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Here's How You Can Determine The Quality Of Hire

The quality of hire, though recognized as an important metric in recent times by HR professionals, continues to be one of the most difficult metrics to measure.

Google it, and you find scores of methods, tried and tested by experts, a plethora of formulae to calculate the quality of hire in the pre-hiring and post-hiring stage, scaling it across teams, and how it has impacted business outcomes in the long run.

Quality of Hire

There Is No ‘One-Size-Fits-All’ Metric To Measure The Quality Of Hire!

The term may mean different things for different organizations, based on the nature of their business, number of employees, future goals and expected returns. It may be any of, or a combination of factors like employee performance, turnover rates, employee engagement and cultural fit.

It is precisely for this reason and the fact that the whole exercise is time-consuming (it might take up to a year) that most organizations do not undertake this exercise.

However, research has shown that determining the quality of hire in a systematic way can have far-reaching benefits for the organization, in terms of reduced costs of hiring, employee engagement and productivity.

Why Is Determining The Quality Of Hire So Crucial?

If it is really so difficult, is it worth going through the effort? Turns out, it does have a lot of benefits!

1. Determine The Efficacy Of Your Hiring Process!

If you’re not hiring the best of the available talent, you’re not raising the quality of your workforce! Measuring quality of hire by position will tell you how well you’re doing from an end-to-end standpoint.

2. Track Each Step Of The Sourcing And Recruiting Process!

Breaking down the process of hiring, to determine the quality of hire helps identify what’s working for you - and what isn’t! For instance, tracking the candidate quality, right at the time of sourcing, can help calculate the ROI by sourcing channels.

3. Measure Your Assessment Accuracy!

By comparing the pre-hire and post-hire quality (described below) of hire, you can determine the predictive value of your assessment process.

4. Determine If You Are Hiring Good People For The Wrong Job!

A lot of people are unable to perform to their potential, because they are doing work they don’t like, don’t fit the company culture, or possibly don’t get along with their colleagues or managers. Quality of hire needs to take these differences into account as well.

Determining the quality of hire means understanding not only what type of candidates are suitable for your organization, but also getting the best out of them and ensuring longevity in your organization.

If you know the qualities of candidates required by your organization, you develop a foolproof method which helps you hire the right fit, every time!

Here’s The Process Of Determining The Quality Of Hire!

Quality of hire can be measured in 2 stages of the recruitment process, that is the pre-hire stage and the post-hire stage.

Measuring Pre-Hire Quality

It is important to measure the quality of pre-hire quality along with post-hire, as per talent leader and author Lou Adler. It allows recruiting leaders to predict the quality of hire for any recruiting campaign 30-60 days before the people are actually hired. It helps you make sure that the people you are hiring continue to be your best performers long after you've hired them.

Here are some ways you could get a rough idea about the candidates you're hiring before/during the selection process

  • References from employees/recruitment sites: The best ones usually carry good recommendations!
  • Time taken to hire: The good ones get to choose from the best offers! The longer the conversion time, the better the candidate, in all probability.
  • Performance in aptitude/assessment tests: Their scores could tell you whether their skills are suitable for your organization.
  • They have offers from other organizations as well as yours: The best ones are always in demand!

Measuring Post-Hire Quality

This can be quite a challenge, as there are many factors that influence new joinees after the hiring process is completed. Many of these factors may be out of the purview of the hiring team and hence, cannot guarantee post-hire quality.

Using the best recruitment practices may assure you of bringing in the best talent in the industry, however, it is no guarantee that the talent you bring in will be an excellent performer or even that he will stay long enough in your company to actually make a difference!

It may be that a great candidate has a not-so-good boss or that a team could not fully optimize high performers. Great talent is always in demand, so you may lose your star hire to one of your competing firms!

External factors like these cannot be controlled and hence, are not a reflection on the recruiting teams.

Typically, in any organization, new hires are evaluated on

  • Time taken for an employee to become productive: How soon a new hire attains productivity levels is a good indicator of the quality of hire.
  • Increase in sales and revenue: How much a new hire is able to contribute to boosting sales and revenue is a definite and measurable attribute.
  • Performance reviews by hiring managers: A standard in most companies, hiring managers are best equipped to rate their juniors on various parameters.
  • Employee engagement: Is the new hire engaged with the company? Is he making the most of his time and skills to contribute maximum to the organization? This is another fool-proof measure of the quality of hire.
  • Cultural fit: A seemingly talented candidate with all the right qualifications will be able to give his best to the organization only if his vision and goals align with those of the organization. A 360-degree feedback by team members, superiors and colleagues will give a clear picture of his cultural fit.
  • Retention: How long the company is able to retain the new hire, making up for the cost of recruitment and also generate returns on the investment.

Analyzing The Data Collected…

Getting and analyzing data on the pre and post-hire consideration is the easy part!

To determine the quality of hire, it is important to link the results to business outcomes to arrive at a decisive conclusion. There are two deciding factors to measure business objectives, namely, reduced costs and increased revenue.

Reduced Costs

Has improved quality of hire reduced costs for the company? This may be due to faster and more effective recruitment processes, reduced employee turnover and higher productivity in the shortest time possible.

Increased Revenues

Have the new hires contributed directly or indirectly towards increased revenues, increase in sales, reduced vacant positions?

This understanding could give you a realistic calculation of the quality of your hires and returns to the organization vis-a-vis costs incurred.

Each business has its own perception of performance, value, and productivity. However, the above-mentioned factors like job performance, ramp-up time to reach optimum productivity levels, employee engagement and cultural fit with the organization could be outlines to measure the quality of hire almost universally.

Talent acquisition teams should fine-tune their hiring processes to reflect their organization’s strategic goals to ensure hiring the right candidate, for the right job!

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