How to Measure Quality of Hire

July 20, 2019
    

When it comes to measuring the success of recruiting, a critical metric to track is Quality of Hire, which gauges the overall success of a new hire in meeting their job expectations.

While making hires quickly and within your budget are important, the new hire’s performance and the ROI they bring to your company over time are of much greater consequence.

In fact, according to our recent research report on Quality of Hire, over 60% of companies cited identifying quality hires as the top challenge they are facing in the next year.

Below, we’ll tell you more about Quality of Hire and how you can start systematically measuring this crucial metric to improve future hiring outcomes.

What is Quality of Hire?

Before getting into the “nitty-gritty” of how to measure and improve quality of hire, we’ll want to define Quality of Hire (QoH).

Definition of Quality of Hire: Quality of Hire can be defined as the value that a new hire brings to a company.

Pretty straightforward, right?

While easy to define, quality of hire is much more difficult to quantify and improve. Below you’ll find ways to calculate and measure Quality of Hire, and steps for improving your recruiting programs to drive in better quality employees.

How to calculate Quality of Hire

To measure quality of hire, you’ll want to use an average of various metrics that gauge performance of new hires.

Performance Metrics

The first set of metrics you should examine are performance metrics: the raw performance data demonstrating the new hire’s ability to meet and exceed established benchmarks for their role. Are they hitting necessary milestones and learning their new job at a good pace? Are they meeting initial company and team goals showing potential for long term success in their role?

For example, for a new sales rep, you may want to use the following performance metrics:

  • Number of meetings set
  • Average daily outbound activity
  • Overall revenue generated
  • Percentage of assigned leads closed
  • Stature of accounts closed
  • Performance vs. sales quota

After choosing and tracking the most relevant performance metrics for the new hire’s role, the next factors to consider are hiring manager, direct manager and team satisfaction & fit.

Team Satisfaction & Fit: Manager and Peer Feedback

By using Checkster’s New Hire Insights, you can easily gather feedback from the new hire’s managers and team at the 30,60 and 90 day marks, offering a straightforward way to measure how satisfaction with the new hire improves (or declines) over time.

Instead of scheduling multiple conversations with a new hire’s manager and team members, all you have to do is invite them to provide confidential feedback and evaluate the consolidated feedback report online.

New Hire Satisfaction: Employee Engagement

Finally, it’s important to check in on the new hire ,satisfaction, as this is one of the most critical factors in retaining top talent.

In addition to gathering team member feedback, Checkster’s New Hire Insights also provides an efficient method to check in with new hires directly throughout their onboarding, as often as you’d like. You’ll gather valuable feedback on whether they feel they’re getting the support they need and uncover any red flags that job conditions may be driving your new hire to consider quitting.

Once you have collected new hire performance metrics, team satisfaction metrics and new hire satisfaction metrics, you can combine these metrics to calculate the overall quality of hire.

We have seen organizations trying to put a formula in place to determine quality. We typically advise against it, as it becomes an artificial measurement too far from reality. Something like:

Quality of Hire = (Indicator 1 % + Indicator 2 % + Indicator 3 %) / 3 (this is the total number of indicators)

So, for our example salesperson, Quality of Hire would look like something like this:

Quality of Hire = (Sales performance + Hiring manager satisfaction + New Hire Fit/Satisfaction) / 3

Sometimes some formulas are even more complex. We typically would not recommend this approach, usually keeping a simple net promoter score is a better alternative.

Factors that Affect Quality of Hire

Deciding what metrics will go into your Quality of Hire is the first step to measuring and impacting your quality of hire. Next, you’ll want to understand the various factors that can affect your quality of hire.

The following are some of the most influential factors that can impact your hiring process and your resulting quality of hire:

  • Job requisition/success definition
  • Candidate sources utilized
  • Size of candidate pool
  • Recruiter/hiring manager/interviewer bias
  • Interview question quality
  • Recruiting process speed/quality
  • In-person interviews structure/number/speed/quality
  • Reference check quality
  • New hire expectations set
  • New hire on-boarding program quality
  • New hire goal setting process
  • Employee management in first 6 months of employment

How to Improve your Quality of Hire: 5 Steps

Knowing the various factors that can impact quality of hire, you can build strategies to improve your recruiting metrics.

1. Improve your candidate pool

Your quality of hire is hugely dependent on the candidates that you bring into your recruiting workflows. Understanding which candidate sources are bringing you the best hires is critical to improving your Quality of Hire. But note that although it is often seen as the miracle recipe, it is not, it is only one factor.

It can be helpful to ask yourself questions like:

  • “Do you need to source more candidates of a particular skill set?”
  • “Is an individual source (Indeed, referrals, Dice, etc.) bringing you all of your best hires?”
  • “How many high quality hires have been made through your recruitment and event marketing?”

By connecting the performance of individual sources in your candidate pool with new hire outcomes, you can prioritize top performing sources and improve the quality of your candidate pool.

Once you’re able to focus in on the best sources, a great way to confirm candidate quality is through gathering solid, quality references. Using a tool like Checkster’s Reference Insights allows you to gather feedback from more references, faster, and get higher quality input at the same time.

2. Reference checks - Peer feedback

According to a study done by HireRight2, 85% of job applicants lie during the recruiting process. Using an automated reference check process can help you identify and eliminate candidates that do not have high moral standards and will not be high performers.

3. Eliminate Bias

If you implement a QoH metric and measure it by recruiter, you can see which recruiters are driving the best quality new hires, as well as which recruiters are valuing specific candidate attributes over skill and fit with the company. A recruiter’s bias, conscious or not, may be steered toward a particular academic institution, gender, skill set, or work history that is affecting the decision of whom they send to hiring managers. To improve quality of hire, you must communicate with your recruiters about how bias needlessly eliminates high quality candidates and hurts the company’s performance and diversity over time.

4. Interview Questions

Did you know your interview questions may be screening some high quality candidates out of your recruiting process? Make sure to evaluate your interview questions carefully and A/B test different options. Always keep your interviewees in mind, as an overly long interview process will cause candidates to drop out or take competing offers before you can extend one. You can use Quality of Hire to measure which sets of interview questions are the most effective, thereby improving your Quality of Hire.

Checkster’s Digital Reference Checks make it easy to collect confidential reference feedback, generating an average of 6 reference responses per candidate in the first 2 days, with only minutes invested on your end. By collecting a good amount of feedback from superiors and colleagues of all candidates and generating feedback reports for each applicant, it’s much easier to spot top talent who will fit in well at your company. In addition, Checkster’s fraud detection catches candidates attempting to be fraudulent. The fraud alerts add an additional level of confidence about the quality of candidates when making final decisions.

5. A better onboarding process

Most new hires that churn, do so within the first 90 days. This is in large part due to disorganized and rushed onboarding processes. Checkster’s New Hire Insights makes it easy to see how effective your onboarding program is for new hires and makes it easy for new hires to tell you when they need more onboarding/training on a particular subject. Helping your new hires get up-to-speed quickly not only improves your ROI but also helps to keep them engaged and high performing, so be sure not to skimp on onboarding to improve new hire outcomes.

How to Measure Quality of Hire: Final Thoughts

By connecting new hire outcomes with relevant factors like your candidate pool and your onboarding practices, you can use QoH metrics to improve new hire outcomes at your company.

Checkster’s collective intelligence solutions help companies make better hiring decisions through improved visibility of candidate and hiring process KPIs. To see how Checkster can help you measure and improve your company’s Quality of Hire ratings, schedule a demo here.

1 https://business.linkedin.com/content/dam/business/talent-solutions/global/en_us/c/pdfs/GRT16_GlobalRecruiting_100815.pdf

2 http://www.hireright.com/benchmarking