Why Quality of Hire is So Important for HR

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Quality of hire is one of the most important metrics for any HR department—but it’s also one of the hardest to track. Evaluating how much value each new hire is adding to your organization takes time, effort, and a deep understanding of your company’s needs. The payoff is an increased knowledge of what to look for in new hires and a greater cohesion of company identity. In this article, we’ll run over what quality of hire metrics are, how best to track them within your organization, and how your company can use them to profit.

What Is Quality Of Hire?

Your first thought about quality of hire might be that it is simply the benefit that each individual employee brings to the organization—and to an extent you’d be right. Quality of hire does focus on individual hires, but it’s a multistep process. As defined by ISO, quality of hire tracks with these metrics:

  • Quality of hire: Measures performance compared to pre-hire expectations.
  • Impact of hire: Measures a new hire’s contributions during a defined period.
  • Retention rate: Percent of workforce retained for a defined period.
  • Turnover rate: Number of separations ratioed against workforce.
  • Pre-hire expectations: The minimum acceptable performance criteria.
  • Performance: Quantitative or qualitative measured results.

Within the past few years, quality of hire has overtaken other valued recruitment funnel metrics in priority. With the addition of empirical evidence, quality of hire’s impact on the HR value chain has become paramount. But what are the benefits of knowing your organization’s quality of hire?

How Does Quality Of Hire Benefit HR?

The first, and possibly most important benefit of measuring your quality of hire is understanding what an optimal hire looks like—and it doesn’t always look like you think. You may find that the standards your organization has in place contradict what provides the most value over time, or that certain employees might be placed sub-optimally in relation to their skill sets.  Shifting the task-load of just one employee to better suit their skill set has two key benefits: They will be more efficient individually and as a team member, and they will be happier—and thus more likely to stay with your organization—increasing your retention rate over time.

When the results of your quality of hire studies are applied on a larger scale, the results can be staggering. Your sourcing strategy will become more efficient than ever. Not only will you know what type of talent you are looking for, but you’ll also be able to better place them within your company’s dynamic system. Your time to hire will decrease, saving time and money, and overall managerial and HR satisfaction will improve alongside it.

How Can You Improve Your Quality Of Hire?

While the benefits of increasing your quality of hire are apparent, the process of improving those metrics can be daunting. The first step, as the above sections covered, is to understand your ideal candidate, both generally and for specific positions. Once you know what you want from the talent, it’s time to integrate your expectations into the process. 

It should be noted that placing these specific metrics on the shoulders of human employees is risky. Human bias can oftentimes play a role in who passes the screening stage, at times invalidating your efforts to improve quality of hire. Automating portions of your hiring process is a great strategy for removing human bias from your recruiting plan. AI software tools can be programmed to look for your ideal candidate based on your needs, while ignoring unrelated characteristics like age, race, gender, etc. For sourcing, software like PandoExchange can optimize your job ad’s outreach, targeting job boards that are more likely to produce the results you need, as well as minimizing budgetary strain. 
Recruitment software can function as a way to evaluate candidates past the screening phase as well. Whether it’s sending assessments that can help determine whether an applicant has the necessary qualifications for the job, or judging their progress during training, AI recruitment software can be a great way to increase your quality of hire over time.

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