A Quick Guide to Quality of Hire [Infographic]
Building an effective hiring process involves more than filling positions quickly. To truly gauge effectiveness, you need to measure your quality of hire.
Quality of hire (QoH) is the measurement of the value new employees bring to your company over time. Here’s why quality of hire matters, how to measure it, and ways to improve it.
Download an infographic summarizing these tips here.
Why Quality of Hire Matters
QoH is crucial because poor hiring decisions are costly. A bad hire can cost an organization between $15,000-$17,000, and employee turnover can cost 0.5 to 2 times an employee’s annual salary. Beyond monetary costs for rehiring and training, a poor hiring decision lowers productivity and damages team morale. Measuring quality of hire helps identify issues in your recruiting process, so you can ensure you’re bringing talent that stays and performs.
How to Measure Quality of Hire
Measuring QoH isn’t one-size-fits-all, but here are some key metrics to get you started:
- Hiring Manager Satisfaction Surveys
Ask hiring managers to rate new hires after a few months to gauge their performance. - New Hire Engagement Surveys
Measure the engagement levels of new hires to see if they’re thriving in their new role. - New Hire Retention Rate
Track how long new employees stay. High turnover might indicate issues in the hiring process or workplace environment. - New Hire Performance Metrics
Compare new hires’ performance to expectations and benchmarks within their role. - Performance Reviews
Use these to get subjective but valuable insights into how new hires are doing. - Employee Lifetime Value (ELV)
Calculate the value an employee brings over their tenure.
Combining these metrics gives a comprehensive view of your quality of hire. For instance, you can average your ELV, hiring manager satisfaction, and new employee turnover to get an overall quality of hire rate. Use the below formula to calculate your quality of hire:
Quality of hire (%) = indicator % + indicator % / number of indicators
How to Improve Quality of Hire
Improving your QoH starts with identifying the weak points in your hiring process. Here are some tips:
- Collaborate with hiring managers
Ensure recruiters and hiring managers are aligned on job expectations. - Write clear job descriptions
Be specific and inclusive to attract the right candidates. - Implement a better screening process
Leverage pre-hire assessments and standardized interviews to accurately and objectively identify top talent. - Use data wisely
Track and analyze hiring data to find patterns and improve practices. - Involve the team
Include potential team members in the interview process to assess fit. - Consider cultural fit
Ensure candidates align with your company’s culture without bias. - Remove bias
Use AI tools designed to reduce bias and improve hiring efficiency.
By focusing on these areas, you can significantly enhance your quality of hire, leading to better employee retention and overall organizational success.
Measuring and improving the quality of hire is essential for any organization. By focusing on the right metrics and making strategic adjustments to your hiring processes, you can ensure that you bring in top talent that succeeds and stays long-term.
