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. A strong team is key to creating a strong organization. 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? Well, don’t worry, we have you covered with everything you need to know about what it is, how to measure it, and why it matters for you and your company. By the end, you should be able to apply what you learn here to your next hire and help boost your company into the future.

What is Quality of Hire?

Well, in the simplest terms, it’s the value a new hire contributes to the company’s long-term success. The main function of measuring quality of hire is to determine how effective a new recruit is after starting their new position. It can also fulfill a secondary role in determining how successful your company’s hiring practices are. The recruiting department is in charge of determining which candidates will perform best in the given role. 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% rushed the hiring process. Quality of hire is the mechanism by which we can prevent these sorts of decisions from happening. 

 

How Do You Measure Quality of Hire?

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. Then, “what’s the point?” You might ask. Well, over the years many scholars have put in the work to determine the best pre-hire and post-hire factors that help determine the quality of hire. To build a better understanding of how to measure quality of hire, let’s dive a little deeper into both pre-hire, and post-hire factors. 

Pre-Hire Indicators

Before you make any final hiring decisions, there should be a process to determine if someone’s fit for a role. We know most companies will have this in place, though it’s good to refresh and follow up to ensure the right indicators are being given the weight they should. Some of these key quality of hire indicators include: 

  • Job Skill Tests
  • Resume Screening Scores
  • Interview Performance
  • Reference Scores

Together, all these quality of hire metrics can be used to determine if someone might be a good fit. However, if each of these is prioritized alone it may lead to poor hiring decisions. For example, if you focus too much on the resume and want someone with relevant experience, you may be wasting your time. A research analysis project conducted over 5 years found that relevant work experience on a resume held almost no relation to how that candidate would perform at the new company. Even using an AI to parse relevant candidates is no longer guaranteed. These AI resume scrapers can be easily tricked to prioritize certain resumes. This means candidates that would’ve been a great fit will go unnoticed. Using these metrics in tandem creates a more holistic view of the candidates and allows you to better assess 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. Some of these metrics include 

  • Manager satisfaction
  • Employee self-rating
  • Productivity
  • Tenure

These quality of hire metrics together can provide a clear window into the candidates and the process used to get them there. Starting with manager satisfaction and employee self-rating, we can get an idea of how the hiring managers feel the hiring process allows them to find the best candidates for the open roles. With their feedback, the process can be tweaked to better serve the hiring managers. Similarly, employee self-rating allows them to give their own insight into the hiring process and how they feel they fit the role. Both these metrics are more subjective but are useful for providing insight into the hiring process for both parties. 

On the more objective, data-driven side of quality of hire, we can evaluate the employee’s productivity and how long they stay 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. If you have high new hire attrition, it means there is something going wrong in your hiring process. For the new hires that stick around, you can evaluate their job performance from the first day. Depending on the job it may take more or less time to get up to full productivity. For example, if you are filling a high-skill position with a lot to learn, you can set a goal of 90 days to reach full productivity. If the role you’re filling has fewer responsibilities it can be 30 or fewer days. The amount of time it takes to reach full productivity can be determined based on how other employees did during their early employment. These metrics give a clearer picture of the work an employee does and how committed they are to a company. 

 

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. 

First, talent acquisition will become easier as you refine your hiring process and increase quality of hire. Better quality of hire means you are going to find better and better candidates to fill the open positions in your company. There are always good, talented people on the job market, it only takes a little bit of extra effort to discover those individuals and make them want to work at your organization. 

Second, 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. 

Finally, 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. 

 

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 Gympass wellbeing specialist today.

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