What Does It Mean?Quality of hire refers to the value a new hire brings to your company. The metric is somewhat more abstract than time to fill or time to hire KPIs, but it is also a measure that demonstrates HR analytics efficiency and success at identifying the right applicants for positions of need.
Why Does It Matter?
For any business, the goal of a new hire isn’t to simply fill positions with workers, but to ensure that new hires stay at the company and provide real value to justify the investment in them.
The quality of hire KPI helps you determine not just if a position was filled, but if it was filled by the right candidate. This is essential for companies considering it helps them establish if their hiring processes are consistently finding the right candidates, and if those hires are turning into successful, productive employees.
See it in action:
Quality of hire is important because it tells you how effectively your company is hiring the best talent.
How Do You Measure the KPI?Because quality of hire is a somewhat subjective KPI (it may change from company to company), there are several factors that can be applied to gain a clear picture of the metric. In many cases, quality of hire can be measured as a composite of factors such as retention, how long the position took to fill, how satisfied hiring managers are, as well as job performance, ramp-up time (how long it takes to reach full productivity), and engagement.
What Sources Would You Use to Measure the KPI?To track quality of hire, you can draw from sources of data that include hiring processes (time to hire, retention), performance (productivity, engagement, quality), and even company culture (employee fit, satisfaction).
Give Me an Example…
Imagine you’ve just completed a new round of hiring for a project, and as good as the candidates looked on paper, only a few have really met expectations. This means you’re about to spend more money on firing and eventually rehiring half of the team you just put together.
Quality of hire can tell you where to refocus your attention when it comes to hiring parameters and ensure that you’re hiring not just the “best” candidates, but those that are best qualified to work at your company.
What Benchmark/Indicators Should I Use?
Some useful benchmarks include:
- Job performance
- Ramp-up time
- Cultural fit