HR and Recruiting

The importance and difficulty of measuring quality of hire

quality-of-hire
Written by Eric Titner

What metrics really matter to recruiters and hiring managers and to the companies that employ them? The truth is, as a hiring manager you may be meeting certain predetermined targets that certainly look good, but are you crushing it where it really matters—namely, the quality of your hires? Sure, on the surface you can be meeting your company’s staffing needs and finding quality candidates for all open positions, but how do you know if they—and you by association—are adding real value to the organization?

According to a recent article by Workable, “Quality of hire (QoH) measures the value new hires bring to a company… In this context, ‘value’ usually means how much a new hire contributes to their company’s long-term success by completing tasks, improving their work and helping others… Unsurprisingly, quality of hire is at the top of the list of useful performance KPIs. According to LinkedIn’s 2016 global trends report, it’s a priority for 40% of big companies worldwide (and 45% of small businesses). Efficiency recruiting metrics, like time to fill and time to hire, are trending up, but there are obvious reasons for why quality of hire is still so important… Quality of hire is what makes the recruiting process worthwhile.”

Okay, so it’s clear that quality of hire is important, but how can it be measured effectively? The truth is, it isn’t such an easy thing to quantify. You can really only measure QoH after a hire has been working for at least a few months—if not more. And, in general, “quality” is a vague term that’s hard to define. The Society for Human Resource Management recently published an article that referred to quality of hire as the elusive Holy Grail of recruiting. According to the article,“Quality-of-hire metrics are critical to understanding the effectiveness of your company’s hiring process but, for many, figuring out how to define the measurement is a challenge.”

So, now you know that quality of hire is a critical recruitment metric and that it can be a very tricky thing to measure—but that shouldn’t inspire you to ignore it. Use the following strategies to measure QoH in your organization’s recruitment efforts, to help you get a firm handle on whether or not you’re contributing meaningfully to your company’s bottom line.

Metrics

When you’re ready to get serious about measuring QoH, you’ll need to determine which metrics you’re going to use. Many organizations, including LinkedIn, recommend using the following measures when assessing QoH:

  • Retention: How long are new hires staying at your company?
  • Time to fill: How long does it take you to fill an open job position?
  • Hiring satisfaction: How satisfied are hiring managers and key management personnel with a new hire? This can be measured on a predetermined numerical scale.
  • Time to productivity: How long does it take for a new employee to get up-to-speed on all aspects of the job?
  • Job performance: This one’s obvious—how effective is your new hire in the position? Typically, this can be measured by your company’s existing performance review/ratings process (assuming there is a process in place).
  • Employee engagement: The flipside of job performance—is your new hire happy with the position and company?
  • Cultural fit: A 360-degree measure of how well your new hire is acclimating to the new environment, team, and colleagues.

Data collection

Once you’ve determined the performance metrics that will be used to measure your QoH, you need to determine the best approach for data collection. Some statistics are quantifiable and easy enough to collect—turnover of employees, retention rates, and the meeting of sales goals by employees are simple numerical data that make sense. But, other calculations can be less transparent. Your job will then be to track information about new hires via surveys. Fold them into your company’s systems from the start.

Workable has a list of great surveys to implement into your systems, including:

  • Hiring manager satisfaction surveys (focusing on the recruitment process)
  • Surveys asking managers to rate a new hire’s performance (e.g. 6- and 9-month performance surveys)
  • Employee engagement surveys for new hires
  • 360 surveys asking managers, peers and team members about a new hire’s culture fit and performance
  • Surveys asking hired or rejected candidates to give feedback on the hiring process”

Measures

QoH can be measured in different ways. You can use the above-mentioned metrics to run a QoH assessment for each individual new employee, or you can create aggregate or average scores, which can span things like departments or various hiring timeframes. It all depends on what you’re interested in analyzing (i.e., per-hire QoH vs. QoH trends across teams and over time, etc.). QoH measures can also be made in increments—for example, a new hire’s score can be measured at 6 months, a year, and 2 years from their start date.

Once you decide to make QoH assessment a priority in your organization and have your metrics and data collection processes in place, you can analyze and manipulate the data in countless ways, depending upon your company’s needs, and once you incorporate QoH into your recruitment performance metrics you can count on seeing tangible benefits—both to your institution and to its new hires. Good luck!

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About the author

Eric Titner

Eric is a NYC-based editor and writer, with years of experience in career-focused content development across a wide range of industries.

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