4 Steps Companies Should Follow to Measure QoH Using Technology

Tracking the Quality of Hire can improve hiring, recruiting, and retention. Here’s how technology helps to measure it.

Last Updated: September 23, 2022

HR teams often measure the quality of hire (QoH) to identify their new hires’ impact on the organization. However, they struggle to measure it in an actionable way. Kerry Wang, CEO, and co-founder of Searchlight, discusses a few ways HR teams can use tech to measure QoH successfully.

According to a studyOpens a new window by leadership and training company Leadership IQ, 46% of newly hired employees fail within 18 months. To help improve these numbers, many HR teams measure a KPI called Quality of Hire (QoH) to quantify the impact their hires have on the larger organization. But this elusive QoH metric has traditionally been difficult to create and measure in an actionable way. The premise of measuring the success of recruiting and hiring by examining the ROI produced by engaged, well-aligned new hires is not a new concept, but many HR teams have struggled to implement it. Recently, technologies to define and track QoH metrics have made it more feasible to link that intelligence back into an ecosystem that improves overall business outcomes.

This article will explore the QoH metric in more detail and explain best practices for measuring it successfully.

What Is the cloud?

QoH is the impact that each person has on the organization. Measuring and understanding the levers to improve QoH allows organizations to understand how effective their hiring processes are at bringing in high performers (someone highly competent in their role and strongly culturally aligned with their organization). In turn, this allows the organization to measure and understand which recruiters are doing the best in this regard.

Measuring the quality of a new hire means focusing on outcomes — not just how quickly the role was filled or how well a new hire is performing. That means a QoH metric must include data from the new hire’s first weeks and months. It also includes both employee capabilities and their fit to the organization in question. A person might excel at one company but struggle at the same role at a different company because of cultural differences. Because of this, QoH must consider the unique behaviors, working styles, and values of the organization as well as the competencies, strengths, gaps, career interests, and cultural alignment of the individual. Employee performance is a piece of this, but it goes far beyond that. It is also vital that this metric is determined bidirectionally, looking at both the manager’s and the employee’s point of view.

Benefits and Challenges

As the saying goes, what gets measured gets improved. Measuring QoH and improving it can bring many benefits to the business, including:

  • Boosting productivity of teams by giving them high-performing new employees
  • Reducing bias in hiring
  • Improving offer acceptance rates
  • Reducing mis-hires and costly backfills
  • Improving retention
  • Proactively manage potential performance/culture issues
  • Reducing time to hire (although this is not a primary focus, tracking Quality of Hire often improves the hiring process to the point where it goes faster)

But why is measuring QoH so difficult? The short answer is there is no standard formula to calculate QoH. Furthermore, it requires “outcome data” on how well new hires perform, which must be gathered manually using manager feedback, check-ins, or some type of survey at regular intervals after they have been hired. In practice, most organizations must spend the better part of a year amassing data until they get useful results. This is often too late for the hiring team to capture useful insights.

See More: Organizations Struggle To Hire as Job Openings Soar: Quarterly Recruitment Outlook Survey

Advances in Technology Make Implementation More Possible

However, recent advances in big data analysis and AI technologies have made it possible to measure the Quality of Hire in a more comprehensive, data-backed while eliminating much of the manual work. The process of gathering the data needed to calculate the Quality of Hire can be automated with regular pulse surveys sent to a new hire’s references, the new hire themselves, and their manager (if they are hired). AI models can analyze this data (and additional data that measures employee outcomes, like sales numbers or performance reviews). If an organization has settled on a formula for calculating the Quality of Hire, they can even build systems to calculate it automatically.

How can an organization implement this? Here are four steps organizations should follow.

  1. Build a coalition: In many organizations, the person who cares most about QoH is the CEO; other times, it is the Chief People Officer or VP of Talent. This person should take on the role of internal champion of these efforts. The higher up in the organization, the better, as QoH requires a mindset shift in recruiting (away from measuring success as “butt in seats” and towards the impact on the bottom line of the business). This champion should bring in Learning and Development or People Analytics teams that might benefit from the data and other business leaders interested in improving hiring.
  2. Create a business case: A single bad hire can cost an organization up to $240,000. Use this number to get buy-in from any departmental leaders that may resist measuring QoH. Consider developing a boilerplate with data on how expensive mis-hires are, how QoH works, and the benefits of measuring it. Pitch new business leaders as needed. As they come on board, make sure they have bought into the KPIs for success.
  3. Buy or build the necessary technology: Once the coalition has buy-in for the QoH program from all the necessary stakeholders, they need to select a product or build a custom system for measuring QoH. Some products have built formulas for measuring QoH that works for most organizations, but it may make sense to develop your own. If so, make sure it can be implemented across all hiring without excessive time and costs. This will require some type of software-based automated measurement of new hire outcomes and some AI/big data analysis of those results, with the details customized to fit the needs of the organization in question.
  4. Implement and iterate: Put the chosen system into practice, see how it works, revisit it periodically, and make improvements as necessary.

Calculating and tracking QoH not only helps companies hire more effective people in less time but also helps them discover their own organizational culture and track the effects of recruiting on hiring on the business. Heads of Talent making vital decisions without all the relevant data will eventually lead to costly mistakes, including attrition and unhealthy culture. QoH is a way to get the data they need to ensure the organization continues to grow and thrive.

How are you measuring the quality of hires in your organization? Let us know on FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window .

MORE ON HIRING

Kerry Wang
Kerry Wang

Co-founder and CEO, Searchlight

Kerry X. Wang is the cofounder and CEO of Searchlight. She started Searchlight with her twin sister and CTO, Anna, to make hiring win-win for everyone by understanding talent better. Searchlight offers a Predictive Talent Platform that measures and improves Quality of Hire by connecting candidate reference and self-assessment data to post-hire outcomes. Prior to Searchlight, Kerry worked in product sales at Google and management consulting at McKinsey. Kerry is a 2021 Forbes 30 Under 30 honoree and graduated from Stanford with a B.A. in Human Biology - Org Behavior and an M.S. in Computer Science.
Take me to Community
Do you still have questions? Head over to the Spiceworks Community to find answers.