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quality of hire

How to Measure and Improve Quality of Hire

in General

How to Measure and Improve Quality of Hire

 

What is the number one goal of any employer, hiring manager or company offering human resources services? Hiring the right candidate for a job. Recruitment is a significant responsibility that involves more than getting a qualified person into an open position. Hiring the right candidate means getting the person who will perform at the highest level, deliver solid results and continue to be a valuable asset for your company in the long run.

Fundamentally, we all want to know if our hiring practices are actually bringing in the best candidates. But can an organisation measure the “quality of hire” and accurately evaluate all candidates?

This article aims to help organisations define their quality of hire and identify the factors necessary for measuring this metric and improving it for HR success.

What exactly is the quality of hire?

“Quality of hire” is defined as the value a new hire adds to your company or used as a metric for the overall success of the recruiting function. This definition offers a starting point, but a company should define its own unique value for quality of hire.

As opposed to other recruiting KPIs like cost per hire and time to fill, quality of hire is seen as the best indicator of a human resources department’s strategic value to an organisation. It is a more holistic measure of the effectiveness of the recruitment process and factors in the calibre and performance of newly hired employees.

HR teams must have a well-developed strategy for hiring and retention. This will allow them to monitor the performance of their new hires, analyse those with poor performance and use that information to improve the quality of their hiring decisions continually.

It would be ideal for an HR department or company providing human resources services to demonstrate its strategic and financial value to an organisation. HR specialists can do this by breaking down the quality of hire metric, identifying which additional metrics contribute to hiring quality and strategising methods to optimise their performance.

How to measure the quality of hire

It is not surprising that a LinkedIn report on recruitment refers to the quality of hire as the “holy grail” metric to measure their team’s performance. HR teams worldwide recognise the significance of this metric, but there is not yet a universally accepted way to evaluate new hire quality.

Even though 88% of businesses rated this metric as “very useful” if they could collect it, only 48% of companies are using it. Companies are looking for effective ways to define and measure the quality of hire so they can get actionable insights and drive strategic business decisions.

Keeping this in mind, the following are a few of the most reliable methods for measuring the quality of hire. We suggest combining several of these strategies if you want the most reliable results.

Track other key metrics

There is no “one size fits all” metric regarding hiring quality because it depends on what an organisation values most. According to LinkedIn’s research, these are the top three indicators of a hire’s quality:

  • Retention: How long do new employees stay with the company (e.g., measured as a rate of new hires staying vs new hires leaving 90 days post-hire or within the first year of employment)
  • Time to fill: The length of time it takes to fill an open position (e.g., measured by the number of days taken)
  • Job performance: Evaluated by supervisors or through objective information like the number of sales

These metrics are an effective way to develop not only more accurate but also more objective candidate evaluations. We can also identify other significant metrics, such as:

  • Hiring satisfaction: How content hiring managers are with the candidates they’ve interviewed (e.g., measured by how satisfied they are with the new hire on a scale of 0-10)
  • Employee engagement: Based on the new hire’s own evaluations
  • Cultural fit: Based on a broader assessment of the new hire’s co-workers and supervisors

The goal of tracking and measuring these metrics is to focus on adding talented individuals who best fit the organisation’s culture and values, hiring candidates who can add long-term value and reducing turnover by retaining new hires.

HR needs to link their measurements for quality of hire with actual business outcomes to improve overall organisational performance and accountability. For example, cost savings from reduced turnover and an increase in efficiency and productivity are two business outcomes linked to the quality of hire metrics.

Seeing an increase in revenue from new hires is another business outcome that organisations can attribute to the quality of hire metrics. It is essential to communicate which business outcomes are impacted by the quality to accurately evaluate the success of HR departments of outsourced human resources services.

How to improve the quality of hire

For most organisations, the first step in improving their quality of hire is defining what it is in the first place. There must be a clear understanding of what a high-quality candidate looks like and how to measure their value to the company during the employee lifecycle.

Measure the right metrics

As discussed above, HR teams can more effectively evaluate and improve the quality of hire by considering the various factors affecting a company’s ability to employ and retain top talent. It is essential to measure only relevant metrics to maximise this key HR metric effectively.

Audit the hiring process

By auditing the hiring process, companies can ensure that their quality of hire measures are closely tied to business outcomes (e.g., are we looking to increase the number of hires that contribute to increased revenue for the business?).

Use outsourced human resources services

Companies of all sizes often outsource human resources tasks to companies with the expertise to do better, leaving their internal team to focus on higher-level functions that drive growth and revenue. A company that outsources specific human resources tasks or the entire process can access the industry’s best talent and resources to help maximise the hiring quality.

Implement human resources services

Implementing comprehensive human resources solutions opens up new opportunities for companies to maximise their quality of hire and the continuous success of the organisation by freeing them from time-consuming and costly HR processes so they can focus on core activities.

Recruitment, payroll and other core HR functions are streamlined while businesses benefit from enhanced workflows and services that best meet their needs. It is vital to partner with an experienced agency with a proven track record of high ROI human resources solutions and one that can provide the expertise needed to stay competitive and run an efficient human resources department.

If you want to learn more about human resources services in South Africa, MASA is the perfect partner for you. We will design a bespoke human resources solution to address your unique needs and seamlessly integrate into your business operations. Contact us today to discuss your needs and to learn how MASA can be your strategic partner in human resources management.

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