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How To Measure and Improve Your Quality of Hire

Kristin Bachman
7 min read

In a LinkedIn "Future of Recruiting" report, 88% of respondents rank the quality of hire (QoH) as the single most valuable recruitment metric to focus on in the next five years. At the same time, QoH is notoriously challenging to measure and complex to understand. That's why we've put together a comprehensive guide that walks you through what QoH is, why it matters, and how you can track (and improve) it within your own organization.

What Is Quality of Hire?

In simplest terms, the quality of hire (QoH) metric focuses on the overall value that a new hire brings to your organization and how much they contribute to the business's overall success.

This metric, at face value, is a direct reflection of what a worker brings to the table. However, it's also a reflection of the organization's recruiting efforts and your ability to attract the best candidates for the job.

Also worth noting, QoH (and the factors that go into measuring it) can vary greatly from one industry, company, and individual role to the next.

Why You Should Measure (and Aim To Improve) Quality of Hire

Accurately measuring quality of hire can be complicated. However, this is not a recruiting metric that your organization will want to sleep on. In fact, there are several benefits your company can enjoy as a direct result of tracking and optimizing QoH.

Heightened Work Productivity and Efficiency

When you're regularly measuring and aiming to improve quality of hire, your organization may see improved productivity and efficiency among its workers and teams. That's because when you're hiring the right talent for the job, you'll end up with motivated, efficient, and reliable employees.

Increased Employee Retention (and Attraction of Top Talent)

Quality hires will naturally fit in with your organization.

As a result, they're more likely to be satisfied with their work and want to stick around. This can boost your employee retention numbers and attract other top talent within the industry as well.

Improved Team Collaboration and Communication

High-quality hires also tend to fit in better with their respective team members and coworkers. This makes it easier for employees to work effectively in teams and communicate clearly while working on projects together.

These workers are team players who understand the importance of  achieving goals and reaching milestones, together.

Stronger Brand Reputation

As you attract top talent and excel in your industry, your organization directly reflects the employees you recruit.

Recruiting the right employees builds a sense of trust among your clients and customers; they feel confident working with your company and its employees. This reflects positively on your brand reputation and can even increase customer loyalty.

Better ROI for the Hiring Process

Last but certainly not least, measuring and optimizing your QoH means a better return on investment for your hiring processes. You can use QoH data to reflect and improve upon your own recruiting and hiring process.

Over time, this can help you make data-driven changes to your own recruiting processes that allow you to hire the best talent for the job as efficiently as possible. This is especially important when you consider that the average cost to hire a new employee is nearly $4,700, according to benchmarking data from the Society for Human Resource Management (SHRM).

Hiring Metrics To Help You Measure Quality of Hire

Now that you have a better understanding of why tracking quality of hire matters, which specific metrics should go into measuring it?

Keep in mind that the specific pre-hire and post-hire metrics that matter most to your organization may vary depending on the specific role(s) you're filling, your industry, and your overall goals.

Time to Fill

This metric refers to the total number of days a company takes to fill a job opening or new role within the organization. Typically, this involves calculating the number of days between posting a job opening (or approving a job opening) and the date of an accepted offer by a candidate.

Time to fill is important because it can be a strong indicator of your organization's recruiting efficiency and how long it's taking you to find the right candidate for the job.

Cost Per Hire

Another important metric to look at is cost per hire, which is calculated by adding up all of your recruiting costs and dividing by the number of new hires your company yielded from a particular hiring process.

This is more important to track if you have a larger organization or agency that hires multiple employees with each round of recruiting. However, this metric can be slightly flawed because it fails to account for differences in recruiting costs for different types of roles.

Time to Productivity

Time to productivity is a complicated yet important metric. It essentially tracks how many days it takes for a new hire to become productive and really start contributing to your company's growth and long-term success. Measuring this can be tricky, as one person's idea of "productive" may be different from somebody else's.

When measuring time to productivity, it's important to set some key performance indicators (KPIs) ahead of time that you'll use as benchmarks for productivity. From there, simply calculate the number of days a new hire takes to reach those KPIs, beginning with their start date.

You can calculate this metric for each individual employee or look at an average time to full productivity for your new hires as a whole. Either way, this can be a great way to get a better handle on how efficient your training and onboarding processes may be.

Performance Evaluations

Job performance evaluations from supervisors and managers are also a great tool for measuring the overall quality of a new hire. Specifically, you might consider tracking hiring manager satisfaction ratings, job fit, and team performance reviews to determine how well new employees are adjusting to their roles.

Employee Retention

Tracking the retention rates of your new hires is a great way to visualize how long employees are sticking around after they're hired. Most organizations track this annually by dividing the number of employees with at least one year of service at your company by the number of employees filling those same positions one year ago.

Employee retention and turnover rate matter when it comes to quality of hire — the longer an employee works for a company, the more value they typically bring to the table. If you have high turnover and trouble retaining your employees, your quality of hire is probably also suffering.

Employee Engagement

Finally, consider tracking employee engagement as a means of quantifying QoH.

Employee engagement metrics matter because they provide insight into how happy an employee is working for your company, how invested they are in their role, and how well they get along with colleagues. All of this can be a direct reflection of their overall quality of hire.

Tracking employee engagement is difficult because, like productivity, engagement is a subjective concept. However, many companies successfully measure employee engagement by identifying KPIs ahead of time and send out annual engagement surveys or assessments asking employees to respond to questions on a 1-10 scale.

How To Calculate and Measure Quality of Hire

Ultimately, there's no "one-size-fits-all" formula for calculating quality of hire. However, you can follow a couple of steps to develop a customized formula for your organization.

Determine Metrics and Indicators to Use

Start by getting together with your talent acquisition team and deciding on the metrics and KPIs that are most important and relevant to tracking QoH. The metrics we already covered can be a great starting point, but some others to consider include:

  • Employee lifetime value (ELV)
  • Cultural fit
  • Offer acceptance rate
  • Ramp-up time

The metrics you use to measure QoH will be unique and specific to your company and its goals. You might even find that certain metrics are more applicable to measuring QoH for certain roles or departments than others.

No matter which indicators you use, be sure that they're all measured on the same scale (1-10 or 1%-100%, for example).

Add Up Indicators and Divide By the Amount of Indicators

Once you and your recruitment team have aligned on the most important metrics and KPIs, you can easily build your formula for calculating QoH. To do this, simply add up the indicators you've selected and divide them by the total number of indicators.

For example, if you've selected employee engagement, retention, and performance metrics as the three you'll use, you could create the following QoH formula:

Quality of Hire Score = (Employee engagement score + Employee performance score + Employee retention score) / 3 (Number of indicators)

Best Practices for Improving Your Quality of Hire

Improving QoH within your organization can boost productivity and efficiency while helping you build your brand's reputation.

So, what practical strategies can you employ to improve QoH within your organization?

1) Provide a Smooth Onboarding Process

Research shows that nearly 10% of employees have left a company due to a poor hiring and onboarding experience. If you don't already survey your new hires on their onboarding experience, now may be the time to start. Doing this can reveal powerful insights into your company's process and where it may need improvement.

Some potential ways to improve? Make sure you have a clear training plan in place for all positions, and take the time to provide all the resources your new hires will need prior to their start date so they are ready to begin their jobs from day one.

If possible, get paperwork out of the way ahead of time by reviewing and signing documents digitally.

2) Adopt Full-Cycle Recruiting Practices

You may also want to consider focusing on an end-to-end or full-cycle recruiting process, where every stage of the recruiting process (from attracting talent to extending an offer) occurs in one place.

Compared to other recruitment methods, full-cycle recruiting can help to consolidate your entire process while improving your candidate experience.

The result? An improved QoH and a more streamlined experience.

3) Encourage Feedback From New Hires

Take the time to ask new hires for feedback.

Aside from surveying them about their onboarding experience, you might also request their feedback on the interview process or their job satisfaction throughout the first few months of work.

Of course, it's important to not just collect this feedback — but to take it seriously and make changes as needed to improve the overall new hire experience.

4) Train Managers and the Team To Coach and Motivate New Hires

Rather than throwing new hires into the fray on their first day of work, consider offering mentors to coach and motivate new hires during their first few weeks with your organization.

This can be a great way to help new hires feel a greater sense of belonging while giving them somebody to reach out to directly with any questions or challenges they may encounter.

This improves a new hire's experience and boosts their confidence, which may motivate them to do better work.

5) Continuously Measure and Analyze Your Quality of Hire Metrics

How often should you calculate your quality of hire metrics?

This will vary greatly from one organization (and even one role) to the next. However, it's a good idea to get into the practice of calculating these metrics for all your recent hires at least once per year. Be sure to compare QoH figures between individual employees, teams, and departments; you may be surprised at the trends you may reveal this way.

With a better handle on your QoH metrics and trends, you can better formulate plans to improve QoH overall.

6) Invest in Your Current Employees, Too

Remember that caring about quality of hire doesn't stop after an employee's first few months (or even years) of working with your company.

Your employees are a long-term investment — and this should be reflected in your organization offering plenty of training, development, and career growth opportunities to your current workers.

Doing so will increase engagement and work satisfaction, which can boost QoH.

7) Build a Strong Company Brand and Positive Work Culture

More than ever, employees care about working for companies that share their values and offer a healthy company culture.

In fact, according to a 2019 Glassdoor survey of more than 5,000 workers, 56% reported that a positive workplace culture is more important than salary when it comes to job satisfaction.

Elevate Your Quality of Hire With Hunt Club

With so many factors at play, calculating QoH for your organization can be challenging. However, once you decide on the most relevant KPIs and metrics to track, you can build a QoH formula that's reliable and easy to use. From there, it's all about finding ways to optimize your QoH and reap the benefits as an organization.

Looking to simplify your hiring processes without sacrificing QoH?

Hunt Club can help. Get in touch with our team today to get started!

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