88% of organisations believe Quality of Hire will be the most significant measure of recruiting success over the next 5 years. Quality of hire has been a concern for some time, but the COVID-19 pandemic made it much more prevalent. Business leaders are well aware of how important having the right people is to the success of their businesses.
Metrics traditionally used by recruiting teams, like time to hire, are still vital to identifying areas for efficiency improvements, but they’re just not enough. You must be tracking the direct business outcome of your efforts by measuring a more strategic metric such as quality of hire.
So what is Quality of Hire?
Quality of Hire (QOH) is the measurement of the value that a new hire brings to a company, and how they contribute to a company's overall performance through their own work in a defined period of time (short term, medium term or long term).
QOH has notoriously been a difficult metric to measure and track, due in part to technological gaps in ATS’s and HRIS systems, but also due to the subjectivity of performance evaluation. However, with new innovations from companies like Screenloop, this is becoming easier to track and become more objective.
Quality of Hire can also vary depending on the employee lifecycle. For the purpose of this evaluation, we will focus on new hire performance within their first 180 days of employment.
How to Calculate Quality of Hire
New Hire Quality of Hire (first 180 days)
The most common inputs that companies use are:
- New hire performance (i.e did they hit their full productivity within the period of time such as sales quota achieved)
- Tenure (i.e did they pass their probationary period / are they still currently employed)
- Cultural fit (how have they contributed to the wider business)
Other inputs can include:
The rating scale is very important, as it becomes trackable and allows you to measure over any period of time. Typically businesses use a scale of 1-10 or 1-5.
So let's take an example from the most common inputs that companies use.
Claire, an Account Executive, hit 80% of her quota, in her first 180 days (new hire performance). She passed her probationary period after her manager reviewed (tenure). However, as she is working remotely, she has not been contributing much to the culture of the business, and she received some negative feedback in her peer review (cultural fit).
With a simple scoring of 0 - 10 (0 the worst to 10 the best), you can associate some scoring to Claire’s Quality of Hire score.
80% of quota = 8/10
Passed probation = 10/10
Culture fit = 3/10
Input 1 + Input 2 + Input 3
8+10+3/3 = 7/10 Quality of Hire Score
One consideration with the Quality of Hire score calculated in this way, is it can be quite subjective, and more lenient managers may score new employees differently to stricter employees. Technology can help remove some of this bias, and bring a more objective view to performance.
One such way and simple starting point, is through the Net Quality Hiring Score.
Total # of promoters - Total # of detractors
Total # of responses
Download '5 Steps to Achieving Quality of Hire'
Quality hires are imperative for business success and survival. It takes months to find the right candidate, and hiring the wrong person can lead to disastrous consequences. This resource breaks down the process of achieving quality of hire in 5 simple steps.