Quality of Hire: 8 ways to improve and measure it

If your last few rounds of hiring haven’t gone exactly well, you may be struggling with the quality of hire. Finding the right talent isn’t always easy, but it really should be.

In fact, when you dig down into quality of hire metrics, such as new hire attrition, employee engagement, hiring manager satisfaction and feedback from new hires, finding the perfect candidate can be a cinch.

Getting to grips with new hire performance metrics all starts with the Quality of Hire in your company’s hiring process. In this article, we’ll review exactly what that term means and cover:

• Why quality of hire is important
• 8 metrics to measure quality of hire
• 6 steps on how to improve it

First things first – what is the quality of hire?

Quality of hire – otherwise known as QoH – is a hiring metric that reflects the value a new employee brings to an organization. It’s a comprehensive way to measure how successful a new hire will be in their role, and it encompasses both the pre-hire and post-hire experience.

Pre-hire quality of hire measures can include assessment scores, while post-hire quality of hire measures can include things like time to proficiency or time to productivity.

By establishing a baseline for each of these measures, you can begin to see which factors correlate with successful hires to predict quality and achieve hiring success.

Why is the quality of hire important?

There are a few key reasons why you should care about the quality of hire:

1. The cost of hire metrics

For most companies, the cost of a bad hire is high – really high. The overall quality of a bad hire can cost you 30% of that person’s first-year salary, so it’s important to measure quality to make sure you’re hiring the right person for the job.

2. The talent pool

The war for talent is real, and it’s only getting more competitive. To attract and retain the best talent, you need to be able to show that you’re making quality hires. The best candidates are highly skilled and ambitious – and working with a similar caliber of people is a compelling incentive to join a team. Ultimately, the quality of your hires will give you a leg up in the talent acquisition process.

3. It affects your teams

The quality of your team has a direct impact on your company’s bottom line. The lack of a new hire’s performance can lead to a steep decline in employee engagement and other business outcomes.

8 ways to measure Quality of Hire

There are a few different ways to measure the quality of hire. The most common are:

1. End of probation period

The new hire has a set amount of time to showcase their job performance. After that, the company can decide to keep the employee or let them go.

In most countries and companies, the probation period for new employees is three months long – long enough to evaluate the hire’s on-the-job performance. The countdown will begin from the day the new employee starts to exactly three months in the future.

You’ll be given an accurate time frame as to when the new hire’s probation ends.

2. Ramp up time for new hires

This is the amount of time it takes for new hires to reach their full potential within the organization. Be aware that it will be different for each department.

It can take up to 90 days for a new hire to reach full autonomy.

Here are a few ways to measure it:

1. Observe and take notes during the first few weeks on the job. This is the most precise way to measure but also the most time-consuming.

2. Ask hiring managers how the new hire is doing after 30, 60, and 90 days. This is less precise but still provides valuable data for the process.

3. New hires reaching acceptable productivity

This metric is a variation of the ramp-up time metric. It’s the amount of time it takes until a new hire is productive enough to work on their own without assistance.

The main difference is that this metric looks at overall productivity, not just how fast someone reaches their full potential. To measure this hire score, you can use the same methods as you would for ramp-up time.

It is also worth putting milestones such as key performance indicators (KPIs) in place to measure job performance.

4. Hiring manager satisfaction rating

Hiring manager satisfaction is an important recruitment metric because it looks at how satisfied the hiring manager is with the company’s hiring process. Especially since they are not part of HR, hiring managers can provide valuable insight into how effective the recruitment process is.

Taken a few months after the new hire starts, hiring manager satisfaction surveys can help to optimize the recruiting process and therefore help ensure a better quality of hire. This is different from candidate satisfaction, which looks at what they think of your company’s hiring experience.

5. Job performance reviews

Performance reviews are a more formal way of measuring quality of hire and understanding how well a new hire is doing. It should be done by the hiring manager and include a score on a scale (1-5, for example) to assist in measuring quality.

Incorporate 360-degree feedback sessions into the organization. This allows employees to score themselves while also receiving feedback from managers and their peers.

6. Promotions

This is a lagging indicator, but it’s still a good way to measure the quality of hire. Promotion rate and promotion frequency are the common quality of hire metrics. Measured by tracking how many new hires are promoted within their first year and how often they were promoted since joining the company.

7. Culture fit

This is harder to measure as it is qualitative – but important nonetheless. A bad culture fit can be just as costly as a bad hire.

• Does the hire uphold and adhere to the company values?
• Are they a good representation of the organization?

Conduct exit interviews with employees who leave within the first year. This will give you insight into whether culture was a factor in their decision to leave.

Send out a survey to the team a few months after the new hire starts. This will give you a sense of how well the new hire is integrating into the team.

8. Employee turnover and retention rate

This is another lagging indicator, but it’s still a good way to measure the quality of hire. You can track how many new hires leave within their first year and use that as a metric.

You can also track retention rates – the percentage of new hires who stay with the company after their first year. This will give you a more complete picture of the quality of hire.

6 steps to improve the quality of hire

Now that you know what quality of hire is and why it’s important, let’s take a look at how you can educate your hiring managers to improve it.

1. Define what quality of hire means for your company’s long-term success

This is the first step in improving the quality of hire. You need to sit down with your team and define what a successful hire looks like. Only once you have a clear definition can you start measuring quality and working on improving the quality of hire.

• What skills and experience are required?
• What are the key indicators of success?

Invest in a good applicant tracking system (ATS), like Toggl Hire.

An ATS will help you track and manage candidates throughout the hiring process. It will also help you keep track of the quality of hire metrics.

2. Relying on a data-driven hiring process

This is the best way to improve the quality of hire. By relying on data, you can make better hiring decisions and effectively measure quality of hire.

There are a few ways to do this:

• Use quality of hire data to inform your hiring process. This data can help you tweak your process and make it more effective.
  
• Invest in a good background check company. This facilitates checking the candidate’s qualifications to give you peace of mind.

3. Create a quality-of-hire dashboard

This is a great way to track your progress and identify areas for improvement. By creating a dashboard, you can see which indicators are most important for your business and focus on those.

For example, you could incorporate these KPIs:

• Pre-screening score
• Knowledge
• Salary range
• Education
• Time to reply to emails

4. Aligning the hiring team with the right requirements

Are your hiring managers aligned with the requirements of the role?

If they’re not, you run the risk of hiring someone who’s not a good fit for the team. This can lead to a high turnover rate and a drop in productivity.

Create a candidate scorecard for hard and soft skills, the level of knowledge the candidate needs, and how long they have worked in specific or adjacent roles.

This provides an objective way to measure quality of candidates during the interview process and prevents the hiring team from acting on an impulse or improvising. If you’re focusing on the diversity of new hires as one of the key recruiting metrics, then instilling a structured hiring process is even more important.

5. Increasing recruiter productivity with a better recruiting process

Your recruiting process needs to be efficient and effective to maximize recruiter productivity. Otherwise, your hiring managers will struggle to filter out high-quality candidates.

For example, utilizing pre-built skills assessments is a painless method of having multiple candidates complete standard and knowledge-testing tests – without you spending much time on coming up with good questions and managing the whole process.

The Toggl Hire Test Library consists of over 15,000+ expert-created questions. Only the most qualified subject matter experts are accepted into our Expert Community.

By incorporating competency skills assessments into your hiring process, you can free up time for recruiters to focus on finding the best candidates. This will lead to a higher quality of hire and a lower turnover rate.

6. Improving the onboarding experience for new hires

How effective is the onboarding process?

Let’s be honest, candidates talk to each other, and a sloppy organization will lead to a bad name for you.

Assess whether candidates are:

• Walked through the principles of how the organization works
• Given hardware and system access in a timely manner
• Greeted by the team and their manager
• If there is an internal wiki that the new hire can utilize

By doing this, you can help new hires adjust to their new environment and get up to speed quickly. This will lead to a lower turnover rate and a higher quality of hire.

7. Keep track of former employees and use their feedback to improve your process

This is the final step in improving the quality of hire. You should keep track of former employees and use their feedback to improve your process.

By doing this, you can learn from your mistakes and make sure that you don’t repeat them in your future recruiting process.

In fact, an exit interview is a must for the human resource management department in almost any growing organization to help retain future quality employees.

Final thoughts on improving the quality of hire

Improving the quality of hire is a process, but it’s worth it.

Measuring quality of hire with the right hiring metrics is a top priority for any hiring manager. By taking the time to invest in a good process, you can improve the quality of your team and lower your turnover rate.

By following these steps, you can create a process that works for your business and helps you source and retain only the best candidates.

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