Are you a founder, human resource manager, or department head tired of putting money and resources into a hiring process that results in a poor quality of hire? If your answer is yes, then you’re on the right page.

In nine minutes, I will explain what quality of hire is, the factors that affect the quality of hire, and the relevance of this one particular recruitment metric to a company.

The LinkedIn Global Recruiting Trends of 2016 mentioned that 40% of big companies and 45% of small companies take measuring the quality of hire to be a priority. It went further to suggest that quality of hire measurements will prove increasingly significant for successful recruitments in the coming years.

A quick summary of the insights from these statistics is that many big companies are reaping the benefits of measuring the quality of hire, a good number of small companies are hoping to do the same, and the use of the quality of hire metric will skyrocket shortly.

If nothing else, this is an impeccable reason for you to want to review and see how good your hiring process is and to learn what quality of hire is really about.

What is the Quality of Hire?

Quality of hire or QoH simply refers to a mathematical estimate and measurement made to determine the value an employee has to offer to a company. QoH paints a picture of how much an employee brings to the table. It answers the question of what the total contribution of an identifiable individual within an organization is.

Understanding Quality of Hire

Before we dive into our discussion about the Quality of Hire, we must talk about KPIs. KPIs stand for Key Performance Indicators. It is a quantifiable measure of performance over time for a specific objective.

There is a very broad scope around KPIs and for this article, we will take a quick look at the ones that relate to recruitment. Recruitment KPIs are divided into three categories.

There are Application KPIs which measure the activities in the job application phase, Hiring KPIs which measure the success of the hiring process, and Rejection KPIs which help you make sense of how many applications were rejected.

All of these recruitment metrics beat and shape the hiring process in any company to suit its goals and objectives.  

QoH is seen as a recruitment KPI even though it only comes in handy after there has been a hire. Essentially, the metric helps a company to determine if its hiring process is optimized to produce the kind of hires the company needs.

It does this by measuring performance, long-term potential, engagement, and acceptance and promotion of company values by the hire.

How can you Measure Hire Quality?

Numbers help us make more sense of things and thankfully, there’s a mathematical way of expressing the quality of hire of an employee. The first step in going about this is to figure out all the factors that are to be considered. Once sorted, the next step is to apply each factor to the Quality of Hire formula:

Quality of Hire  =       ∑Quality of Hire Factors (sum)

                                           number of factors

It is important to note that all assessment factors (from one employee) are to be expressed in the same term, either as a percentage or as a total of 100.  The expected result will also be expressed as a percentage or as a total of 100 (following the term in which the factors were presented).  

From the result, a score of 100 will imply that the employee in question represents a completely satisfactory and high-quality hire.

What Factors Affect the Quality of Hire?

Numerous factors exist for a company to measure its employee’s contribution. In some situations, a company might decide to choose one of these factors as a yardstick for checking out employees. This is not wrong by any means.

However, except in unique conditions, judging the QoH using just one factor might provide an imbalanced and sometimes unacceptable perspective since the role of an employee within a work ecosystem might require them to perform better in one or more aspects different from the one under consideration.

A truly holistic quality of hire comes from properly estimating all the available factors that reflect one’s contribution to a company. Here’s a list of all those really interesting factors:

Ramp-up Time:

Ramp-up time which could also be referred to as time to full performance or productivity, is a measure of the time it takes a new employee, or perhaps an old employee who is now handling a new role, to become fully productive in such a role.

Retention:

Retention is a numerical value (for example, a percentage) expressing the number of employees that remain at a company over a predetermined length of time (which could be a year).

The retention factor could be measured against one or more employees at a time. In this first instance, a company wants to see if one particular employee stays on board for a while. This may be useful when making promotion decisions.  

The second instance of retention - where a set of employees are considered all at once - involves calculating the total number of people who remain with a company within a specific time.

It could focus on all employees in a particular department, level, or hierarchical classification, or on the company’s entire human resource including senior, junior, and management staff. These two instances of retention provide valuable insights into employee satisfaction and average length of employment.

Just like you have the retention factor, there is also the turnover factor which talks about how many employees leave a company within a specified period. Companies can try to reduce turnover and increase retention by fostering work-life balance, providing increased compensation, and regularly offering training.

Engagement:

The degree of participation of an employee when it comes to activities around the workplace is what is known as engagement. Typically, a strong interest drives engagement.

And this one point makes it necessary for companies to review the way their activities are structured from onboarding to when an employee is fully settled in their role.

Engagement can spur employees to make useful suggestions and recommendations. The quality of a company’s decisions can be significantly improved by a high level of engagement from relevant employees in the decision-making process.  

Realizing good, solid engagements even from a few number of employees could go as far as keeping a company ahead of its competitors. So now, think of what it would be like to have all your employees highly engaged.

Getting such all-around results is possible when supplying the right tools, encouraging socialization, giving attention to individual employees, training, coaching, and recognizing hard work clearly and loudly.

Values Fit:

A quality hire will always enrich the company’s value system and follow strictly with such laid-down values. You will often find them challenging non-value-adhering processes and employees and playing their part in maintaining values as much as they can.

Having value-fitting employees is a box that every company must strive to tick regarding both their management and operation staff. Everyone plays a critical role when it comes to impacting company culture and helping to maintain it.

Specifically, the sustenance of good company culture will resonate into safety, a generally positive experience for employees and clients alike, and the achievement of company goals and objectives.  

Pre-hire Metrics:

Pre-hire metrics make it possible for HRs to start determining the quality of hire for an employee even before they hire and onboard them.

They are more like a forecasting tool and they work by measuring employee performance in the pre-boarding stage which we expressly described here in this article. Examples of pre-hire metrics to consider include:

Employee interview test scores:

Interview test scores are a great starting point for reviewing a prospective employee's performance. Their knowledge of relevant subject matters and the expression of intuition or creativity can all add up to their

Time to fill:

Time to fill refers to the time taken to fill a vacant role or position with a new hire. The time count begins from the moment when the decision to get a new hire is made or the moment when it becomes obvious that a new hire is required.

Time to fill formula = Number of days(day of offer acceptance - day of request for a new hire)

Time to hire:

The time to hire metric takes into account the number of days between when a new hire submitted their application and when then they are accepted into their new role.

Time to hire formula = (date of application acceptance - date of application submission)

Source yield:

The source yield metric takes two things into account; the various channels through which a company sources new hires, and the number of times each channel has produced a quality hire.

Despite its seeming usefulness, you will need to bear in mind that pre-hire metrics are limited by the single fact that they don’t provide any guarantee of the employee becoming a quality hire.

Why is Measuring the Quality of Hire Important?

Quality of hire is a relevant KPI that puts company goals, employee satisfaction, and high performance as top considerations during the recruitment of new hires.

Creates an Efficient Hiring Process: It is clear to see that measuring quality of hire can lead a company to create an optimized and efficient hiring process.

Reduces Redundancy in the Hiring Process: Secondly, understanding the quality of hire for all new hires reduces the chances of bringing in more employees than necessary. This helps to save a company’s time and prevent financial deficits through salary payments and resource management.

Sifting Employees: Another importance of measuring the quality of hire is that it provides a yardstick for sifting employees that are performing from those that are not, and employees that are adding to the company’s culture and value system from those that are not.

Conclusion

If you’re talking about recruitment, you should always remember that there are a whole bunch of KPIs that you could use to measure preboarding performance and equally estimate what a prospective employee’s post-hire contribution will be like. Out of these, the quality of hire seems to be the most complicated yet effective.

I will conclude by saying that you also need to have laid down premises that define the quality you are looking for from a hire. This should include loyalty, experience, personality, hard work, and common sense.

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