New research has been recently published in CFO Magazine on the metrics of successful hires made by non-HR executives and managers. The study attempts to quantify that when executives take a more active role in the hiring and the career development decision making process, that the likelihood of a new hire being successful is increased.
Apparently what the new information points up is that when HR dominates these hiring and career development decisions without strong engagement by top management, the probability of success for these new hires goes down. The good news is that organizations that have this awareness can turn this to their advantage by making the most of the executive selection and management development process.
Emerging technology startups and small to medium sized businesses that have lesser or non-existent human resources functions are less subject to the findings in the report. When companies mature or have fairly sophisticated and influential HR recruitment and staff development mechanisms, the natural tendency is to delegate more responsibility to the HR function. Where this delegation leads to disengagement by senior hiring executives is where the success and business impact of those brought in tends to drop off.
The participants, 390 senior corporate executives with various titles, were asked how effective their organization was in its use of 11 different strategic HR practices, and also the extent to which they performed eight HR-related measurements.
One result was a significant outlier. Only 15% said they specifically measured, to a high or very high extent (two of the response options on a five-step scale), the effectiveness of talent decisions made outside of HR. Among all 19 practices and measurements, that was the lowest rate at which one of the top two rankings was selected.
Why is that significant? Because the research also sought to determine whether, and to what degree, the effectiveness of the 11 strategic practices and the usage level of the eight measurements correlated to company performance. And the strongest correlation was found with regard to — you guessed it — measuring the quality of talent decisions made by non-HR leaders.
Think about that. The degree to which a company measures the quality of talent decisions by non-HR leaders is a better predictor of company performance than, for example, how successfully the company identifies where talent has the greatest potential for strategic impact. And it’s far more highly correlated with company results than how greatly the organization measures the impact of high versus low job performance generally, or of training or motivation programs.
Companies “should be jumping all over this,” says Jay Jamrog, senior vice president of research for i4cp. “It sure looks like it can be a competitive advantage, because few companies are doing much of it and it has the highest correlation with company performance.”
Now it strains one’s credibility to imagine that any CEO looking to hire a CFO, or any CFO bringing in a new controller or another leader of a major finance discipline, would cede to HR much of the responsibility for making the hiring decision. But depending on the company, there may be less vigilance when it comes to keeping watch over the development of potential future leaders a few levels down…More at Don’t Let HR Tell You Who to Hire – CFO.com Magazine