The Most Effective Model to Assess Quality of Hire

March 19, 2017

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In 2015, 39% of companies said Quality of Hire (QoH) was their most valuable recruiting performance metric. It’s what makes spending so much time and effort in the recruitment process worth it in the end. It’s the reason that cutting corners and saving money isn’t a good idea when it comes to recruiting. Quality of Hire is one of the most important and, unfortunately, one of the most difficult hiring metrics to track.

To begin calculating Quality of Hire, several metrics have to be measured and analyzed over several months. That’s why many companies don’t give QoH its proper due—it takes too long to evaluate. However, out of 20,000 new hires made in 2012, 46% failed within 18 months. This is a clear sign that Quality of Hire is not being analyzed and the results are not being used to improve the recruiting process.

CC-Click-ToTweetBird-01.png 39% of companies said Quality of Hire (QoH) was their most valuable performance metric.

Those who do measure QoH generally base it on one or a mixture of the following metrics:

  • Employee engagement
  • Cost per hire
  • Turnover rates
  • Time to hire
  • Job performance

In fact, pre-hire metrics (time to hire, cost per hire) don’t actually give you insight into QoH. You can focus on the talent acquisition process since that’s what you want to improve in the end, but that won’t measure staff performance. Instead, an ideal and accurate QoH rating would be based on the following:

  • Pre-hire assessments. How good of a fit does the candidate appear to be?
  • Post-hire performance. Where has a new hire added value to the company?
  • Hiring manager satisfaction. Are hiring managers impressed with the hiring process and the talent coming in?
  • Candidate satisfaction. How happy is the new hire in their position?
  • New hire turnover (and retention) rates. Is the talent you’re hiring generally a good fit for your company culture?

All of the above measure performance and cultural fit, both of which are vital to improving your recruitment process. Reducing time to hire and cost per hire is important for your budget, but they don’t affect your company nearly as much as the people you recruit. Though you could (and should) put all of the above metrics into the Quality of Hire formula, here are the 3 most vital pieces to calculate your score:

(Post-Hire Performance + Candidate Satisfaction + Retention) / 3

Once you’ve figured the above metrics into percentages (i.e. 87% performance rate, 93% productivity rate, 72% retention rate), you simply add them up and divide by 3. In this example, that gives you an 84% Quality of Hire rate. But is that good or bad?

Because Quality of Hire metrics vary from business to business, it’s hard to say what the average QoH rate looks like. You might wonder if you’re doing better or worse than your competitors, however, instead of comparing your numbers to theirs, focus on improving your own numbers from year to year. You may want to work with executives and HR leaders to develop standards within your company. That way, even if you can’t get industry comparisons, you still have numbers to compare and improve upon.

CC-Click-ToTweetBird-01.pngHow should you effectively assess Quality of Hire? Take these quick tips:

Most importantly, Quality of Hire and other post-hire assessments should be informing changes to your pre-hire practices. Is the way you measure QoH giving you the information you need to improve your hiring process and your organization? If not, then it’s probably time to make a change.

All of these recruiting metrics can be hard to track on your own. That’s why 75% of hiring and talent managers use either applicant tracking or recruiting software to keep tabs on and help analyze their hiring process. An applicant tracking system like ClearCompany’s, makes measuring Quality of Hire simple and effective.

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Sylvie Woolf
Sylvie Woolf
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As Director of Client Service, Sylvie actively works to scale and grow our business, while driving value and customer success at every level. Sylvie directs our department's remarkable team of specialists who consult with and support ClearCompany’s diverse clientele, delivering best-in-class client service. Sylvie serves as a strategic partner to executives within our client base, ensuring that our platform not only assists with administrative concerns, but also solves for large-scale business needs.

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