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6 Ways to Measure Quality of Hire

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Posted by: David Garcia April 08, 2023

Quality of hire is consistently considered one of the essential hiring metrics for companies to measure. However, only one-third of companies believe that their methods of tracking this metric are accurate. 

This metric is undeniably critical to consider when evaluating your hiring practices. Let’s delve into what this metric indicates, why it’s worth measuring, and how to measure it correctly. With this knowledge, you can gain insight into improving the quality of hire at your organization.

What Is Quality of Hire? 

Quality of hire is simultaneously considered one of the essential recruiting metrics for professionals in HR and one of the most difficult to measure adequately. Simply put, quality of hire measures how much value a new hire introduces to your company. 

The method used to measure this metric can vary based on the individual employee, their position, and the overall organization. 

One of the reasons it’s so challenging to assess is that it’s not something you can quickly measure once. Instead, it requires consistent measuring and tracking.

There are different ways of measuring the quality of hire. These include job performance metrics, retention metrics, hiring satisfaction ratings, time to fill, cultural fit, and ramp-up time. 

There are two challenges to contend with during this process. First, these metrics aren’t strictly objective. Second, they don’t naturally translate to a numerical value. 

As a result, in determining how to measure the quality of hire within your organization, you’ll need to decide which metrics are essential for your company. You want to standardize what you consider during your evaluation and how to assign a number to ensure fair, unbiased results. 

Why Is It Important to Measure the Quality of Hire? 

While it can be challenging to put an efficient and accurate process to track the quality of hire metrics into place, it is well worth the effort. Keeping track of this data gives your hiring team the resources to make educated decisions during the hiring process. It also provides helpful information to improve existing processes and drive retention rates.

Measuring the quality of hire provides your business with many advantages. Let’s cover some examples of what opportunities this metric will afford your organization. 

  • Assess areas for improvement: You can identify where the hiring process is lacking. In addition, as you track the quality of hire score, you can measure if and how much improvement your efforts produce.
  • Take advantage of the strongest recruitment skills in your organization: By identifying which departments have the most efficient hiring practices, you can recognize what tactics are working. From there, you can implement them across all departments.
  • Determine what to prioritize in the recruitment process: Establishing quality of hire measurements is an opportunity to assess the most critical factors to your business. As a result, you can prioritize these qualities during your hiring process.
  • Identify the best sources for candidates: Seeing where your best employees are coming from allows you to tap into those resources more and utilize them to your full advantage.
  • Gauge performance of hiring specialists: If you calculate the quality of hire for new employees, you can also track how well hiring specialists are performing. If a hiring specialist consistently hires employees that score high on this metric, you can determine that they are performing well.
  • Create value for your organization: Hiring excellent employees is essential for a company’s success. By measuring your quality of hire and improving it to the best of your ability, you can create excellent teams within your organization to maximize efficiency and productivity.

Measuring Quality of Hire

As mentioned previously, measuring the quality of hire is a fast, one-time measurement. Below, we’ll cover some indicators to assist you in quantifying this metric. 

Your first step is to determine the indicators you’d like to analyze when measuring your quality of hire. These might vary based on the specific role, but below are some options you can consider: 

1. Job Performance Metrics

You can measure job performance by asking for progress reports from the employee’s supervisor. You can also use objective data, such as their number of sales or anything else relevant to their position’s performance. 

2. Retention Metrics

Your retention metrics indicate whether or not new hires were a good fit for the position. However, if using this as a factor to measure your quality of hire, keep in mind that low retention metrics may also point to a need for improvement in management practices or the onboarding process. 

3. Hiring Satisfaction Ratings

This metric represents how satisfied hiring managers are with their new hires. It can also indicate their satisfaction with the overall hiring process employed by the company. 

The best way to do this is to circulate a hiring satisfaction survey. You can share this with senior leadership, department managers, etc.—anyone in a leadership position who can provide valuable insight into a recent hire should complete the survey. 

From there, you can collect the data and get a general rating for the new hire. 

4. Time to Fill

This rating measures the time it took to fill the job posting. You can also use a different number to represent this metric if that suits your organization, especially as you’ll need to ensure that all your measurements use the same scale.

5. Cultural Fit

The cultural fit indicates how well a new hire suits the role and your company culture. You can determine this based on ratings from their supervisors and colleagues.

6. Ramp-up Time

This metric reflects how long the new hire takes to reach full productivity within their role. When quantifying this measurement, compare this with the average time it takes for new hires within the position to reach this productivity stage.

How to Measure the Quality of Hire of an Individual Employee

Once you’ve determined the indicators you’d like to use, you can move on to measuring a single employee’s quality of hire score. You’ll need to quantify each metric on the same scale, such as out of 10 or 100. 

From there, you can add all indicators and divide by the number of indicators. For example, see the below formula:

(Indicator 1 + Indicator 2 + Indicator 3 + Indicator 4) / 4 = Quality of Hire

You can do this for any number of indicators you choose to use. 

How to Measure the Average Quality of Hire of All New Employees

Once you have established a standardized assessment, you can determine your average quality of hire. You may calculate an average across a specific team or all new employees. 

To begin this calculation, you need the scores for each individual in the category you want to analyze. For example, this might be the entire sales team or the company. For accurate results, you’ll want to ensure that the group of new hires you are analyzing all had their quality of hire scores calculated using the same formula and indicators. 

Start with the sum of all of the scores for these employees. Then, divide it by the total number of new hires to calculate the average quality of hire. 

You can do this by using the below formula: 

(New Hire 1 Score + New Hire 2 Score + New Hire 3 Score) / 3 = Average Quality of Hire

You can do this for any number of new hires in a given category. This method determines the quality of hire for a specific department within your company or the organization.

How to Improve Your Organization’s Quality of Hire

Measuring your overall quality of hire is one step, but it shouldn’t be the end goal. It’s essential to take this data to identify ways to improve your quality of hire. Here are some actionable steps you can consider to improve your scores within your company: 

Collecting the Right Data

Ensure you provide your team with the resources to collect pre-hire and post-hire data. 

Pre-Hire

You can gather information before hiring to predict a candidate’s performance in a specific role. Pre-hire data might include scores on tests, assessments, and interviews. 

Background checks are another valuable tool to identify a quality candidate. At ScoutLogic, we can help you use background checks to screen for high-quality candidates for your open positions.

Post-Hire

This information includes both subjective and objective data. Subjective data could include the manager’s satisfaction with the employee or a new hire’s self-reported engagement ratings. Objective data might be an employee’s tenure with the company, the number of promotions they’ve had, and how long it took them to reach maximum productivity.

Examine QoH Metrics and Identify Weaknesses

By analyzing the metrics discussed earlier in this article, you can identify areas for improvement within your recruitment process. Then you can take action to improve them.

Prioritize Resources that Bring the Best Results

With results-based data (e.g., sales numbers), you can identify which sources for candidates are most effective for your team. Then you can use that information to your advantage. By tapping into that valuable source consistently, you may see improvements in your scores.

Consider Multiple Interviews During the Hiring Process

Consider implementing multiple interviews while vetting candidates for positions within your organization. Doing so may give you more information about potential hires and their career goals. It will help you determine whether they fit the job well.

Final Thoughts

As you can see, there are many reasons your organization can benefit from effectively calculating its quality of hire. Consistently monitoring this score and identifying areas for improvement is a great way to identify quality candidates and bring about the best results for your business. 

So much goes into keeping an organization and its employees running smoothly. Assessing employee job satisfaction, retention, and quality of hire are all critical parts of this. 

Streamlining your hiring process will produce consistently higher-quality hires and keep your hiring process running like a well-oiled machine. Consider our background check service from ScoutLogic. Our Scouts assist their organizations in seamlessly bringing on highly qualified professionals to their teams. This way, you can free up more time to identify the best candidates to enhance your team’s performance!

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