20 Metrics in 20 Days- Day 3: Quality of Hire

Day 3 in our series of 20 consecutive posts on HR metrics: Quality of Hire

Definition

Quality of Hire is the percentage of hires meeting an established standard of performance.

Quality of hire metrics typically focus on performance in the first year.

Formula

As with many of our other measures, we multiply by 100% to convert the proportion to a percentage.

Defining “Quality”

The specific measure will vary across organizations but organizations typically use one of the following:

• Meeting an estabished performance measure standard (e.g. 3 or higher on a 5-point performance rating scale)
• Manager ratings/ manager satisfaction

Clearly these are related so it is often just a question of where the data for the metric are coming from.

If your organization does not have an established for performance rating system, then you may wish to consider a short questionnaire to get your quality of hire data point.

This can be as simple as a single email asking your manager to rate the performance of the new hire on scale of 1 to 10 although, again, a more systematic performance ratings practice is hopefully already in play.

In addition, hires that depart within the first year are typically counted as poor quality hires by default.

Additional Considerations

As we noted above, hires that depart within the first year are typically counted as poor quality hires by default and should be counted as part of your overall quality of hire metric.

However, it is also important to independently track first-year retention to tease out the difference between those people who performed poortly v. those who left quickly.

You may also wish create a separate quality of hire metric for those who stayed for the first year.

Depending on what you find, it might be worth exploring the performance of those who left early. For example, are you hiring good people who become quickly dissatisfied with the job and the company or are you just hiring duds who tend leave or simply stop showing up to work?

Why You Should Care

As noted previously, the recruiting and interview process is time consuming and costly. If new hires are frequently failing either because of either low performance or poor role fit, it signals an important disconnect between needs of the organization and the methods in place to address those needs. Note too that this may involve the onboarding process as well, not just recruiting.

Actions

The following are some suggestions for addressing quality of hire issues and maintaining high quality of hire performance.

1. Honest exit interviews which address the following:
   • Why are you leaving?
   • What specific parts of the job are you dissatisfied with?
   • What would you change to make the experience better for the next person?
   • Did the job match what was said during the interview process?
2. Collect metrics during the interview process
   • Individual ratings by each of the interviewers using a consistent set of questions
   • Basic questions on the background of the hire such as years of experience in the industry and changing v. continuing career path.
3. Post-departure retrospective
   • Gather basic metrics about departing recent hires and visualize them (provided it makes sense for your data). Does anything leap out?
   • Gather managers and interviewers to discuss the departures to determine if there are holes in your hiring or on-boarding process
   • Discuss departures with colleagues and managers to identify areas for improvement and capture suggestions for improved communication, onboarding, and early experience.

Final Thoughts

All that said, I recognize that talent acquisition processes are sensitive. Many organizations are hesitant to share or gather honest feedback about processes because of defensiveness, internal politics, or legal concerns. You will need to use your best judgement as you develop and discuss ways for improving quality of hire outcomes. But remember that you cannot improve results without honest input, an honest evaluation of your processes to date, and asking how they can be improved.