How to Measure Quality Hire versus Quantity

Measuring Quality of Hire Vs. Quantity

It is safe to say the age old saying “quality over quantity” holds true, across the board. This might seem intuitive but is it really? At the end of the day, there are a lot of organizations not asking themselves this very question, “What is our process for measuring quality of hires?” Most recruiters and staffing organizations are labeled “successful” if they fill jobs quickly, at a low cost, process high numbers of candidates, and are easy to work with. Seldom are recruiters and staffing organizations measured by turnover or performance levels of those hired. For example, would your organization think a recruiter was excellent if he/she was able to hire 1000 people in a month (more than anyone had ever hired before)? Well how would that recruiter be perceived if 990 of those hired didn’t work out on the job for even 60 days? Organizations must begin to evaluate the quality of their hires versus focusing on quantity and cost containment.

The Society for Human Resources Management (SHRM) has stated the following fast fact: “On average, companies that did a better job of attracting, developing and retaining highly talented managers earned 22% higher return to shareholders.”

There are many ways to define quality of hire, and many organizations even vary in their definition by department or job title. But essentially, what is important to any organization is that the recruiting process consistently delivers productive employees who produce good results, are engaged in their jobs, and want to grow and learn more.

We have found the process of measuring the quality of hires expands the dialogue between recruiters and line managers beyond efficiency numbers to a conversation around the quality of talent and the organizational impact this talent will have.

The following blog will discuss what factors to consider when measuring quality of hire, as well as when to measure and how.

How to Measure Quality of Hire?

Individual Performance Metrics of New Hires

1. Productivity, output, sales, customer satisfaction levels

2. Number of weeks to achieve acceptable performance

3. Error rates

4. Performance appraisal ratings

5. Number of months to achieving first promotion

6. Number of awards/certifications

7. Performance in training programs/assessments

Retention Rates – Turnover is a high cost for all companies and is impacted by so many variables. Manager Satisfactions – Survey hiring managers from year to year asking:

Quality of hire perceptions
Quality of the competencies and skills acquired

Candidate Satisfaction– Survey candidates from year to year and ask:

Perception of the recruiting/selection process
Perception of how candidates were treated
Overall company image

When Should We Measure?

Immediate/Intermediate Measures (up to six months post hire)

1. Output, production compared to recent hires

2. Output, production (on average) compared to last year’s hires after their first six months

3. Managers’ perceptions of performance of the new hire after their first and sixth month

4. Managers’ perceptions of performance (on average) of new hires at six months versus performance of new hires last year after six months

5. Time to productivity (on average) versus new hires last year

6. Performance of new hires (on average) in training programs, certifications, assessments versus new hires last year in their first six months.

Longer-Term Measures (beyond 6 months)

1. Managers’ perceptions of performance at the one month, six month, and annual intervals

2. Managers’ perceptions of performance at the one month, six month and annual intervals (on average), versus the same intervals for new hires last year

3. Year-end survey of all managers on their satisfaction with the recruiting/selection process—year to year

4. The percentage of above-average performers who are still with the company (not including involuntary terminations) after one year, versus the percentage of above-average performers who voluntarily left the organization last year

5. The percentage of new hires (last 12 months) who are still with the company (not including involuntary terminations) after one year, versus the percentage who left voluntarily last year

6. The cost differential of voluntary turnover this year versus last year

Summary

What’s measured gets paid attention to. The importance of collecting data about an organization’s most important asset–its human capital–will only continue to increase. Learning how to measure the quality of hire allows staffing managers to communicate the quality of their hires as well as the efficiencies of the recruiting processes. Like all human capital measures, quality of hire should not stand alone. Rather, HR professionals should use this metric in conjunction with other measures to provide a balanced assessment of their organizations’ human capital.