2 Challenges to Optimizing Your Quality of Hire Metric

by Daniel James January 22, 2016
January 22, 2016

Everyone has that one golden metric they use when it comes to measuring employee performance, so what’s yours? If you’re like most organizations then your answer will sound something like this: our most important metric when measuring employee performance is quality of hire. And you’re not alone – as we discussed in a blog post two weeks ago, a LinkedIn report noted that quality of hire is going to be the key metric for most organizations in 2016, with 39% of surveyed organizations saying that’s going to be their go-to metric for performance.

But there’s a challenge to having a metric like quality of hire being this important. A couple challenges in fact. LinkedIn’s report noted both of them, and we’re here to expand on them a bit further.

This is an interesting challenge because, at a first glance, it may not seem like a challenge.

quality of hire, how to measure quality of hire, challenges with quality of hireLinkedIn’s report noted that there are multiple ways companies are measuring their quality of hire. These methods include:

  • Performance evaluation (50% of organizations do this)
  • Turnover and retention statistics (49%)
  • Hiring manager satisfaction (43%)

So why is this a challenge? Because each one has it’s pros and cons, and only using one or two limits the scope on your measurement of quality of hire.

Let’s take a look at performance evaluation, the most common way of measuring quality of hire. Yes, the evaluation of one’s performance on the job would indicate whether or not the hire was good, but only in the sense that they get their essential work functions done and maybe some surrounding points like company culture. But this can be a measurement that’s fairly small in scope, meaning that if you’re not looking at what the employee does well and then reapplying it to your own hiring process you’re going to end up struggling. It’s great to look at where the employee stands, but being able to use that knowledge towards future hires to ensure the quality of hires stays high is challenging.

There’s also turnover and retention statistics. This one can certainly reflect if the hire was good or not, but it’s also easy to say ‘it must have been a bad hire because the hire didn’t work out’ without giving it much more thought. The reality, however, is that attrition can happen for any number of reasons, and if you’re not looking at what went wrong and — most importantly — what your organization could have done differently, you’ll have a harder time improving your quality of hires with this measurement.

Finally, there’s hiring manager satisfaction. Much like performance evaluation, this can seem like a good one — if the hiring manager is doing well at hiring, then the hires must be good, right? The challenge is isn’t if it works out, but adjusting as time goes on. The hiring manager could be satisfied today, but what improvements need to be made? Adjusting hiring expectations to meet a change both in job requirements and applicant pools helps organizations stay one step ahead of their competitors, and your hiring manager will need to do the same.

Let’s say you are doing everything right — do you trust your data enough to make changes necessary to continue improving upon your quality of hire?

If you said no, that’s okay — according to LinkedIn’s study, most organizations don’t. In fact, according to the study, the average level of confidence is very low, with only 33% of organizations feeling that their methods are strong enough to trust when it comes to business and talent acquisition decisions. Furthermore, only 5% of organizations believe that they’re doing the best they can and outdoing the competition while they’re at it.

The United States hits right below average of quality of hire confidence at 32%, India leads the way at 54%, and China has the lowest confidence of all countries surveyed at 20%.

The question here is “if companies understand why quality of hire is important, and use that as their key performance metric, why aren’t they more confident at measuring it?”

And, unfortunately, there may be no one right answer. We know that companies struggle with confidence in their data already, and that even though most organizations recognize the importance of data they still are afraid to use it. We also know that hiring managers and talent acquisition teams can be quick to trust their gut over the data in front of them, so that even if the data says one thing they may still make the wrong choice simply because they don’t trust their own data.

This will likely be a trend that continues, even after companies start to become more data friendly and the use of talent analytics becomes more common in the hiring space. This concept is still a new frontier of hiring, and organizations will need to adjust accordingly. However, you can improve your efforts on this by starting to implement methods to help you trust your data. We advocate that the hiring process is the best place to start. Not only are you recording information that’s used to make a decision, but you can also use that information to revisit the hiring process and adjust your assessments, interview questions, and other methods accordingly. This directly ties into quality of hire – you’re measuring the candidate when they’re a job candidate, and following them through their employment to see what you should be looking for and what you should be avoiding, as well as what works and what doesn’t in your own hiring process to target those successes in a candidate.

Quality of hire is a fickle topic that will have plenty of discussion in 2016. You can be assured, however, that we will be discussing this topic and doing our best to help you develop the best quality of hire processes possible.


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