The Case for Measuring Quality of Hire

Monday, October 2, 2017
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Measuring quality of hire is not as simple as just looking up a few numbers or checking a box. It requires a concerted effort from each organization to closely examine what it truly values from its people and doing what it takes to get an accurate, useful measurement.

But as research shows, the effort is undoubtedly worth it.

While reports vary as to the number of recruiting departments that do measure quality of hire, it is clear that there is a tremendous opportunity for your organization to get on board and stand out. Fortunately, executives are finally acknowledging how important talent is to their success, so momentum is building for putting more Quality of hire measurements in place. This is vital as the increasing demand for top talent has made quality candidates harder to find than ever before.

What to Measure

The basis for everything during the quality of hire measurement process comes down to one question: "How does our organization define success?" Whatever the metric -- retention rate, time to productivity, financial impact, etc. -- the data needs to be able to be measured objectively to show how it supports that definition of a successful hire.

Look for the key performance indicators on an individual level, and ask yourself what a person in this role should be achieving to add value to the organization. Keep in mind, however, that no single role can determine success for another. The quality measurements for your organizations' graphic designers, for instance, will be different than the measurements for your sales team.

Because of the perceived complexity of finding the right measurement for each department and each role, relatively few organizations have successfully defined quality of hire for their business. This is despite the fact that most leaders agree it is a vitally important metric.

How to Measure

Just as every organization will define success differently, how it is measured will also vary.

Hiring manager satisfaction. This is the most common method organizations use, gathering a personal assessment of whether the hiring manager was pleased with the recruiter's performance. Delivering quality hires consistently is what hiring managers say they desire most from their talent acquisition teams. Tracking their satisfaction with the recruitment process shows how well recruiters are aligned with hiring managers' needs and expectations.

Reduced attrition. Generally speaking, the longer an employee stays at your company, the more valuable they become. The minimum desired retention duration to be labeled a quality hire (or probation pass) may be months or years, depending on seniority and average tenure.

On-the-job competency. The organization defines clear competencies (at an organization-, function- or role-level) and assesses each criteria at defined intervals. Quality is "achieved" when the new hire is meeting a predefined level of competence (time-to-productivity).

Personal achievements. Employees who are highly satisfied in their role and at their company are more engaged and effective. They challenge themselves to hit stretch goals, get more involved in their work community and push for better business results. Measuring cultural fit can be just as important to quality performance as assessing competencies.

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Business outcomes. The new hire as an individual delivers results that have a direct impact on quantifiable business outcomes (e.g., revenue growth, sales-per-hire, error rate, etc.). This approach is well-suited to volume roles or senior leaders where measurable outcomes are clearly defined.

Why Measure?

High performers help your business. They outperform their low-quality peers across all major job roles:

  * 40 percent more productivity in operations roles

  * 49 percent more profit in general management roles

  * 67 percent more revenue in sales roles

Why wouldn't you want more of these people? Effectively measuring quality of hire will help you spot them by creating a base of metrics to benchmark from. Through your measurements, you should not only understand how your organization defines success, but how each individual in the organization contributes to that.

No single metric perfectly captures quality of hire. You must start with a basic understanding of the traits that matter most to your organization -- by role -- and increase your sophistication as you learn. Do not wait until you think you have perfected the process to start measuring, or it will never happen. Begin with the end in mind and tie your measurements to business outcomes and financial impact. Frequently assess your quality of hire and how you can take steps to make it better. The future of your organization depends on it.

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