Creating an Employer-of-Choice Scorecard

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Rather than try to benchmark themselves against other employers, some

companies are creating ways of measuring their own progress toward becoming

employers of choice. In other words, they are starting to track

year-over-year improvements by creating their own dashboards of talent

management indicators. One way of doing this is to track measures of the

four things every organization must do with talent: attract, select, engage,

and sustain engagement (see Figure 11-2).

Measures of attraction could include the following:

Ratio of employment applicants to open positions

Percentage of applicants considered ‘‘A’’ candidates

Average days to fill vacancies

Ratio of acceptances to offers

Applicant dropout rate

Number of recruiting sources used

Percentile rank of total compensation versus talent competitors

Percentage of new hire referrals who stay at least six months

Average monthly percentage of open positions

Employers of choice, for example, typically have ratios of employment

applicants to open positions of at least 20 to 1, some as high as 100 to 1.

Figure 11-2.

Four key things we MUST do with talent.

The Cycle of

Talent

Management

Attract

Select

Engage

Keep

Engaged

New-hire referral rates of 30 percent are considered healthy, usually indicating

that current employees speak well of the company to their friends

and feel comfortable recommending the organization as a good place to

work.

Measures of selection might include:

First-year voluntary turnover rate

First-year involuntary turnover rate

First-year performance results

First-year performance evaluation by managers

First-year absenteeism rate

First-year employee engagement survey scores

Percentage of candidates hired using behavioral interviewing

Percentage of selection decisions based on competency analysis

Engagement surveys have become an important tool for many companies,

which are using them as a primary indicator of how well talent is being

managed. Many see engagement as a much more meaningful measure than

employee satisfaction, because it encompasses satisfaction, plus dimensions

of performance along with commitment, or intent to stay with the organization.

As you would expect, engagement survey scores appear as a key

measure in the next two categories.

Measures of new-hire engagement might include:

Percentage completing comprehensive orientation process

Percentage completing ‘‘entrance interview’’

Percentage coached by buddy or mentor

First-year employee engagement scores

Percentage of new hires considered ‘‘outstanding’’ performers

First-year voluntary turnover rates

Employee survey results of first-year employees

Percentage whose supervisors leave or are reassigned in first year

Some companies that are especially concerned about quick turnover

among new hires might want to track some of these measures during the

first 30, 90, or 180 days.

Measures of sustained employee engagement could include:

Voluntary turnover rate

Top performer voluntary turnover rate

Performance/quality results

Absenteeism rates

Employee engagement scores

Training hours per employee

Ratio of internal to external hires

Percentage of employees completing individual development plans

Percentage of re-hires among all hires

There are dozens of similar measures that a company might begin to

track and report. As shown in Figure 11-3, the scorecard becomes more

Figure 11-3.

Employer-of-choice scorecard.

EOC Indicators

2005

2004

Voluntary Turnover Rate

11.9%

13.2%

Employee Referral Rate

21.2%

17.4%

Ratio of Jobs Filled Internally

39.8%

33.5%

New Hire Retention Rate

76.3%

71.8%

Quit Rate

13.5%

14.4%

Ratio of Acceptances to

Offers

64.7%

59.7%

Percentage of Engaged

Employees

36.6%

27.9%

Absenteeism Rate

4.0%

5.1%

meaningful in the second and subsequent years as improvements and dropoffs

become apparent at a glance. The next logical step would be to begin

showing the relationship between some or all of these measures and business

results, such as revenue per employee (including outsourced operations)

or customer retention rates.