Workforce Analytics Academy Part III: Quality of Hire

What is it (and isn’t) and how to measure it

Regardless of industry or geographical location, executives are sharpening their focus on the value of talent and its impact on productivity and profitability.  Every CEO knows that hiring the best people can translate directly into competitive advantage; they are also keenly aware of the negative impact below average performers can have not only on the bottom line but also on product/service quality, reputation and customer satisfaction – all of which could have lasting consequences for the future of a company.
Based on industry research, the difference in contribution between a top performer and a below-average one at the same grade can be well over 100 percent.  So if quality of hire is so important, then why are organizations not doing a better job of measuring it?
Metrics most often employed to measure quality of hire – time-to-fill, cost-per-hire and interview-to-hire – have little to do with assessing how well companies are doing in hiring the best person possible for the job.  These measures focus on the process of recruiting and not the impact these hiring decisions have on an organization’s ability to meet its business objectives.  Furthermore, characterizing these metrics as representatives of hire quality can easily lead to an environment where recruiters are evaluated and rewarded based on speed and cost and not on quality and value.
Instead, measuring the quality of hires should focus on factors that help assess the value these new employees contribute to the company’s long-term success.  While every organization (and each department and manager within an organization) perceives quality differently, they would all agree that employee productivity, impact and tenure have a positive effect on it.  As such, the following metrics and techniques are much better suited to provide the basis for meaningful quality-of-hire measurement and analysis:


  • Percent of new hires reaching acceptable productivity levels (e.g., goal completion, error rates) within acceptable time frame
  • Sales per new hire (for positions tied directly to profit such as sales or general management)
  • Revenue per employee


  • Performance reviews
  • 360 degree feedback
  • Hiring manager surveys after three, six and nine months of hire
  • Average job performance rating of new hires


  • New hire surveys
  • New hire retention (new hires that last over a year, between two and four years, and over five years)
  • Voluntary/involuntary staff attrition 
These measures and techniques are just examples organizations can use to assess how effective they are in obtaining the right talent for each vacancy.  Equally important to tracking and measuring quality of hire is communicating its value to the rest of the enterprise, thereby changing the perception that it is subjective and difficult to quantify.  By demonstrating that improvements in new-hire quality can produce exponential business benefits, the Human Resources function has great potential to maximize the value of the organization’s talent and contribute positively to its strategic success.
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