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Quality of Hire in Recruitment

Understanding employee value gives businesses a competitive edge, in any job market.

As of April 2024, low unemployment rates and a high number of open jobs has organizations scrambling to keep their employee rosters filled. It might be tempting to loosen hiring strictures and simply take what you can get – but a bad hire is costly in any job economy, and never worth the risk. 

Hiring dedicated, talented workers has become even more of a priority. Companies are now turning to data to bolster their acquisition efforts and bring on the right people.

Quality of Hire is one critical recruiting metric that empowers your team to locate, hire, and keep the talent you need to keep your business on top.

What is the Quality of Hire metric?

Nearly 40% of talent leaders agree that Quality of Hire (or QoH) is one of the most important recruiting metrics to track. But a lesser 33% feel they are doing all they can to make the most of it. That may be because QoH is a complex concept which is informed by a number of other KPIs. 

The Quality of Hire metric does what is says on the tin. It incorporates multiple factors – including performance, productivity, and retention – and divides them to deliver a single statistic which demonstrates the overall value of a given employee. Most often, this will be measured intermittently after the employee is hired – at 6 months, and then again at 12, to show what benefit the worker has brought to the company. 

Impact of the Quality of Hire metric

Imagine you have a strong QoH strategy in place. You’re impressed with the performance of most new talent brought on board, however a not-insignificant percentage of new hires aren’t staying on past their 6 month review date. This tells you there may be a serious problem in your company’s recruiting and hiring strategy. 

Upon further inspection, a member of your team notices that the majority of those who left were on-boarded by the same manager. As it turns out, this leader has an extremely hands-off approach to orientation, and the new hires exited the company after an unsatisfactory training experience that left them feeling lost and unprepared for work at your company. The hiring manager is re-trained to provide a better experience to your new hires – following this simple change, turnover is reduced, and productivity improves.

In another scenario, consistently poor hires all sourced from the same place may indicate a problem with said source. Or, an individual who is a bad cultural fit might lead you to discover your latest job description misrepresented company values.

Whatever the actual situation, understanding the Quality of Hire metric allows you to address problems within recruitment and drive other critical workforce statistics – such as engagement and retention – through targeted changes. Regularly measuring QoH allows you to continuously improve your process with data-informed modifications to your strategy.

Used diagnostically, QoH can also give your team critical insight into the effectiveness of your company’s recruiting strategy overall. Measuring individual QoH delivers an average QoH statistic, acting as a clear compass that can tell you whether your hiring efforts need a tune-up.

Quality of hire…

This metric gives the clearest indication of the success of your recruiting and hiring efforts. Other metrics provide the C-Suite and other leaders with important and impactful information, but none of them offer as clear and actionable insight as QoH.

Vs. Cost per Hire

This means the amount your organization spends getting a new employee into an open role.

Keeping tabs on how much a new hire is costing you is important for budgetary planning and other financial decisions within the organization. But some expense is inevitable, and may differ from role-to-role, especially as you move higher up within the organization. Cost-per-Hire is an important metric, but it should not be relied on as a diagnostic for your recruiting strategy overall.

Vs. Time-to-Fill

This means the length of time between the initial job posting and when an offer is accepted.

Again, the length of this process may depend on a number of factors, including the nature of the job, the number of interviews needed, where it’s posted, and how many responses it gets. An otherwise inexplicably lengthy process may tell you there’s something wrong with your job description, or the recruiting site you’re using may not have the right kind of candidates. However it won’t tell you whether those employees you eventually do hire are a success, and should not be given priority of attention over QoH.

Vs. Time-to-Hire

A separate statistic to the above, this means the length of time it takes for a candidate to move through the relevant hiring stages within your organization.

Time-to-Hire is a fairly straightforward thing to measure, and in the past, talent leaders have relied on it as an indicator of a new employee’s potential for success. But time should not be the only thing you use to track this: high-quality employees may have different learning styles, and different access needs around orienting to new roles and spaces. A shorter training period may cost less, but it tells you nothing about the true potential of that worker on the other end.

How to leverage Quality of Hire to your advantage

So how do you measure Quality of Hire?

This metric, as stated earlier, is often an amalgamation of other KPIs that together demonstrate the relative success of your new employee. 

Performance appraisal score is by far the most popular KPI to include in QoH measurements. Tracking this element will tell you how effective an employee is within their new position, which is the most important factor.

Other KPIs include error rates and customer performance scores. Over the long term, KPIs like rate of promotion and salary increase can also be included.

Which KPIs you include will depend on your organizational priorities. You may choose to only measure performance, or add in additional factors for more in-depth insight into your recruiting strategy. Incorporating the metrics from the previous section into your QoH measurement, for example, helps you to better understand the financial aspects of your recruiting strategy, and establish a clear ROI for hiring decisions.

So start by establishing your organizational goals, and work backwards to discover how a high quality employee can be leveraged to help you meet those goals. This will help you to better understand KPIs to include in your QoH metric.

CrossChq can help with Quality of Hire

Our comprehensive hiring intelligence platform is the solution for better measuring, and better using, your Quality of Hire metric. LinkedIn predicts that Quality of Hire will be the “#1 priority for hiring managers in the next 5 years,” and CrossChq helps to make it make sense with our solution optimized to deliver actionable QoH analysis.

With CrossChq, Quality of Hire is no longer a stagnant statistic, but instead a powerful tool that can help you shift your recruiting strategy for better business impact. 

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Mark Ko

by Mark Ko

Content Writer

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