Quality-of-hire – What is it, how do you track it, and why now?

You’ve heard of quality-of-hire, but you’re unlikely to be tracking, why? Because it’s not easy to do well.

Efficiency metrics, like time to fill/hire and cost of hire, have always been stalwarts of every talent acquisition team’s performance reports, but Quality-of-hire could be the one ??

Linkedin has been banging on about it since ‘16, Beamery wrote about it in 2017, and Workable helped us calculate it in this evergreen piece. According to a recent report by Tribepad shared by Hung Lee in this post, it’s already important to us recruiters. Check out the below, and you’ll see (we’ll discuss retention rate as a measure of QoH later)

Ultimately the quality-of-hire metric will allow your business to create amazing teams that want to stay and add value to your mission. Win, win, win, did I say WIN.

Making super fast, super cheap hires is no longer the primary objective of talent acquisition.?

There. I said it. So wtf is quality-of-hire, how do you track it, and why now??=

WTF is Quality-of-Hire?

Quality-of-hire, or QoH, is a measurement of the value a new hire contributed to your company.

Dumbing it down a second, if your shiny new hire turns up and doesn’t contribute, then what’s the point? QoH calculated accurately will allow you to quantify the success of your recruiting efforts. Forgetting the hire for a second, do we, as recruiters, add to the bottom line… ??

On top of using QoH, to get better business alignment you’ll also be able to identify weaknesses in your processes. Pop alongside cost of efforts and retention, you’ll start to make super smart business decisions about where to invest resources in talent acquisition and retention.?

Ok breathe. We agree lets start tracking QoH, now how.?

How to track QoH?

The good news is that there are many ways to track QoH ?? The bad news is you’ll need to track it accurately. You’ll need to cash in a few chips with HR and HMS ??

These guys are pivotal to getting an accurate metric. Their contribution to tracking at each stage is essential. This creates a little friction in deploying QoH, but don’t let this deter you. Every party will benefit.?

Remember, a quota-hitting Sales Rep that hits quota quickly but doesn’t embody your values is not a good hire. The same goes for an engineer that's a great fit, and the HM was super happy with everything during the hiring process, but when they turned up didn’t quite get to grips with deployable code.

This is why it’s super important to track metrics across your new hires’ life cycle post-hire. I’ve tried and tested many different ways to calculate QoH accurately. Take it from me, it’s complex. Every time I thought I had it, I didn’t. Someone comes along and punches a hole right through it.

My fave formula goes like this:

QoH= (Employee performance + hiring manager satisfaction + new hire fit)/3

By calculating the averages of each stage here, you can start to measure ‘quality’ effectively.

*NB – I don’t like the retention rate in here because we’ll need to wait a year to see any effects.

Let’s break each down further …..

Employee performance

Performance is heavily nuanced, but get the right mix, and you’re onto a winner. Some great metrics to track include:??

• Job Performance
• Employee Engagement?
• Time to Productivity, also known as ramp time
• Hitting Quota

Hiring manager satisfaction

This is a critical in QoH and will highlight those niggling kinks in your process. Use an HM satisfaction survey to garner valuable information like:

• Hiring processes satisfaction
• Candidate quality
• Recruiter success
• Quality of communication
• Manager to role organisation fit

New hire fit

The ‘right’ person is more than just about performance. Ensuring your new hire is displaying your company values is also essential, consider:

• Understanding of their role
• Dedication to company values
• Engagement with position, co-workers, and the organisation as a whole
• Compatibility with the company culture

Additional thoughts

Retention Rate – as a % of the entire organisation will give you an indication if your efforts are working over time.

Employee Experience – like RR and HM Satisfaction, can help you gauge the new hires’ position, giving you the ability to predict likely changes over time. You could even add it to the formula.

QoH= (Employee performance + hiring manager satisfaction + new hire fit + Employee Experience)/4

Why now?

Good question ?? I believe talent acquisition is finally getting its seat at the table. Are we in a new age? No, but the revolution has begun. TA is becoming an important strategic cog in the wheels of business, possibly the grease that allows it to go faster. TA and recruiting as a whole need to grow out of being considered a cost reduction centre.

The great resignation has highlighted why companies need to focus on the acquisition and retention of people. That is not going to change. I’m not sure it’s even a new thing. After all, to quote Jims Collins, Professor of Growth and Sustainability at Harvard:

“A company's growth is limited by its ability to attract and retain the right people.”

We still have a long way from being ‘made’. For now, QoH could be the metric that helps us get noticed by the higher-ups. We all know that the more those ears hear “that was talent acquisition”, the greater the budget and opportunity will present.?

Remember, by introducing QoH as a metric for your business, you will instantly start to be judged by the metric itself. Like Skynet in Terminator, don’t let it take over the world to protect us… Harness its power.

I’ll leave that one there for the movie buffs.

I’d love to get your thoughts on this. Did I miss anything? How are you tracking QoH? Please share in the comments or DM me.