Quality of hire metrics are essential in understanding how effective your hiring process is in delivering the candidates (and the results) you want from your recruiting efforts.
You wouldn’t approach your marketing strategy without looking back to assess your returns, so there’s no reason to do it with your most important asset: talent. When you're responsible for keeping a large body of frontline positions staffed, every hire costs you about $4,500. Add an extra $18,000 for every 10 people you employ and you begin to see why measuring quality of hire is incredibly important.
But what exactly is quality of hire, and how do you measure it?
Broadly speaking, quality of hire represents a company-specific index of the businesses values and goals. While employees are there to help the organization accomplish a specific mission, their success - just like that of a business - isn’t determined by how well their work is described. Tangible, measurable outcomes tell far more about an employee’s ability to get the job done and advance the company’s goals.
The Bespoke QoH Metric
Steve Jobs once said, “When you have really good people, you don’t have to baby them.”
Quality of hire (QoH) metrics let you assess every aspect of your hiring process as it relates to productivity and employee ROI.
In essence, quality of hire metrics and assessment scores tell you more about staff than interviews can. Your quality of hire metrics should measure traits uniquely important to every role. For example, high-performing salespeople have been found to have emotional stability, openness to experience, and cooperativeness.
But how to measure quality of hire is where some of us can get lost in the weeds.
For instance, using resume quality, or judging candidates based on a high G.P.A. on a resume, can lead to hiring candidates who aren’t a good fit.
Additionally, many businesses lean heavily upon tenure and longevity at an organization to determine quality of hire. However, as can be seen in many cases, evaluating QoH using criteria that aren’t performance-based can lead to reduced performance metrics. For example, many union organizations have long tenure and poor performance with few options to exit those employees.
Measuring the quality of the employees you hire should rely on employee productivity, expressed in terms of produced money, the time in which he or she accomplishes tasks, and other metrics established according to the job description.
Answers to questions like “what does it takes to be successful in the job?” and “what type of qualities drive a particular level of performance?” become much clearer when employee progress is measured through the collection and analyzation of meaningful data.
Developing Data-Driven Quality of Hire Metrics
Grading performance according to a comprehensive hire report card helps you gather the data you need to evaluate your own HR choices and hire more high-quality candidates.
4 critical metrics to drive your QoH are those that assess:
- Macro trends that compare those in the talent pool
- Personality, lifestyle, values, and other psychographic data
- Pre-employment test results that include behavioral analytics and how they apply to predictions of performance.
- Key performance indicators or core competencies focused on job outcomes. This metric is specific to industry and role. It needs to be assessed according to the position's job analysis and goals you have for those positions.
Broader QoH metrics might include:
- Feedback from the candidate's references
- Whether they are currently employed and/or have offers from other employers
- Core revenue impact ratios related to the timing of your hire
- Background screening results
Additionally, these metrics should include assessment of the vendors and hiring firms that are producing the best talent. By determining which event, social network, online job board, or referral source provides you with the largest number of qualified candidates, you can maximize the value of your sourcing channels to find the best candidates.
Using QoH to Find Staff Superheroes
A company with quality of hire controls can also raise the talent bar. While the tradeoff to higher standards is having to source more people for the job, by casting a wider net, the employees you hire will not only consistently deliver the results you want and likely stay longer, but could potentially have a positive and morale-boosting impact on the rest of your staff as well.
One study published by the Journal of Applied Psychology found the dynamic of many workplaces can be strongly (and positively) influenced by a single member the researchers refer to as an “extra miler.”
Extra milers are essentially those who boosts motivation, put in extra hours, and expend more effort than the rest. The University of Iowa found that extra milers lead through helpfulness and make constructive suggestions and act as an asset to both your company and their colleagues by offering support to overwhelmed co-workers.
By establishing what a quality hire looks like based on your business's mission and goals - as well as your highest-performing incumbents - you can identify more staff superheroes and position them in a way that maximizes their contact with every other team member. And when you get your quality of hire right, it shows in your bottom line. McKinsey found good hires raise the productivity of their roles of their roles by 40%, and engaged staff are 50% more productive.
The Payoffs of Measuring Quality of Hire
The hiring process doesn’t necessarily end when someone accepts an offer. An employee’s performance and longevity in the company can inform front-end assessments and applicant screening tools.
If you manage to hold onto staff for 90 days, your odds of retention soar radically. If you continually readjust according to the quality of hire metrics you collect, you'll see annual improvements in your talent selection that will push your profits into a new dimension.