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How to Measure the Quality of Your Candidates

No hiring manager aims to make a bad hire, but the truth is that it can take a long time to determine if a hiring choice is a good one. One way to proactively approach any weaknesses in your hiring methods is to determine the quality of your candidates with a score or number. By tracking this number over time, you can make better hiring decisions in the future.

Here’s how to track and measure the quality of your existing and future candidates. 

What is “quality of hire?”

In the simplest terms, quality of hire (QoH) is a measurement of the value your hires add to your organization. “Quality” and “value” aren’t hard-defined terms, though, so what can HR teams do to quantify and track something that’s somewhat intangible? Measure it. Let’s look at how you can do that.

How to measure quality of hire

The quality of a candidate is more than just a concept. You can break it down into measurable quality of hire metrics such as their productivity, the way they interact with others, and how their actions contribute to larger key performance indicators (KPI), such as sales and overall company culture.

It can be tricky to measure such a wide scope of metrics, so it’s best to start with defining what you will measure and ensure that you consistently measure each in the exact same way each time. Consistency is the key to getting good data that you can use in refining your talent acquisition and recruiting processes. 

Pre-hire

Measuring QoH shouldn’t wait until the onboarding process. In fact, the best time to start tracking is in the candidate sourcing, interviewing, and hiring phases. You can start to assess the quality of a new hire even before you bring them on, and this knowledge will help you make better hires, as well as give you data and a greater benchmark to work with down the road.

Qualitative signs

While not as easily measured, qualitative signs are important and help you understand if a candidate will be a good hire. This may force you to use more of your own experience and “gut instinct.” Are you (or your recruiters) using the following questions to help pick the right hire?

  • Is the candidate receiving competing offers from other companies? Are they “in-demand?”
  • Do other top performers know who they are? Did they come highly recommended by those with proven track records?
  • Were they reluctant to take your first offer, or did they seem to carefully weigh all their options?
  • Do they typically get hired right away? Is there very little time between past jobs?
  • Are they award winners or known for their inclusion in studies or journals?

Quantitative signs

Answering “yes” to any of the above questions could be a sign of a high-quality candidate. Fortunately, there are also very tangible ways to assess a pre-hire that you can use when you’re not as experienced with hiring or if you’re worried about your own internal biases.

  • They score high on job assessments, aptitude tests, or sample work projects and demonstrate the exact skills and capabilities you will need for the position.
  • They came from a pool of “passive candidates.” This is more challenging to discover and engage with, but you can use the pool as a source of better-quality hires over time. If you do, what hire rates do you see in this group?
  • They were referred by high-quality performers. (Quality by association.)
  • They were quick to hire. A faster time to hire is a measurable indication that generally yields better results.

Post-hire

After the candidates come on board, you’ll have an even better opportunity to measure their value. Here are some key areas where this can happen.

1. New hire performance metrics 

Many companies use these metrics that you can obtain through an employee’s work-related tasks. They include sales goals, productivity, customer feedback rankings, and quality of work reports.

While you should give new hires some time to acclimate to a new job, it stands to reason that their performance metrics should improve right away and only get better the longer they’re on your team. Look for an upward trajectory that’s on par with other new hires in the same department or role. Any outliers could be a sign of a hiring or training issue.

Here are some ways to measure.

Ranking score

Have managers rank their new hires for comparison. Take note of the ones that rate highly. What do they have in common?

Average bonus % of an employee’s pay

Of those employees who get performance bonuses, who earns the most? This can be a clear sign of a good hire. 

Error rate

Your QA team should be tracking errors, specifically for new hires. If there’s no QA process associated with this role, be sure to have a formal process in place for tracking mistakes as they happen. 

2. Performance ratings and reviews

Unlike the above metrics, performance reviews can be highly subjective and can involve internal bias. It’s also a more difficult thing for new managers to get a handle on. Getting a consistent measure of quality of hire in this manner will be challenging. However, one thing you can do is look for patterns among the same team of managers or even add some strictly performance-related measurements to the mix.

3. Turnover and retention rate metrics

No one likes the idea of turnover, but it’s a natural part of the business. How long are your new hires lasting at the company? Are they staying for more than their first year? While this recruiting metric takes a long time to track, you should be able to easily spot any trends in groups of new hires and the longevity of their careers. Be sure to sort out employees that were let go for unrelated reasons (downsizing, for example) so their numbers don’t skew the results. 

4. Hiring manager satisfaction ratings

While the new employee’s department manager will have input into their performance review, they may also have input for the hiring manager. A hiring manager satisfaction survey gives these department managers a way to express how they feel about a new hire in a way that you can use to vet future hires. 

The questions on this survey should cover both the perceived competency and performance of each new hire. While this is a subjective survey, it can yield useful hire data. 

Building a formula to measure the overall quality of hire

Now that you have data, metrics, and ratings from both your new hires and existing employees, what do you do with it all? Assign each metric or input with a number on a scale of 1 to 100. From there, a simple Quality of Hire formula may look like this:

  • Quality of Hire % = (Ramp-up Time + Employee Engagement + Job Performance)/N

N would be 3, in this case, since you are using three factors to determine an overall score. If you wanted to add additional inputs, such as Cultural Fit, Promotability, or Customer Feedback, you would just need to make “N” include the number of new inputs, as well.

If you have a high turnover rate, you may want to subtract that percentage from the total to get a more accurate QoH. Here is an example:

  • Quality of Hire % = (89 (Ramp-up Time) + 92 Engagement + 87 Job Performance)/3

In this example, your quality of hire score is 89% before factoring in turnover. If you have a turnover rate of 22%, you will subtract that from your QoH percentage to get a new, more accurate QoH score of 67%. As you can see, a higher turnover rate can dramatically affect your QoH and may be a sign that you need to address that as a separate issue before expecting changes in your quality of hires. 

The importance of measuring the quality of hire

After doing all this work, you may be questioning the value of putting together a quality of hire formula and adding up all that data. Can it really bring about change to your organization?

The answer to that question depends on how you use the data. Even the best data has no value if it isn’t used appropriately. There are a few business principles that the QoH formula (and the process of using it) reinforces.

  1. Measuring the quality of hire is an ongoing process. It doesn’t happen only at the hiring stage, and you can use this metric for both long-time employees and new hires. In fact, the more historical data you have, the more accurate your reporting will be.
  2. It’s essential to identify the factors that bring your QoH scores down. Look for those that have the biggest effect on your numbers, then separate those out to find what you can easily remedy. It’s always best to go after the fixes that you can do right away since some of those quality of hire factors take years to measure and even longer to change.
  3. Many quality of hire issues are solved in the recruitment stage. It’s better to bring on good hires than retrain or rehire new ones. Watch how your numbers improve when you are more knowledgeable about what makes a good hire in the first place—and do something about it in your recruiting. 

Tips to improve quality of hire

There are many things you can do to increase the competency of your hires. Here are some of the most actionable tips to follow:

  1. Use assessment and standardized testing to reduce bias in hiring and create a level playing field for candidates. 
  2. Develop a talent pool of candidates who may not be actively looking for work but who have demonstrated competency and interest in your company.
  3. Create and use employee referral programs that help attract talent who are more likely to be a good cultural fit for your company.
  4. Utilize technology, when appropriate, to source and track applicants. An applicant tracking system (ATS) not only reduces redundancies but it also ensures a more consistent hiring process. This alone can keep the best applicants from falling through the cracks and makes your company look its best, so those in-demand applicants will pick you over competing businesses. 

If you’re interested in using an ATS to improve how you hire, get in touch! At Comeet, we’re here to help you create a seamless workflow for many of the most common hiring tasks and ensure you put your best foot forward when meeting with candidates. 

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Adrienne Smith

Adrienne Smith

Adrienne Smith is a content strategy consultant working with high-growth businesses on their brand messaging, content strategy, and content creation. A digital nomad, she's exploring the world's cultures and cuisines as she works.

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