Everything You Need to Know to Ensure Quality of Hire
What is Quality of Hire
Employers and HR professionals are recognizing the importance of integrating empirical metrics into the hiring process to improve the quality of the hiring process and employee turnover. And of course, with the growing world of data science and numbers, metrics such as quality of hire, are gaining more and more importance within the recruitment process.
Despite what the name and nature of quality of hire suggest, in essence, the concept is quite straightforward. Very simply speaking, quality of hire measures the value the hired employee brings into the firm or company they have been hired into. Meaning, the employee’s contribution is measured, by their successes or lack thereof and their time in the company and how that adds to the employer’s success and growth. From a more holistic point of view, the employee’s performance is not only used to measure their success relative to the firm but also the success of the overall hiring process.
The Relevance of Quality of Hire
Because the quality of hire measures not only a particular employee’s productivity but also how it adds to the success of the entire firm or whatever organization they join, it is one of the most important means of measuring KPI. Where the term KPI stands for Key Performance Indicator and is used to measure the success of an organization and whatever particular activity they are engaging in, in this case being the quality of hire.
Compared to most other KPIs, quality of hire is considered the best in terms of hiring strategies given the fact that it singles out the best performers that enhance an organization’s performance. Research shows that 39% of leaders consider the quality of hiring the best metric to hire employees since a top-performing employee can guarantee nearly four times as much productivity as a regular employee.
How to Measure Quality of Hire
The quality of hire process is a metric based mathematical system, and as it is with any and all arithmetic based data, there are several formulas that can be applied to figure out the quality of hire, however, the essential formula is:
QUALITY OF HIRE: INDICATOR %+INDICATOR % / NUMBER OF INDICATORS
What this formula essentially does is break down hiring indicators into numeric values (percentages are ideal since they allow for cleaner calculations). This formula is not only useful when it comes to calculating a single quality of hire, but in measuring the quality score of the organization in regards to the recent hires it has made.
Since something as abstract as indicators is being quantified to reach a certain response, there can be many ways around calculating the quality of hire, where it depends on the kind of indicators the employer will be taking into account. However, keeping that in mind, the overall quality of hire can also be calculated through the given formula:
Overall Quality of Hire (%) = (PR + HP + HR) / 3
Where, PR is the average job performance rating of all new company hires, HP is new hires with acceptable ramp-up time to reach full productivity and HR is new hires that are retained after one year of employment.
While strict adherence to the following formulas is not strictly necessary, the use of such means of quantifying allows for a clear calculation of quality of hire following every organization’s needs.
Indicators Measuring Quality of Hire
Indicators are key factors involved in measuring the quality of hire, and while different organizations use different indicators to measure the quality of hire, the main indicators can be broken down as follows:
1. Job Performance
Job performance is generally estimated through the reports’ of performativity or productivity by the supervisors. LinkedIn numbers show 50% of employers consider performance reviews to measure productivity. And even though this sounds subjective, job performance reviews can also be quite objective several formulas cans seen through sales reports, etc.
2. Ramp-up time
Refers to the specific period or amount of time it takes an employee to reach full productivity in the role they have been assigned.
3. Employee Lifetime Value
Used to refer to the net value of quality the new hire brings into the organization. Meaning an employee’s productivity is measured and calculated through their time with the organization, from day 1 all the way to their final day.
4. Cultural fit
Refers to how well the employee is performing in the environment of the organization and is measured through 360 ratings by their colleagues and supervisors.
5. Productivity
Much like job performance, productivity can be both subjective and objective. It is measured via a percentage of new hires that achieve full productivity in the desired time frame set by the organization and can consist of evaluating the percentage of goals achieved.
How to Improve Quality of Hire
Quality of hire is an important tool used to measure productivity and to increase efficiency within the organization and help to improve the hiring process. Now that we’ve covered the basics of what quality of hire is, we will now go over some simple tips to improve the quality of the hiring process.
1. Measuring the current Quality of hire
While this may sound rather obvious, it is important to state that one must know where they are starting from before moving forward. Hence, when seeking to improve the current quality of hire, one must know where they stand by measuring their current one and then planning accordingly. Once the initial data has been collected, organizations can seek to improve their quality of hire by setting time-based goals to improve the quality of hire following whatever information they received from the collected data.
2. Collecting the right data
After estimating the current quality of hire, the second step towards improving an organization’s quality of hire would be to make sure the right data is collected. And to do so, both pre-hire and post-hire data must be taken into account.
Where pre-hire data mostly includes subjective data such as scores in assessments and job interviews and post-hire data refers to more objective data such as reports from managers and supervisors as well as subjective data such as time worked, promotions, sales, etc.
3. Streamline workload for Hiring Managers
2/3rds of recruiters claim that their work has become more burdensome due to the large pool of candidates and increased stakeholders and hiring managers claim that it takes them 30% longer to review candidates to make a selection.
This work can be streamlined through either automized systems such as intelligent automation or by simpler methods that include proper coordination with hiring managers regarding the demands of certain positions and their workloads.
4. Collaborate with Hiring Managers
61% of hiring managers claim that recruiters have ‘’low’’ or ‘’moderate’’ knowledge of the position they are recruiting for. While research claims that an average resume spends 37% of its time under review by a hiring manager. Leaving loads of room for improvement regarding the hiring process, which can be achieved through coordination with the hiring managers making hiring goals clear from the start. This can be achieved through more precise interview processes, collecting input and doing follow-ups for future hiring plans, and even something as simple as setting down a proper definition of what constitutes a good quality of hire for the organization.
5. Providing Accurate Overview of the Job
As simple as this may sound, one of the best ways to improve the quality of hire is to make sure that the vacancy description put up is clear and accurate regarding the demands of the position and the organization, making sure that the least amount of unqualified candidates apply.
6. Analyzing Culture Fit
Even if the hiring process is extremely thorough and detailed, there remains room for error regarding what the employee will contribute to the growth and productivity of the organization. This is because, despite having all the requirements and passing the screening process, the employee is simply not the right cultural fit for the organization. Hence, to make sure that the screening process is as thorough as possible, trial periods, informal meetups, icebreakers, etc can be organized to make sure the employee is a good organizational fit.
7. Involving Employees
To avoid problems such as cultural fit issues and the inability to adjust to the work environment as well as the problems of the initial hiring phase, it is vital to keep pre-existing employees an important part of the hiring process. They make up the current organizational team and will be able to recognize who is a good fit and who isn’t. They also went through and qualified the organization’s hiring process and can therefore be very useful in improving the process through their experience.
8.Improving the Onboarding Process
Research shows that the first 90 days of employment are crucial in building rapport with the organization, brand, colleagues, and managers, shedding light on the importance of the onboarding process. A hostile or sloppy onboarding process will not allow the employee to settle in and gain control over their work and surrounding, and they are more likely to leave the job because of that. 69% of employees are more likely to say for three years or more if the onboarding process is smooth and welcoming.
9. Make Objective Hiring Decisions
Objective hiring decisions are a foolproof way of improving the quality of hire since they integrate both indicators and the quality of the mathematical metrics of hire is based on. Objective hiring decisions can be made through the use of pre-employment assessments and structured interviews that target to pinpoint the exact qualities that the organization is looking for in its employees.
10. The Use of Artificial Intelligence:
While all these methods are great options in improving the quality of hire, the best and perhaps most error-free method remains to be the integration of technology, or particularly, AI. AI matches employee’s strengths, abilities, and experiences to those that a particular organization requires, making it perhaps one of the most efficient means of improving the quality of hire. This can be done in three simple ways:
- 1. Using AI in the Initial Screening Process:
By integrating AI in the initial resume screening process, the organization can ensure the automatic shortlisting and selection of the best-suited candidate through means of testing and matching, skills, abilities, education level, etc. - 2. AI in assessments:
By using AI for pre-employment assessments, the organization is ensuring the most analytical and tailored process of gauging a candidate’s abilities and skills. - 3. AI in Interviews:
AI can help detect patterns of speech and behaviour as well as help generate a structured interview in ways the traditional human process cannot, making it a more reliable option.
The Benefits of Using Quality of Hire
Quality of hire and its improvements benefit both the employee and the organization. For the organization, it finds the right fit and saves time and money that would otherwise have been lost during a sloppy hire process or the initial settling-in process. As hiring improves, so does employee engagement, meaning they carry out their tasks with diligence and motivation, leading to high productivity levels. By improving the quality of hire, the organization isn’t only hiring a well-suited individual but is constructing a team, one that is highly functional and efficient due to the hiring process.
Moreover, from an employee perspective, quality of hire ensures that the employee finds a job that is suited to not only their skills but also through a proper screening process allows them a high functioning work environment as well. They also have job satisfaction which goes hand in hand with productivity levels.
However, keeping the benefits and technical know-how of quality of hire, it is also important to note that because of its thorough and technical nature, it is not a process that can be carried out overnight. Rather, it needs to be integrated into the working life of the organization to ensure an efficient hiring process.
