Why Measuring Quality of Hire Is Imperative in the War for Talent


The quality of hire indicates how much value a new employee brings to your company. It is a critical metric to help shape your future hiring strategies, especially in a competitive labor market. We discuss five reasons to measure the quality of hire.

Right now, companies are witnessing a tough hiring landscape, with new jobs being added every day even as talent supply struggles to keep up.

The JazzHR SMB Recruiting Report 2019Opens a new window (email required) noted that U.S. companies made 5.9 million hires in 2019, indicating a 4.4% year-over-year increase. In several highly skilled areas, demand often outpaces supply – making it essential to have an effective hiring strategy in place. By measuring key metrics such as quality of hire, you can ensure that your hiring strategy improves with every recruitmentOpens a new window cycle, building a high-performance workforce over time.

As Corey Berkey, director of human resources at JazzHR, tells us, “Measuring the quality of hires is critical to understanding the effectiveness of your recruiting process and proving its strategic value to internal stakeholders.”

But the JazzHR study also found that 33% of the 5,000+ respondents do not assess the quality of hire at all. Let’s consider why this metric makes such a big difference in the war for talent.

Learn More: Recruitment Metrics You Should TrackOpens a new window

5 Reasons Why Quality of Hire is an Important Metric for HR

Quality of hire refers to the long-term and short-term value every recruit introduces to your company. In the short term, it implies the speed and efficiency of hiring, while the long-term value is measured through employee performance, culture fit, and business outcomes. In other words, the quality of hire metric includes a wide range of variables that make up the success index of each hire. 

Expectedly, there’s no single metric or indicator that is used to measure the quality of hire. For instance, a manufacturer might define a good hire based on how many items a new employee can produce within a specific timeline. On the other hand, an excellent hire in the education sector could be someone with excellent communication skills, who builds an immediate rapport with the students. Communication skills will have to be quantified further to then calculate the quality of hire. Similarly, the average time to hire would vary across industries and locations, thereby setting a unique benchmark for the ideal quality of hire. 

It is for this reason that Google Hire recommends a customizable formula Opens a new window to measure the quality of hire: 

([Indicator #1 + Indicator #2 + Indicator #3…] ÷ the total number of indicators) x 100

Once you have a clear understanding of what quality of hire means, it is vital to recognize the reasons for measuring it. Here are five factors to remember: 

1. Bad hires can lead to high costs

If a recruit isn’t ready to take on the assigned role, companies will need to invest in elaborate training sessions, as well as a long hand-holding period, before the employee reaches optimal productivity. Apart from this, poor quality of hire can be correlated with an overlong hiring cycle, leading to additional costs.

Finally, an unsuitable hire may decide to switch to a more suitable role – within or outside the organization – thereby causing further expenses in hiring and fresh training. 

2. Excellent quality of hire could benefit your company’s culture 

Bad hires often indicate a recruit who is a poor culture fit. They could introduce conflicts in the workplace environment, disturb existing workflows, and negatively impact the company’s culture as a whole.

By measuring the quality of hire, you ensure that only candidates who are a good culture fit or a culture addOpens a new window are onboarded into the workforce. A great hire can also dramatically improve the elements of positive culture, such as employee engagement and diversity and inclusion. 

3. Quality of hire analysis drives smarter strategic decisions 

Without visibility into the effectiveness of previous hiring tactics, it is nearly impossible to improve future strategies. For example, a company could be using a sourcing channel that’s historically linked to bad hires. By measuring the quality of hire using the effectiveness of sourcing channels as one of the indicators, HR leaders can direct investments in the hiring process more intelligently.

This is more critical in today’s labor economy, where top talent is sure to be acquired by a competitor unless you carefully devise your hiring strategy. 

4. It quantifies the outcomes of using recruitment technology 

This is among the top reasons for measuring hiring quality at regular intervals. HR tech continually evolves, and every iteration will modify your hiring process – hopefully, for the better. How can you quantify the outcome of these changes and obtain buy-in for the most effective technology?

A quality-of-hire dashboard maps the outcomes of recruitment strategies over time, linking them to the technologies in use. This can help to redefine your recruitment tech stack, configure the solutions to measure different metrics if required and get buy-in from leadership for future tech purchases. 

5. Measuring the quality of hire provides insights into the candidate experience 

Excellent candidate experienceOpens a new window can be a game-changer in winning the war for talent. But it can be challenging to pinpoint gaps in the quality of experience across the application to screening and selection process. When you offer a positive candidate experience, it can improve the overall quality of hire. And measuring the quality of hire can highlight gaps in the candidate experience if any.

Quality of hire surveys would ask new employees to rate the candidate experience, thereby detecting any gaps or areas of improvement. For example, a detailed survey would ask questions like, “did you receive a response within X days of application?” This reveals the recruitment team’s response capacities and allows for improvement in the candidate experience strategy.

Learn More: How Data Can Optimize Your Small Recruitment BudgetOpens a new window

The Way Forward in 2020: Factoring in Pre- and Post-Hire Metrics to Measure Quality of Hire

As is clear from the five factors we discussed, both pre- and post-hire metrics play a role in measuring the quality of hire. 

Costs arising from poor performance can be calculated through performance reviews after the hiring process is complete. Similarly, the impact of recruitment tech on your organization’s business goals to obtain leadership buy-in can be assessed only in the post-hire stage. But candidate experience and sourcing channel effectiveness are pre-hire metrics, and they deserve equal attention. 

“To effectively calculate a new employee’s contributions to your company’s success, HR teams should look at both pre- and post-hire metrics. Consider tracking pre-employment assessment scores and time-to-fill for pre-hire quality, while focusing on performance and productivity for a post-hire evaluation,” agrees Berkey. 

Fortunately, cutting-edge technology can help HR accurately evaluate this breadth of factors that make up the quality of hire. Consider a tool like TalenyticsOpens a new window , which analyzes business performance, candidate satisfaction, manager satisfaction, and ROI to find out how successful your hiring campaigns are. The platform has dedicated modules for pre- and post-hire stages, as well as a proprietary Q-Chartâ„¢, to visualize the indicators your stakeholders choose to define the quality of hire.

As you gear up to attract and acquire the best talent out there, measuring the quality of hire should be a business imperative. It can route your hiring spends in the right direction and improve candidate experiences and culture fit like never before. This will be critical as you reimagine your recruitment pipeline with a focus on sustained quality in 2020.

How closely have you considered the quality of hire at your company? Tell us on FacebookOpens a new window , LinkedInOpens a new window , or TwitterOpens a new window . We’d love to hear about your experience!