How to Improve Your Quality of Hire

An organization’s success is dependent on the quality of its workforce. Dedicated, skilled employees empower businesses to maintain the high standards of their day-to-day, navigate uncertain periods of change, and drive the company forward towards its future goals.

But understanding what makes a good employee, let alone locating, acquiring, and retaining one, can be a complex thing to track. Historically, the subjective nature of quality of hire has proven elusive and inactionable, even to the 48% of organizations that actively engage this metric.

Despite this, quality of hire remains a critical datapoint to measure. The question then becomes, what improvements can you make that will allow your quality of hire metric to actually work for you? Let’s dive in.

What is quality of hire?

Quality of hire as a recruitment metric measures the value that a new employee brings to the company over time. The quality indicators your organization chooses to include may depend on your specific values and even industry, however most QoH results will include a set of typical KPIs that help to standardize the result. Some key factors within this larger metric include:

• Employee performance.
• New hire fit.
• Time to productivity.

Quality of hire can be measured over different time periods, such as in the first 90 days, quarterly, and yearly. Gathering QoH over the long-term requires patience and dedication, but allows your organization to more easily locate quality hires in future recruiting endeavors.

Learn more about the Quality of Hire metric here: What is quality of hire, and why does it matter?

Taking a data-driven approach to improve quality of hire

Tracking quality of hire is critical to ensuring the future success of your company. But subjective stats gleaned from QoH may prove useless if they are uninformed by data.

"[Tracking quality of hire] has typically been based on someone working from an Excel spreadsheet, making a subjective decision, looking at performance and tenure,” says CrossChq CEO Mike Fitzsimmons. “Every company had its own interpretation, and there was no real process or machine precision behind it.”

There is no way to make a universal standard for quality of hire. However individual organizations can create standards within their QoH that drive consistent and actionable results. Tying your quality of hire to tangible data will allow this metric to finally start having a real impact.

Understanding the quality of hire metric

Quality of hire is an amalgamation of a number of other employee-specific KPIs. Put together, these generate a numeric value which defines the worker’s overall quality and contribution to the organization. 

To calculate quality of hire in this way, each KPI (such as job performance, fit, engagement, etc.) should be given a ranked value. For example, each KPI may be ranked at a maximum of 100, with the employee scoring a number within that ranking that accurately reflects their quality within that KPI. Each ranked value should then be added together, and divided by the number of KPIs being taken into account.

As a formula, that looks like this:

QoH = (KPI 1 + KPI 2 + KPI 3)/# of KPIs

Of course, there will be nuance and context that should be considered when a manager or other decision-maker is looking at the result of this metric. But engaging the numbers-based version can help make things easier, and comparable between individual employees.

What leads to a bad quality of hire?

A bad hire will cost a company both in direct expenses as well as in time and labor lost when a new employee needs to be replaced. Here are some of the things that might contribute to a poor QoH score.

• Poor performance. If a new hire is unable to do their job well, this will have a huge negative impact on their QoH score.
  
  

• Poor cultural fit. Being unable to align culturally with the values of the organization can be detrimental to the employee’s performance, as well as their QoH.
  
  

• Lack of necessary job-specific skills. While addressable with training and support, this lack will hurt employee performance as well as other KPIs such as time to productivity.
  
  

• Poor engagement. Engagement allows employees to grow, and if this engagement is not occurring, the employee will fail to reach their full potential within the organization.
  
  

• Poor attitude. A willingness to try can be more valuable than any of the other statistics. If this willingness is not there, however, the employee may be more harmful than helpful to the company.

Uninformed use of the QoH metric can also contribute to a bad hire. If organizations are measuring the wrong KPIs or failing to take action when a poor QoH is indicated, this can trend towards consistent poor hiring practices.

Let’s talk about how to fix these problems in the next section.

How to improve quality of hire through data

Improving quality of hire may take years – but the outcome of an effective, efficient hiring strategy is well worth it. Here are a few pre and post-hire datasets to consider.

Pre-hire:

• Use scores from reference surveys to discern QoH from the worker’s past employment.
• Incorporate job skill assessments into your process to indicate potential performance.
• Resume screening scores measured against your ideal candidate profile can help to determine whether the employee will be a good fit.

Post-hire:

• Track employee performance and productivity using numeric indicators to give you an easy-to-compare method of tracking performance improvement over time.
• Regularly solicit managers for satisfaction scores regarding their direct-reports.
• Track employee engagement with things like Learning and Development.
• Regularly solicit employees for self-assessment scores which indicate their goals and pathways within the company.

The trick here is to remove as much subjectivity as is possible from your employee screening process. Again, you should take into account the nuances of each employee score, but even these may be incorporated into your QoH measurement to deliver an actionable result.

The benefits of improving your quality of hire

Used correctly, the quality of hire metric can lead to a number of tangible benefits for your organization.

• Organizations with engaged, high-performing workforces may be as much as 24% more profitable than those without.
  
  
• Increasing employee performance by as little as 10% can boost your company’s bottom line by 100%.
  
  
• QoH allows you to purposefully create a strong workforce culture, which works to attract talented job seekers who want to contribute to the company.
  
  
• Prioritizing QoH now can help your company avoid problems related to projected future talent shortages and other unknown challenges. A quality workforce can be the support your company needs to navigate uncertain changes.
  
  
• Getting a sense of the training needs your new hires have by tracking QoH can help you to develop more supportive L&D experiences, which 70% of respondents say would get them to leave their current company.

Getting started with quality of hire

Quality of hire can be a hugely impactful metric to track, but only if you know what you’re doing. Harnessing readily-available data to inform this statistic will allow you to build better hiring practices, drive employee performance, and take on the challenges of future markets.

And CrossChq is here to help. Learn more about how our solution supports actionable quality of hire here.