking in Hiring: What is it and Why is it Important?

Hiring the right candidate for a job is critical to the success of any organization. However, the process of identifying the right fit can be difficult, time-consuming, and prone to human bias. One way to streamline the process and reduce costs is through job profiling, or benchmarking. In this article, we’ll explore what benchmarking is, why it’s useful, and how McQuaig can help organizations define the ideal characteristics required for a specific role.

What is Benchmarking?

Benchmarking is the process of creating a standard for measuring performance in a specific role within an organization. It is essential in the hiring process because it helps organizations define the ideal characteristics required for a specific role, which in turn helps ensure they hire the right people to perform duties and achieve organizational goals.

Defining Ideal Characteristics for a Specific Role

Creating a benchmark involves identifying the key knowledge, skills, abilities, and competencies required for an employee to be successful in a specific role. At McQuaig, we categorize these requirements into three levels. Level 1 covers superficial attributes such as appearance, mannerisms, expressiveness, and presence. While some of these qualities might be important for certain roles, they offer low ability to predict on-the-job performance. Level 2 covers knowledge, acquired skills, training, experience, and education. While more predictive than Level 1, this information can usually be learned from a résumé and skills can often be trained. Level 3 covers innate behavior patterns such as attitude, motivation, character, aptitude, and temperament. These qualities cannot be trained and are the most predictive of on-the-job success. At McQuaig, we look at Level 3 in terms of ability, character, and temperament, and our solution helps benchmark those qualities and measure candidates against that benchmark.

Creating a benchmark should start with a job analysis, defining the Level 1, 2, and 3 qualities required for success in any given role. This should build a foundation for a benchmark that is customized to the demands of the role. Level 3 qualities can sometimes be hard to define or put into words. They are often simply referred to as “fit”, and hiring managers have a loose idea of what that means. At McQuaig, we know that ability, character, and temperament are three of the most important qualities that correlate to success on the job. We help our customers establish a temperament benchmark that defines the behavioural requirements for the role. We also offer support to our clients to help them measure a person’s innate ability and character. A strong benchmark that focuses on the qualities that are truly predictive of on the job success leads to better hiring decisions, ensuring that organizations select the most qualified candidates for each role and build a strong, effective workforce.

Using Benchmarks in Hiring

Once the benchmark is defined, hiring managers can use it to assess the fit of candidates for the role. A benchmarking tool can be used to objectively compare candidates and reduce bias. Having a benchmark in place will lead to more accurate hires. McQuaig’s benchmarking system is designed to minimize intuitive decision-making, which tends to be biased and inaccurate when selecting candidates. The system provides insight on who is going to succeed in a job and how they will fit into the role.

Revisiting the Benchmark

It’s important to revisit benchmarks on an ongoing basis and update them. Roles and responsibilities are ever-evolving, which needs to be captured in iterations of the benchmark. This ensures that the benchmark remains an accurate representation of the ideal characteristics required for success in the role. What organizations gain from this process is a better understanding of existing roles, requirements, and top performers. They can revisit and revamp roles within the organization, reframe how they budget and think about hiring costs, and consider the time and tools used to create benchmarks, an investment that will reduce the cost of turnover in the long run.

The Cost of a Bad Hire

Making a bad hire can be costly for organizations. A bad hire not only affects the productivity and morale of the team but can also result in financial losses for the organization. The cost of a bad hire includes expenses related to recruitment, training, and severance pay. Additionally, a bad hire can damage the organization’s reputation and lead to lost opportunities.

When you factor in recruitment, training, and lost productivity, the cost of a bad hire can be up to five times the employee’s annual salary. Moreover, the cost of a bad hire can extend beyond monetary losses. It can also lead to decreased employee morale, lower team productivity, and negative impact on customer satisfaction.

Overall, benchmarking is an essential tool for companies looking to improve their hiring process. By defining the ideal characteristics required for a specific role, companies can ensure that they are selecting the most qualified candidates for each role, leading to reduced turnover, improved productivity, and a more effective workforce overall. Regularly revisiting and updating benchmarks ensures that they remain accurate and effective over time. By using McQuaig’s benchmarking system, companies can streamline their benchmarking process and ensure that they are making informed and objective hiring decisions that will lead to better hires and reduced costs.

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