How to Measure Quality of Hire

Building a team isn’t easy. You have to put out a listing, search through hundreds of applicants, interview them, send offers, and finally onboard the new hires. After all that work, you want to know if the people you hired fit well with the team and positions. If you’re looking for ways to make better hiring choices, you should be measuring your quality of hire.

What is quality of hire exactly? Don’t worry, here’s everything you need to know about quality of hire: what it is, how to measure it, and why it matters for you and your company.

What is Quality of Hire?

Quality of hire, or QoH for short, is a recruiting metric that measures the value a new hire adds to your company and how they will contribute to the company’s long-term success. By measuring quality of hire, you can determine how effective a new hire is after starting their new position. The data can also fulfill a secondary role in determining how successful your company’s hiring practices are.

Recruitment specialist Robert Half conducted research that found 61% of businesses admit to hiring a candidate that did not sufficiently match the job role, while 56% of businesses rushed the hiring process. Quality of hire is the metric by which you can prevent these sorts of decisions from happening.

How to Measure Quality of Hire

Now we know what quality of hire is, but how is it measured? Unfortunately, it isn’t always concrete and results may not be seen until months after you’ve hired someone. Despite this, most companies measure quality of hire by averaging data from related metrics that are considered indicators of a good quality hire.

QoH = Indicator 1 (%) + Indicator 2 (%) + Indicator 3 (%)…etc. / Number of indicators

These indicators can be measured from two areas of the hiring process: pre-hire and post-hire.

Pre-Hire Indicators

Before you make any final hiring decisions, there should be a process to determine if someone’s a good fit for a role. Some key quality of pre-hire indicators that can be measured throughout the interview process include: 

• Job skill tests
• Resume screening scores
• Interview performance
• Reference scores

Together, all these quality of hire metrics can be used to predict the quality of hire. However, if each of these is prioritized alone it may lead to poor hiring decisions. Using these metrics together creates a more holistic view of the candidates and allows you to better predict the quality of hire.

Post-Hire Indicators

Post-hire data is arguably the most important information you’ll gather about the new hire. This is where they become forged in the fire of business and show their worth. The post-hire data is going to take into consideration both the performance of the new hire, but also how effective your hiring strategies are. These metrics will help you determine your overall quality of hire.

Common Quality of Hire Indicators

Like we said above, most companies choose to combine data from several indicators to determine the overall quality of hire. This is often because “quality” can be a hard thing to define. Here are some common post-hire indicators you can measure to help determine your quality of hire once your employee has started their new role.

1. New hire retention rate

This is how long your new hire stays with the company. Nearly 20% of new hires leave the company within the first 45 days. Past that, 1 in 4 will leave within the first 6 months. A higher turnover rate may mean the candidate was not the right fit for the position in the first place, or perhaps the hiring and onboarding processes could be improved.

2. Employee engagement

Employee engagement measures the connection your employees feel towards your company and the work that they do. There are a lot of ways to measure employee engagement, but the most common way is by sending out an employee engagement survey. For new hires, consider asking questions to gain insight into how happy they are in their new role.

3. Time to ramp-up

How long did it take for the new hire to be productive in their new role? Obviously, different roles can require different ramp-up times. However, if you are finding certain roles or teams are consistently taking more time to ramp-up than others, you may need to revisit your onboarding and training strategies.

4. Performance feedback

After the onboarding period, managers can evaluate how well the new employee is adapting to the new role and responsibilities. Consider gathering performance feedback from their team or other leaders and be sure to ask your new hire to conduct a self-evaluation, too.

Why Does Quality of Hire Matter?

Why should your company take the time to care about quality of hire? With every hiring process, it’s important to be aware of how your hiring practices and the people you hire affect the business at large.

1. It makes finding talent easier.

Talent acquisition will become easier as you refine your hiring process and increase quality of hire. You begin to understand what a quality candidate looks like for your organization and then you can spend time building recruiting strategies around finding those candidates.

2. It improves employee engagement.

Employee engagement increases when the employees feel like they fit the roles they’re in.Engaged employees work harder, work better and help build a stronger team around them.

3. It helps retain employees.

Employee retention is directly affected by both talent acquisition and engagement. If you are recruiting the right talent, and they are being placed in the right position, they are more likely to stay at the company longer. Increasing retention reduces turnover and all the costs associated with it.

4. It preserves your culture.

Your organizational culture is defined by more than your goals and mission statement. It’s also defined by the people and the behaviors of everyone within the company. Your organizational culture can have a big influence on how people work together and with clients and customers. Having a high quality of hire means you are contributing to the success of our organizational culture.

At the end of the day, measuring quality of hire can be an important tool to measure the overall health of your business and its hiring practices. Focusing on increasing your quality of hire will help your organization grow now, and well into the future. For more information on how to build a strong company culture talk to a Wellbeing Specialist today.

Resources

• https://www.roberthalf.co.uk/press/businesses-regret-almost-half-new-hires-skills-shortage-intensifies 
• https://business.fsu.edu/article/work-experience-poor-predictor-future-job-performance 
• https://www.wired.com/story/job-applicants-hack-resume-reading-software/ 
• https://resources.workable.com/tutorial/new-hire-turnover-rate#:~:text=New%20hire%20turnover%20is%20common,first%20year%20on%20the%20job. 
• https://www.recruiting.com/blog/are-your-new-hires-quitting/#:~:text=Especially%20when%20as%20many%20as,that%20sort
• https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/sustainingemployeeengagement.aspx 
• https://www.eaglesflight.com/resource/the-link-between-employee-engagement-and-staff-retention/ 
• https://ideal.com/quality-of-hire/ 
• https://www.crosschq.com/blog/what-is-quality-of-hire-and-why-does-it-matter