Do You Measure Quality of Hire? Most Teams Don’t, But Here’s Why You Should

With unemployment at a half-century low, recruiters and hiring managers are under more pressure than ever to find the right person for open roles faster.

This need for hiring speed can cause teams to rush the recruiting process as they prioritize maximizing efficiency and cutting costs.

But this “find-anyone” strategy ignores a key piece of the recruiting puzzle – candidate quality. Making a bad hire – one that ends up being a poor performer – can cost your company thousands, not to mention a loss in morale and productivity.

Finding the right person means attracting an employee who will be able to contribute to your company’s success. So, how can you tell if you’re hiring the right employees?

Meet the holy grail of recruiting metrics: Quality of Hire (QoH). Defined as the value a new hire adds to your company based on his/her contribution to its long-term success, tracking Quality of hire is key to building a recruiting process that attracts and retains top talent.

Though critical to successful recruiting, measuring this metric can be tricky since it depends on how your organization defines “quality.”

We surveyed JazzHR customers from all industries to learn about how small and mid-sized businesses are tracking their own quality of hire.

Wondering how you stack up? Here’s what we found.

Some don’t measure quality of hire at all

Only 64% of survey respondents said they currently measure the quality of their hires, while 36% don’t track this metric at all.

What’s this mean? Without measuring quality of hire, hiring teams have no idea how their current recruiting process is impacting company success.

Most aren’t getting a full view of candidate quality

Tracking quality of hire is a process that starts as soon as candidate’s enter your recruiting funnel. Once a candidate is hired, it continues throughout the employee lifecycle.

Still, only 20% of respondents said they’re monitoring this metric as soon as possible – before candidate’s are hired.

Though post-hire metrics, like performance and productivity, might seem more obvious, it’s just as important to consider quality of hire before an offer is made. Pre-hire metrics like assessment scores and engagement provide a fuller view of each hire.

Over half aren’t starting to track quality of hire until 90 days

58% of our respondents said they only start measuring quality of hire at the 90-day mark.

Start tracking quality of hire as soon as the candidate enters your recruiting funnel (using pre-hire metrics) and throughout their employee lifecycle for a comprehensive assessment.

So…how do you measure quality of hire?

As our survey results showed, you’re not alone if you’re only measuring one side of the quality equation – or not tracking it all.

Starting to track quality of hire is key to your team’s future recruiting success – follow the steps below to see how you can create your own QoH formula today:

1. Define what quality means to you

Talk to leaders at your company to define what employee success means to your organization. Which values and competencies do your leadership and team as a whole prioritize? Make a comprehensive list of employee success criteria, aiming to select four or five resulting data points.

Examples of these should include both pre-hire and post-hire metrics like pre-employment assessments scores, time-to-hire, ramp-up time, and productivity.

2. Quantify each piece of criteria

Assign a value to each chosen criteria based on its importance to your organization. Select point values and weights for each item in order to ultimately calculate a quality of hire score.

3. Establish a timeline and collect feedback

Once an employee has been on the job for anywhere between two and six months, send managers a survey to measure their impression of the new hire thus far. Have them rate each new hire based on your chosen criteria and point values. Pair these surveys with regular performance reviews where these same criteria should be assessed and rated.

4. Track results to prove recruiting ROI

Track quality of hire scores as you go throughout the employee lifecycle. Review them monthly to start, using the individual scores to calculate an overall score. This calculation should be an average of your success criteria and look like this:

Success Criteria 1 + Success Criteria 2 + Success Criteria 3 + Success Criteria 4) /4

Here’s an example of our quality of hire calculation:

(Pre-Employment Assessment Scores + Time-to-Hire + Ramp-Up Time + Productivity) / 4

What’s next?

Once you have a custom formula created, start tracking scores for each metric, employee, and the organization as a whole. Use the results to identify trends in your recruiting process and to prove the ROI of your recruiting process to leadership.

Here are some questions you may ask when assessing these scores to glean the most actionable takeaways:

Individual piece of criteria:

• Are there individual criteria where we’re consistently scoring low? If so, are these pre or post-hire?
• Are there ways we can adjust our process to target higher-scoring candidate’s in this area?

Individual employee:

• Is this certain employee consistently missing the mark on certain criteria?
• Is this person’s collective score trending significantly up or down?
• Can we provide this team member with resources to improve their score in certain areas?

Organization as a whole:

• How has our QoH score changed over time, and what external factors may be affecting this?
• Are certain departments/teams scoring higher or lower than others?
• If so, how can we adjust the way we recruit to standardize QoH overall?
• Are certain stages in our process prompting lower scores?