Recruitment Metrics: Quality of Hire Explained

Volodymyr Bilyk
17 March 2021

One of the primary requirements of a cost-effective recruitment operation and effective hiring process is having thoroughly established metrics. 

But it is not enough just to count cost per hire, time to fill, or time to hire to understand whether you’re doing it right. At the end of the day, the quality of hire justifies the monetary and time investments.

That’s what we are going to talk about today – the quality of hire recruitment metrics and how it provides additional insight into your company’s organizational efficiency.

What is the Quality of Hire Recruitment Metric?

What is the Quality of Hire Recruitment Metric?

The business operation’s driving force is a sum of generated value and its impact on the long-term and short-term proceedings. 

  • This concept goes through everything – it covers workflows, pipelines, goals, strategies, requirements, and so on. 

Human resources and the recruitment operation look at things from the other way around. 

  • They relate to the impact of a person in a particular role on a specific workflow. That’s what the quality of hire metric is in a nutshell. 
  • According to LinkedIn Global Recruiting Trends Report, quality of hire is one of the most frequently used recruitment metrics.

Overall, the definition looks like this: 

  • Quality of hire is a recruitment metric that studies the value the hire generates. It applies multiple dimensions to measure the impact of the employee compared with other factors.
  • Those factors mainly express themselves through other recruitment metrics like cost per hire, time to fill our time to hire, and the likes. 

The quality of hire metrics implements an informal comparative scale of employees’ expertise level compared to their on-site performance. 

  • Quality of hire recontextualizes general employee performance metrics – such as productivity, engagement, quality. 
  • Furthermore, it considers more abstract factors related to company culture – employee fit and employee satisfaction.

Why Bother Measuring The Quality of Hire Metric?

Why Bother Measuring The Quality of Hire Metric?

Here’s the thing, despite being called “quality of hire,” in reality, this metric doesn’t really track the “quality” per se. 

  • It indicates impact (positive, neutral, or negative) on the proceedings. Subsequently, this data contributes to decision-making regarding workflow optimization, hiring, or other aspects.

The quality of hire metric showcases the efficiency and consistency of HR and recruiters. It is an indicator that reflects the effectiveness of the following processes:

  • Defining the requirements for the position;
  • Identifying the fitting candidates;
  • Communicating the right expectations for them;
  • Providing an efficient onboarding;
  • Enabling the new hire to immerse into the collective and express their best;

In one way or another, the quality of hire metric applies to a specific context of such things as: 

  • A particular workflow (for example, within an effective hiring process);
  • During a time period (like probation, Q1, Q2, and so on);
  • In general (as part of the so-called “lifetime quality of hire” employee performance metric); 
  • For a project (for example, consulting for a salary survey). 

For the most part, it is a measuring stick for defining the success of new hires – a way to understand whether the hiring decision pays off. 

In retrospect, quality of hire metrics expands into job performance and employee engagement metrics. Together, they showcase a comprehensive picture of employee’s impact on the company.

How to Measure Quality of Hire?

How to Measure Quality of Hire?

Because of its abstract nature, measuring the quality of hire is a challenge in itself. It is not because of the overwhelming number crunching but because the quality of hire metric is a matter of interpretation in a specific operation. 

The thing is – the quality of hire indicators depends on the requirements of the business operation. As such, there are a lot of adjustments going on.  

Let’s look at the typical quality of hire metrics indicators.

Employee turnover \ Employee Retention

Employee turnover is the most accessible metric to track. The turnover metrics showcase the stats regarding employees quitting, failing probation period, or getting fired for different reasons. 

  • This metric includes multiple factors regarding performance, culture fit, and HR efficiency. 
  • Time-wise, the most critical periods are probation (up to 2-3 months, a two-week period is also often considered one of the benchmarks).

In contrast, employee retention can be perplexing as it is not a separate entity but a sum of different factors related to job performance, culture fit, and employee engagement.

  • As such, employee retention metrics showcase the recruitment team’s efficiency to find fitting candidates and the HR department’s ability to provide an effective onboarding process.
  • It is worth noting that employee retention also indicates employer branding’s effectiveness and employee value proposition.

Job performance

Job performance is the most obvious quality of hire indicator. However, in the context of quality of hire metrics – it is a bit matter of fact. 

There are several ways of tracking employee performance. 

  • Quantifiable metrics with Key Performance Indicators (aka KPI). This aspect needs clearly defined requirements to be practical. 
    • For example, how many candidates can a recruiter process and effectively move forward through the recruiting pipeline? 
  • Comparative metrics (with other employees in similar positions, related historical data, or time period). 
    • For example, how well this particular junior copywriter performs
  • Qualitative metrics regarding the quality of work overall. It is a subjective relative of KPI, but these metrics’ concern is whether the employee’s work accomplishes set goals. 
    • For example, content provides a showcase for the company’s expertise via detail-filled case studies (like this one). 
  • Then there are certain elements that are perceptive – stuff regarding soft skills, workplace emotional intelligence, and company culture fit. These aspects are subjects of case-by-case evaluation based on observation and interviews. It is an intricate process worth an article of its own. 

Employee promotion\Career Development Dynamics

Employee promotion and career development dynamics are tricky as a lot of it depends on the context. 

In the case of promotion, it is a matter of context:

  • What if the promotion happened because of the turnover of other employees and not natural progression?
  • What if the promotion is a sign of goodwill and not an accurate indication of professional growth?

Essentially, the employee promotion metric answers the question, “How long does it take for a specialist to get a promotion?”. 

  • If you have a set of critical requirements combined with clearly-defined KPI figures – you can put it into the system. Otherwise, this metric is highly dependent on the other metrics.

Then there are Career Development Dynamics. This metric explores the effort the employee puts into becoming a better or more diverse professional. 

  • Some companies integrate it into their Personal Development Plan and implement it into the workflow.

Employee Engagement

Employee engagement metric is complicated because it is a lot of things at once. It concerns with:

  • Job performance (which got its own metric);
  • Company culture + culture fit (which metrics of its own);
  • Remuneration\compensation satisfaction
  • Supplementary workflow analytics and more. 

In other words, it is several factors that combine into a mood board of contributive factors that reflect the engagement level of a specific employee. 

As a separate metric, it is a kind of temperature check for the HR department.

  • On the one hand, it is keeping an eye on employees and ensuring that everyone is happy and on the same page.
  • On the other hand, it is continuous research into employee motivation and recognition.

In conclusion 

Implementing quality of hire metrics is an important step in building thorough recruitment and HR analytics. 

If you need help developing and implementing quality of hire metrics in your company – our HR consultants can help you.

When the quality of hire analytics are up and running – your company will have a deeper insight into: 

  • What is happening with the employees? 
  • Which factors drive them to perform well? 
  • What makes them quit? 
  • Whether the onboarding process is good enough and many more. 

Next time, we will talk about employee engagement and how to make it right.

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