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Recruitment | 8 Min Read

How Can Organizations Improve the Quality of Hires

Introduction

Recruiters do their utmost to get the best talent on board. They run a tight ship, sparing no effort to ensure a balance is achieved in terms of the cost of hire, the time to hire, the candidate experience they offer, and, most importantly, the quality of hire. The success of a new hire is hinged on the recruiter’s skill. So, while a structured hiring process leads to finding great employees, the quality of hire, at times, falls short of expectations.

Quality of hire, a crucial recruitment metric, is helpful for understanding the viability and success of a company’s hiring process; however, quantifying its measurement is a difficult task for many. This article will explore the abstract concept of quality of hire, understanding it, how to measure the quality of hire metrics and high-quality recruitment solutions.

 


Quality of hire definition

Quality of hire (QOH) signifies the value added by new employees to your organization in the long term. Value, in this context, represents the degree of contribution of a new hire in driving organizational success. It indicates the level of success attained by the new hire in the long run. Additionally, it serves as a metric to assess how the recruitment process has fared for the organization.

Quality of hire is a pre-hire metric that addresses the candidate's performance at previous jobs or through past experiences. It measures post-hire metrics, including first-year retention, performance, and cultural fit.

Yves Lermusi
CEO, Checkster

Although quality of hire has always been an enduring concern, the pandemic-induced disruption sensitized business leaders to the importance of having the right talent in the right place for defining business success.

According to the U.S. Bureau of Labor Statistics, resignations peaked in July 2021 when 4 million Americans left their jobs. The last few months have seen resignations spike in the U.S. and worldwide.

Such figures underscore that gaining timely access to a quality talent pool is becoming a pressing priority for organizations. They need resilient individuals who can thrive in uncertainties, navigate new realities, and amp up their efficiency accordingly.

Previous research indicates how quality hiring contributes more to the company’s overall productivity. Top performing employees generate four times the output of an average employee. Getting talent that best fits their needs has become every employer’s foremost concern. But how can they ascertain that they measure the quality of hire in a way that works best for their businesses? Let us find out.

 

Quality of Hires_Image 1

 


What is the need for measurement of quality of hire?

Can you improve what you cannot measure? Absolutely not! Understanding your quality of hire metric is crucial to pinpoint the shortcomings, thus helping you adjust your strategies to achieve the desired outcome. While measuring the quality of hire can be an arduous undertaking, it is a vital metric that can provide actionable and valuable insights into your recruitment process.

Improved quality of hire scores can help organizations reduce overheads connected with identifying and retaining the best hires. In addition, it can help drive revenue growth for businesses if employees are at the top of their games and stay with their companies longer.

The quality of hire metric provides a better overview of your hiring process and the prospective candidates you attract. Still, it would be best to leverage the adequate tools when it comes to sustaining that talent.

Analyzing hiring quality is also crucial for assessing the job performance of the talent acquisition team. For example, are the organization’s recruiters sourcing candidates that best fit the company’s needs? How are new hires performing?

To ensure the best candidates are onboard, organizations must measure, track and minutely examine the quality of hire over time. This way, it is possible for organizations to achieve improved hiring processes and quality of hires over time.

It is also wise to associate the quality of hire metric with other metrics to enable data-driven fine tuning of your hiring strategy. For example, according to metrics, recruiting managers may observe that poor hires emanate from a particular hiring source – they can feed this helpful insight into future recruitment strategies.

 


How to measure the quality of hire?

Formerly, the focus was primarily on measuring what was readily available and calculable (performance ratings as a measure of candidate’s quality and time to fill as a recruiting measure). Now it has gravitated toward measuring the value new hires can add to the organization. One can implement various measures to analyze processes and outcomes, broadly categorized into pre-hire and post-hire measures.

Pre-hire metrics refer to recruiting effectiveness and efficiency. These metrics measure the success of your pre-hire process, which starts long before the candidate/new hire’s first day on the job.

Post-hire metrics consider the new hire’s performance, employee appreciation and satisfaction. These metrics are often used in measuring QOH to ascertain the new hire’s contribution to the organization.

Let us garner an understanding of essential metrics that are crucial to understanding what is going well and what you need to do to be better streamlined to achieve desired outcomes:

 

Pre-hire measures

Source yield ratio

Source yield ratio helps determine each source’s usefulness to direct your efforts to select those with the most favorable return on your hiring investment.

Source Yield Ratio = Number of leads acquired from source/ Number of applicants called for interview.

Time to hire

Time to hire evaluates the number of days since a candidate entered the pipeline until the acceptance of the offer. HR managers can monitor time-to-hire metrics to inform themselves of the recruiting process’s inefficiencies and adopt the measures required to remove obstacles and increase productivity in teams.

Time to hire = Offer acceptance date – application date

Time to fill

Time to fill is a measure of internal recruiting efficiency and considers the number of days required for filling an open position, from the date a requisition is created to the date someone gains employment.

Time to fill = Offer acceptance date – requisition date

Hiring velocity

Hiring velocity relates to the average time to get candidates from one step of the selection process to another. This metric indicates how fast and efficient the decision-making process at each hiring stage is. Using this information helps hiring teams to course correct and track improvements at the right time.

Cost per hire

Cost per hire is a vital HR metric that measures the cost inherent in recruiting new hires.

Cost per Hire = Total recruiting costs/ Number of hires

Interview scores

Interview scores serve as a decision-making tool for hiring managers and interviewers to rate a candidate’s performance. The scoring process involves rigorous rating in line with validated criteria and questions.

Interview scores = Sum of scores for each criterion/Number of scores

Talent assessment scores

Talent assessment scores that are grounded in empirical evidence are pivotal in determining candidates’ suitability for the jobs under consideration. For example, administering domain assessments enables HR professionals to ascertain job candidates’ suitability for any given position. Although there is no shortage of talent assessment providers, it would be best to partner with a reliable assessment technology provider with a global presence.

Offer acceptance rate

Offer acceptance rate is a crucial metric to help recruiters address prominent issues related to compensation or salary expectations. However, it would be best to resolve candidates’ salary concerns early in the process to keep such issues from arising.

Offer acceptance rate = Number of offers acquired/Number of offers given

Recruiting experience survey

A recruiting experience survey is a brief survey utilized by HR professionals to measure the candidate experience throughout the recruiting process. It helps identify underlying loopholes at any point, such as misinterpretation, communication lags, lack of access to information, among other factors. This tool also helps survey applicants who stopped communication without explanation to understand their perspectives.

 

Quality of Hires_Image 2

 

Post-hire measures

Time to productivity

Time to productivity is a post-hire measure of the number of days, from the date an offer is accepted to the date the employee achieved maximum productivity. This metric helps shed some light on the issues that may prevail during the onboarding phase.

Time to productivity = Date of full productivity – Date of hire

End of probation review

End of probation review is a focused assessment at the end of the probation period to understand the extent to which candidates settled in their new roles or the efficacy of the onboarding process. This periodic review should be benchmarked to avoid unconscious biases. Also, one can make it a point to conduct surveys of new hires on the onboarding process to understand how well they were being assisted in the new job.

Onboarding survey

Onboarding survey is a valuable tool to gain insights into the onboarding experience of new hires to identify how well they adapt in their roles or if they experience any challenges, and how they receive support during the ramp-up process.

Job compatibility

Even though a poor job fit often becomes visible during the ramp-up process, it can stay unnoticed.

A net hiring score (NHS) measures the fit between the jobs and new hires using a three-pronged approach:

  • Question for the hiring manager: How suitable is this new hire for the role on a scale of 0-10?
  • Question for the new hire: How well is the job aligned to the hire's expectations on a scale of 0-10?
  • The percentage of perfect fits (responded 9-10 questions) - The percentage of poor fits (answered 0-6 questions) x 100.

A score <0 represents wrong hiring, whereas a score of >0 indicates hiring highly compatible candidates. A score of 0 signifies a neutral impact on the business.

360-degree feedback

360-degree feedback is a holistic performance review process that can also work wonders for determining new employee performance from multiple viewpoints.

Personality assessments

Personality assessments can help assess an employee’s key personality traits that influence cultural fitment, job performance and trainability.

Hiring manager satisfaction survey

The hiring manager satisfaction survey uncovers essential information about whether a new hire is a good fit and helps managers identify improvement opportunities.

Rewards and promotions

By assessing the career progression trajectory of new employees, companies can easily identify the quality of hires. How quickly a new hire climbs the corporate ladder will indicate the job fit of that individual.

 

Measuring quality of hire using an example

 

Company X wants to assess the quality of hire for an employee, keeping job performance, employee satisfaction, and manager satisfaction as key indicators. We can express this arrangement in the equation form:

{Job performance % + employee satisfaction % + manager satisfaction %}/3

Noteworthy here is this calculation applies when all the indicators are based on the same scale, i.e., they are graded out of a consistent figure, such as 10, 100, etc.

In the case of the abovementioned example, we can assume that:

  • The employee scored 85 out of 100 (85th percentile) in his/her performance review.
  • The superior gave a score of 80 out of 100 (80th percentile) via the new hire satisfaction survey.
  • The new hire gave a score of 85 out of 100 (85th percentile) in their engagement survey concerning job satisfaction.

It leads to this equation:

{85% + 80% + 85%}/3

Therefore, the quality of hire score is 83.3% for this employee. By comparing this score to others’, employers can understand how their hired candidates fare against other individuals in their organization.

 


Ways to improve your quality of hire: A 3-step process

Knowing the intricacies of how some factors can impact the quality of hire metrics can help you strategize effectively and efficiently, some of which are listed below:

 

Leveraging the right data

 

Recruiting teams should have the right tools to collect and utilize pre-hire and post-hire data.

 

A) Pre-hire data:

Scores of psychometric assessments, technical assessments and interviews.

Insights from AI-based candidate screening software.

 

B) Post-hire data:

Data based on new hires’ engagement self-assessment and managers’ satisfaction ratings.

Measurable data such as time to competence, number of promotions, etc.

Establishing the relationship between pre-hire and post-hire data will help uncover many crucial insights pertaining to improving hiring quality.

 

Simplifying hiring workflow

 

A vast majority of recruiters believe they are burdened with their workload and challenges regarding reviewing and recruiting candidates for various positions. Streamlining their recruiting workflow can help them reduce their time to fill significantly.

Best practices for simplifying the recruiting workflow

  • Expediting the screening process through automated assessment software.
  • Analyzing job conversion rate to find scope for improvement.

 

Aligning hiring managers on the QOH goals

 

Most hiring managers are not strategically aligned with the QOH goals. Recruiters can partner with hiring managers during a recruitment kickoff meeting to discuss the parameters of a quality hire. Besides, the use of tools such as interview scorecards can enhance the efficacy of the interview process. Most importantly, rolling out training plans for new hires would help start them off on the right foot.

 


Top HR technologies to enhance the quality of your hires

Technology supports making the recruitment process effective and efficient with the help of data. Numerous innovative tools and software are bringing ease to the lives of HRs (Human Resources) by ensuring a hassle-free recruitment process, which is cost and time efficient. As a result, organizations adopting and implementing HR technologies have experienced positive changes in their recruitment cycles.

 

Psychometric and cognitive assessments

 

Psychometric and cognitive assessments are efficient tools in the pre-hiring process. According to Martin Luenendonk, Co-founder and CEO, Cleverism, these assessments minutely assess the candidates’ ability to perform in multiple situations. They give an idea of individual and team performance and how employees respond to certain conditions like short deadlines and more.

CareerPlug HR Director Natalie Morgan also uses personality and cognitive assessments for their open positions. The assessments prove effective by giving the company jumping-off points to ask more profound questions during the interview process.

 

 

Psychometric Assessments can be used for:

 

Quality of Hires_Infographic 1 & 2

 

Technical and coding tests

 

Technical and coding tests help evaluate job applicants based on their subject matter expertise. Companies using role-based assessments hire quality talent suited for a particular job role. Sharing their experience in using personality tests in unison with technical tests, Jeremy Harrison, Founder, Hustle Life, says, “This way, we can gauge potential candidates who fit our company culture while also fulfilling technical skills and abilities needed to perform and excel in the job.”

Stating how MTEQ also employs coding tests during hiring, Chelsea, Associate Director, Talent Acquisition and Employee Engagement, says, “We ask all software engineering candidates to respond to a coding prompt. This is highly effective in determining which applicants possess the required problem-solving skills to be successful on the job.”

 

Quality of Hires_Infographic 3

 

Hackathons let you assess the candidates' skills quickly and accurately. Hackathons and ideathons are a great way to dip into talent pools and filter out a bunch of high-potential candidates at a time.

Jagoda Wieczorek
HR Manager, Resumelab

 

Quality of Hires_Infographic 4

 

Structured interviews

 

Over 80% of best-in-class organizations invest or plan to invest in top-ranked recruitment software.

Talent assessment software helps organizations track a candidate’s progress, from sourcing to hiring. They contribute to the successful recruitment of employees, as well as to the effective automation of tasks. Thus, it saves both time and money. Recruitment software is also a communication point between the company and the candidates. HRs globally believe in the effectiveness of a structured hiring process.

Anshul Meshram, talent acquisition specialist, LAVA Mobiles, also concurs that leveraging HR technology tools such as an Applicant Tracking System (ATS) integrated with video interview tools. Remote proctoring, and in-built competency-based talent assessments, can enable easy scheduling of interview rounds. In addition, user-friendly, cost and time-efficient software allows seamless execution of the hiring process, right from information gathering to taking data-based selection, all integrated into a single platform.

 

Quality of Hires_Infographic 5

 

Structure your hiring process by integrating the power of three systems into one data-backed platform

 

Additionally, video interviews help assess a candidate’s skills before being called for a face-to-face interview. They have in-built video recording, skill-testing (simulator), and candidate grading features absent in a typical video conferencing or video chatting tool.

of firms use real time video interviewing for hiring, while 50% use it for shortlisting candidates.

 

Quality of Hires_Infographic 6

A structured interview better aligns the hiring process as it enables you to:

  • Test candidates’ hard and soft skills.
  • Observe their seriousness and attention to the task.
  • Understand their potential to work in multiple scenarios.
  • Remotely check the response time.
  • Gauge the applicants’ ability to understand and participate in long-distance meetings and training.

 

Virtual assessment centers

 

Virtual assessment centers are an intrinsic part of the recruitment cycle. They assist in decreasing the scope of error, lowering the overall turnover and increasing the chances of hiring high performers.

 

 

Being the online replica of physical assessment centers, virtual assessment centers provide a comprehensive view of candidates while upholding the sanctity of physical assessment centers. Like traditional exercises, virtual assessment centers have a set of exercises performed in a simulated environment.

These tools are administered online and have the functionality of automated reports. They further help reduce logistical hassle, manual intervention and the additional cost of in-person assessments while ensuring the accuracy of the test result.

 

image 3

 


Conclusion

For companies to successfully measure the quality of hire, they must consider both pre-and post-hire metrics. While attracting talent is critical to competing for talent, the key to the success of the quality of hire lies in the process commencing with the interview and concluding with the offer. Companies that use technology during the initial and later stages have a better understanding of a candidate and gather more meaningful information beyond what is found on a profile or in a resume, in turn, building a sustainable talent pipeline.

Originally published March 4 2020, Updated April 6 2022

Abhilash Malguri

Written by

Abhilash works with the Content Marketing team of Mercer|Mettl. He has been contributing his bit to the world of online business for some years now. Abhilash is experienced in content marketing, along with SEO. He’s fond of writing useful posts, helping people, traveling, and savoring delicacies.

About This Topic

The primary objectives of recruitment and selection are to ensure high-quality candidates who are culturally fit and work toward shared organizational goals and vision.

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