How to measure quality of hire

How to Measure the Quality of Hire?

When we had earlier talked about top recruitment metrics, Quality of Hire was right at the top of the discussion. While most ATS and recruitment software claim to make the recruitment process more efficient, the ultimate focus should be on hiring the best possible candidates because that will have a greater impact on the final bottomline. Therefore, it is essential to understand what exactly quality of hire is and how recruiters can measure it consistently.

  1. What does Quality of Hire mean?
  2. Why is Quality of Hire important?
  3. How to measure Quality of Hire?

What does Quality of Hire mean?

Quality of Hire tracks the value that new employees bring to the organization, how productive and proactive they are and how well they fit in the cultural fabric of the company. A hiring manager is now more of a strategic partner within the organization and as a result, there is more focus on the measurable benefits that recruitment can bring to the business. Therefore, quality of hire has now become one of the most important recruitment metrics and also one of the toughest to measure.

(Also Read: Top 5 Recruitment Metrics That Matter)

 

Why is Quality of Hire important?

People are the most important asset of an organization. Therefore, getting the best people to work for you is not an option, but a prerequisite for any organization’s success. At the end of the day, it’s not the strategies that do the magic; it’s the people who execute them. This is why your employees can prove to be your biggest competitive advantage. At the end of the year when you spell out the sales figures never forget that it’s your employees who made it all possible.

Companies that win are often those that invest in building a strong workforce. Such organizations make sure they hire only the top quality candidates for any role. Their recruitment strategy is centered on improving their quality of hire because a bad hire can not only prove to be wastage of financial resources but also have detrimental impact on overall performance of the team.

Read more about the perils of making a bad hire here:

How to measure quality of hire?

Measuring quality of hire is no simple task as each organization and within each company; individual teams define value and performance differently. According to experts, it is an elusive metric and companies are still evolving, with companies testing out different methods to come up with their version of quality of hire. In other words, we cannot fit this metric in a straightjacket because in the end it all depends on the businesses’ priority. Quality of Hire depends on some factors such as employee performance, retention, productivity, impact on business bottomline, and employee turnover although these are not quality-of-hire measures by themselves.

 

(Also Read: How To Measure Candidate Experience?)

Some of the ways in which you can measure quality of hire in your organization are:

Conduct Hiring Manager Satisfaction Survey to gauge quality of recruits

The easiest way to gauge quality of hire is to ask the hiring managers through a periodic survey their satisfaction level regarding the performance of employee. This method is quite popular as getting data from hiring managers is not that tough. Also, the survey can be conducted regularly. However, there are some drawbacks to this method as hiring managers can be quite subjective in their response. Instead of approaching the survey objectively, they might be influenced by emotional and other human factors while judging the new hire. Besides, many hiring managers would avoid filling long surveys and especially HMs who have made 10 requisitions wouldn’t certainly want to fill out 10 surveys.

Measure Quality of Hire through Performance Reviews

If your company has a comprehensive performance review process in place, it can provide an accurate and objective measure of the quality of hire made. Comparisons of the new hires with your consistent high performers can be pretty effective to gauge their quality. Linking the new hires with performance metrics such as achieving a certain objective/target within a limited period of time is also quite popular. Whether it is selling certain number of units, acquiring new customers or achieving certain level of customer satisfaction, all these are measurable goals which can provide an accurate picture of the quality of new hire. However, this method will only work if the company is good at measuring performance and doesn’t set unrealistic goals for employees.

(Also Read: How to Improve Recruitment and Selection Process?)

Use Retention and turnover to measure Quality of Hire

According to LinkedIn, 48% of companies use Turnover and retention metrics to measure quality of hire. Retention rates tell how many employees found the company as the right fit and therefore chose to stay on. However, the retention rate applies to overall organization and therefore they can’t be used to find individual quality of hire. Also, retention rate is more often than not influenced by the manager, the onboarding process and the quality of workplace. This is why we cannot take it as a reliable metric for measuring hire quality.

Predicting Quality of Hire through Pre-hire quality assessments

All the points discussed earlier are for measuring post-hire Quality of hire. These are long-term methods and can be used to establish a company standard for measuring this metric.  However, with pre-hire tests and assessments in place, we can quickly gauge how successful the candidate will be, if hired. Lou Adler, the founder of The Lou Adler Group, a talent consultancy firm has created a unique talent scorecard that helps predict QoH. Using a mix of these strategies will help you get a fair idea of the quality of hire.

 

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