How to measure and improve quality of hire

If you want a more efficient hiring process, you first need to understand the quality of the hires you're making. Measuring quality of hire (QoH) lets you pinpoint what's driving weak performance or early exits and fix it.

And because stronger hires tend to stay longer, improving QoH boosts retention, which means less churn and rehiring into the same roles. This article walks you through building your own metric and scorecard to measure quality of hire, then shows you how to start improving it.

What is quality of hire?

Quality of hire is a key performance indicator (KPI) that measures the value a new hire adds to a company. Usually, the core elements comprising quality of hire include how well the new hire is performing, how well they fit in and engage with company culture after onboarding, and how long they stay and contribute to the organization. 

Other metrics, like time to fill or cost per hire, can help understand and map the top-level of how your hiring process is working. However, to really dig into the efficacy of your hiring, you also need the softer signals: how the hiring manager rates the new hire, how well they've meshed with the team, and how much they're contributing to business goals. These are harder to quantify than a ramp-time or retention figure, but they capture value those numbers miss.

Is there a standard quality of hire formula?

There is not a universal quality of hire formula, but there are key metrics and indicators that are commonly used by companies such as performance, hiring manager satisfaction, employee engagement, retention rate, and promotion. Most companies will choose a selection of these most relevant to their needs and aims, and build their formula for measuring quality of hire based on these.

Why is quality of hire hard to measure?

QoH is hard to measure, partly because it means something different at every company. Your mix of needs, priorities, and stakeholders is specific to you, so a strong hire in your organization isn't defined the same way it would be elsewhere. On top of that, the qualitative side (culture fit, satisfaction, performance) is nuanced, and how you measure it shapes what you find. Collect the data inconsistently, and the results won't be reliable or comparable, so when and how you gather it matters as much as what you ask.

Practical and administrative factors can also make measuring quality of hire a nightmare. QoH pulls together data that lives in separate systems: performance review scores in your HR tools, tenure and exit reasons in your HRIS, manager satisfaction from surveys, output in your CRM or project software. Calculating it means matching all of that to the same person, and often no one owns joining those systems up or has an easy way to connect them.

This complexity can make attempting to measure QoH unappealing, and it’s easy to let it slip off a busy agenda. However, there are real and expensive costs to leaving it off. Hires that lack quality mean poor performance, high staff turnover, wasted time, lost productivity, and eroded trust in the talent acquisition process.

Quality of hire signals that matter

The most useful measures of quality of hire split into pre-hire signals and post-hire outcomes. Pre-hire signals are measured before a candidate is hired and used to predict their future success. Post-hire outcomes are measured after someone starts and show how well they're actually doing in the role.

Pre-hire signals

Pre-hire signals refer to the metrics you capture about a candidate during the vetting and interviewing stages. This evidence is often a predictor of the person’s success in their future role. Examples of pre-hire signals include: 

• Interview scores: Research-based standardized questions and scoring rubrics to assess job knowledge and fit.
• Assessments and work sample scores: Results on job-relevant tasks or tests, especially samples that mirror the actual work, give a direct read on capability.
• Recruitment criteria: How closely the candidate meets the role requirements and experience level. 
• Reference quality: How favorably past employers speak about the candidate.

Track these by source as well as systematically, so you can see not just whether a signal predicted success but which channels tend to deliver candidates who score well.

Post-hire outcomes

Post-hire outcomes generally fall into the following three categories.

Performance

• Performance ratings of the new hire by their manager or peers.
• Achievement of specific goals or targets such as revenue generated.

Satisfaction

• The satisfaction rating of the hiring manager.
• The new hire’s own satisfaction, which can be surfaced from onboarding feedback.
• Engagement and integration with the company, which can be surfaced from an engagement survey.

Time-based

• Time to productivity (how long until the new hire is contributing at the expected level).
• Time to promotion (how long the employee was in their initial role before growing into a new one).
• Retention (how long the new hire stays).

The indicators above give you a sense of how well a new hire is doing at their job and how long it took them to ramp up to being a productive team member. This data can also tell you if a new staff member is experiencing a good cultural fit with the organization.

How to build a quality of hire scorecard

Quality of hire scorecards combine key, weighted indicators into a composite score. Weighted indicators allow you to decide which factors should have more or less importance, depending on what’s most important to your organization. When done well, this scorecard approach provides a manageable way to capture the complexity of QoH. 

Create a scorecard in the following four steps. 

1. Start by choosing inputs relevant to the role or team. Aim for at least three and no more than five to keep the inputs multi-dimensional but practical. 
2. Weight the indicators by deciding what matters most. For example, is fit with company values more important than speedy goal attainment within your organization? Is the satisfaction of the hiring manager or team more important to you? Assign each input a percentage of the total so the weights sum to 100.
3. Determine how you will measure each element, whether with existing data or data you’ll need to collect. Decide who will own data collection and standardize the format and cadence for doing so. 
4. Link your pre-hire and post-hire indicators to the same hire, then analyze by department, role, and source.

How to improve quality of hire

Improving quality of hire isn't a quick fix; it's a project to work on over time across the different stages of the recruitment funnel. 

• Improve your pipeline: The improvement process begins with strengthening your pipeline, starting with source quality and diversity. Broaden your sourcing channels so that you’re not depending on just one, and tighten up your company’s referral process to encourage internal staff to recommend top talent from their circles. Also, check the precision of your job descriptions, ensuring that they adequately reflect the responsibilities of roles to attract only well-aligned candidates.
• Strengthen the selection process: Standardize your screening criteria for fair, even candidate assessments that all your recruiting team can consistently apply. When interviewing, ask applicants to tie their skills to real-world scenarios, so that you can learn how they’d perform in live work. 
• Maintain robust data: Consider pre- and post-hire data together to draw conclusions about your sourcing and screening processes—and where they need improvements. If a source routinely surfaces candidates that turn over quickly, move away from it. If an interview technique (like a take-home assessment) regularly leads to better hires, keep doing it.

Next steps for measuring quality of hire

Whether you’re starting from scratch or revising your current quality of hire measurement, start with your baseline data collection. A few indicators that capture what matters to your company and that you can measure reliably will serve you far better than an elaborate system that tracks everything but is too time-consuming to keep up. Start simple, then add and adjust as you review how well it's working after six months or a year.

Reliability and consistency in your data is directly linked to how you collect that data. So, make sure your hiring managers always use the same questionnaires and run them on the same cadence. Otherwise, you aren't comparing the same measure when you look at the data, and your findings will be less reliable.

Once you are happy with the consistency of your QoH indicator measurement, work on some of the more complex elements: integrating different data sources and tracking hires for longer periods. You’ll also want to fine-tune your scorecards to specific roles.

Raise quality of hire at the source with Juicebox

If you're evaluating your quality of hire, it's worth looking at the tools that shape outcomes at each point in the funnel. Realistically, the quality of your hiring is capped early, at the pre-hire stage, by the talent you can find and attract to apply. 

With Juicebox, plain-language search surfaces candidates from a pool of more than 800 million passive and active profiles and matches them to your criteria. Try its plain-language search, and you'll get a better-matched shortlist, so your hiring process starts with the strongest candidates rather than trying to recover quality later.