This Is How Quality of Hire Should Inform Your Recruiting Process

Quality of hire represents what new hires bring to your company in terms of alignment with company values.

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By Andre Lavoie


Opinions expressed by Entrepreneur contributors are their own.

The quality-of-hire metric has been hailed as one of the most important tools for hiring. And, to be sure, its benefits are extensive: higher retention rates, stronger company culture, improved performance and better engagement, to name a few.

Related: The Key to Hiring the Best Employees

Most employers also know how impactful the quality-of-hire metric can be. The Hudson RPO Quality of Hire Report from 2013 found that 97 percent of the 246 companies surveyed said quality of hire was important to their organizations.

However, despite this awareness of the importance of quality hiring, concrete actions toward this goal are not being taken: Only 32 percent of the companies in the survey said they were actively measuring quality of hire.

What quality of hire actually means

Quality of hire represents the value new hires bring to a company. This metric quantifies how effective a hiring team is at finding strong talent and hiring the right people for the right position. HR, then, should embrace this measurement as a way to improve its recruiting process and build a better company.

As proof, consider Careerbuilder's 2015 Candidate Behavior Study, in which 73 percent of 2,002 hiring managers surveyed said that hiring a bad candidate cost much more than keeping the position open.

A few years ago, Zappos CEO Tony Hsieh restructured his company's recruiting process. He said that the bad hires made during the course of Zappos' lifetime had cost his company "well over $100 million."

So, the message here is, don't waste time and money hiring employees who don't align with you company and the role they are applying for.

Here's a look at how the quality-of-hire metric can inform three aspects of your recruiting process:

1. Are your new hires aligned with your company values?

Look at company values and your shared vision, and note how new hires measure up to these things. Do those new hires share the same passion as the team for the mission? Are they contributing insight from a unique perspective? Do they engage and fit into the culture of the company?

If they don't, look at how your recruiting process is structured. If your company values people who are creative, put that in the application process. Present candidates with a writing assignment, or ask for a video that allows them to showcase their creativity and demonstrate the value they can bring.

At ClearCompany, we put a big emphasis on cultural fit. Our hiring process is structured to give candidates an opportunity to demonstrate their "fit" through a presentation of their own choosing. We give little guidance on the topic, and ultimately learn a lot about the individuals we have asked to present.

Encouraging the submission of cover letters also allows a recruiter to gain a better sense of the person behind the resume before he or she is selected for an interview. Cover letters give candidates the space to express a personality.

Related: 5 Ways to Make Your Company's Hiring Process More Fair

2. Do the new hires fit their roles?

If the candidate skill sets and experience your company attracts don't measure up to the needs of the role, perhaps it's time to look at how HR is posting your jobs.

Use role-based competencies and goals to inform job descriptions and drive clarity around the qualifications needed for both your candidates and hiring team. It is essential that you understand who A-players are currently, and what makes them the top performers. Use their correlating metrics to find more candidates like them, and drive talent success.

Additionally, look at how interviews are conducted. A strong interviewer asks the right questions to elicit responses relevant to what the business needs in the prospective role. If you aren't already using competency-based interview scorecards, you should be. Doing so ensures a consistent, and outcome-based process for everyone.

3. How do the new hires perform?

Performance is one of the most important aspects to measure. As a best practice, provide ongoing feedback that is constructive, and note how employees respond to it.

Also look at how HR is onboarding new hires. Are expectations clearly stated on day one? How is management communicating them? Is there a more effective, engaging way to measure a candidate's performance before hiring, such as the administration of tests or assigned projects before the interview?

Related: You Need a Secret Sauce to Hire Top-Notch Employees

The recruiting process can be simplified and more effective in finding top talent when companies utilize quality of hire.

How do you measure quality of hire, and how does that metric impact your recruiting process?

Andre Lavoie

Entrepreneur; CEO and Co-Founder, ClearCompany

Andre Lavoie is the CEO of ClearCompany, the talent-management solution that helps companies identify, hire and retain more A players. You can connect with him and the ClearCompany team on Facebook LinkedIn and Twitter.


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