As a business leader, has your company fallen culprit to poor hiring choices? If so, you’d be amongst the 85% of decision-makers who claim their business has made a bad hire.
There are numerous consequences for hiring the wrong person for a role, from lower productivity to increased recruitment and training costs.
By measuring quality of hire, businesses can identify pain points in their hiring processes and better understand their return on investment in recruitment. Here is a helpful guide to put you on the right path to hiring the right person—every time.
What is quality of hire and why is it important?
Quality of hire is the extent to which the value a new team member brings to the company outweighs the cost of recruiting them. Common ways of defining value include productivity and customer satisfaction. A new team member can also increase a company’s long term value by suggesting how things can be improved.
Quality of hire is rapidly becoming HR’s most important metric, and for good reason. Finding a candidate with the right skills and attributes the first time round will significantly benefit company performance, ensuring that leaders get their money’s worth from recruitment, training and development.
How do you measure quality of hire?
Firstly, reviews are a common tool used by leaders to determine a new hire’s progress. These reviews can score employees on how they are getting on in their respective role. By using a numerical rating, managers can create a scalable system to quantify whether their new hires have been successful.
The same principle can be applied to client and end-user satisfaction. Therefore, consider sending out surveys that score employees on their responsiveness, communication and overall level of service. This data can then be used to obtain a more well-rounded understanding of performance and overall quality of hire.
On a side note, quantifying employees’ progress can also show where the strongest candidates are coming from. This will allow leaders to stop wasting money on channels that are consistently putting out a low quality of hire.
Finally, staff turnover and retention rates can be used as insights into whether the right people are being placed in key roles. More often than not, a high churn rate suggests that the hiring process needs an overhaul. After all, quality of hire isn’t just about what a person offers, it’s about whether they are in a setting where they can develop and thrive.
How to improve quality of hire
Ultimately, poor quality of hire suggests that the recruitment process needs an overhaul. For instance, have leaders been so blinded by bias that they just can’t seem to make the right hiring decisions?
Unconscious bias shifts the focus away from a person’s skills and abilities and onto a person’s age, gender or where they went to uni, to name a few common examples. So how can leaders root it out of the process and knock their hiring decisions out of the park?
By making all job applications anonymous, hiring managers won’t be distracted by things that may seem impressive, but don’t have an impact on quality of hire. For instance, someone may have gone to a Russell Group uni or have years of experience in the field, but who knows how many years they’ve spent just scraping by? A landmark study by Schmidt & Hunter found that years of experience and education are some of the least predictive indicators of quality of hire.
Use skills-based testing
A lot of organisations struggling with a low quality of hire may need to reconsider the role of ‘cultural fit’ in their hiring decisions. What this essentially means is that candidates may be hired based on a preconceived mould of the ‘ideal’ employee, as opposed to whether they have the right skills to get the job done.
At Applied, we use work-based sample questions to uncover the strongest candidates. We stick to this method based on our own research, which shows that a skills-based approach is the strongest predictor of performance and long-term success.
Avoid unstructured interviews
Unstructured interviews tend to take the form of free-flow ‘chats’. While these can help get a sense of a candidate’s personality and character, they are not the most effective way of determining how well they’d perform in the job.
Structured interviews follow a set pattern of questions so that every candidate has the exact same experience. This creates a more level playing field and makes it much easier to objectively compare what each person can bring to the role. For this reason, they are much more reliable in terms of assessing a candidate’s skills and abilities.
Applied is the essential platform for debiased hiring. Find out how we’re pushing back against conventional hiring wisdom with a smarter solution: book in a demo