Most Talent Acquisition organizations measure the classic KPIs: Time to Fill, Time to Hire, Total Hires, and Offer Acceptance Percentage. A few go beyond and add conversion rates and DEI numbers. But usually, this is where measurement stops.
These KPIs can provide a good snapshot of recruiting activity. And you definitely want to bring TTF and TTH down while increasing total hires and offer acceptance.
But these metrics fail to measure the quality of the work. They measure activity, not performance.
In other words, if these are the only metrics for Talent Acquisition, being busy is more important than being good at what you do.
Hiring is an activity. Performance is what matters.
Unfortunately, the elusive nature of QoH often leads organizations to overlook its significance.
The Importance of Quality of Hire
No organization can say they value performance without incorporating quality metrics.
The challenge when measuring QoH is that it can become a subjective, biased metric when poorly implemented, which we believe causes more harm than good to the organization.
Unlike a factory product with clear quality specifications or a software product with detectable and measurable bugs, we’re dealing with people. How can you measure the quality of people?
You don’t.
QoH is measured by establishing objective criteria that don’t rely on the subjective perceptions of hiring managers.
A Practical Approach to Measuring Quality of Hire
You can find numerous suggestions on how to measure QoH.
Our method follows our process design philosophy. As with every other process we design, it’s immediately applicable without requiring complex software or additional paperwork.
Every dimension of our programs is adapted to the maturity of the client’s Talent strategy and resources. A startup that’s starting to implement these programs will need to start with simple approaches and resources. On the other hand, a robust and mature Talent organization can fine-tune its current programs to get even more valuable data that will inform them on what to do to improve performance.
Here’s how we do it:
Document the Expectations for Each Role
You can’t measure quality if you can’t define what great looks like.
Achieving clarity in role expectations is a crucial process. It goes beyond defining roles and responsibilities for the job description.
Every role should have the following:
- A defined set of objective criteria that is used to assess candidates
- A defined set of objective expectations for a new hire’s first 90 and 180 days
The list should be as objective as possible. Subjective criteria should not interfere with the data to avoid bias and keep the data useful.
In collaboration with their Talent partners, hiring managers will come up with the following key aspects of the role:
- Skills Spectrum: Each skill will be defined and ranked as required, optimal, or above expectation.
- Experience Spectrum: Similarly, each experience item will be defined and ranked as required, optimal, and above expectation.
- 90-Day Onboarding Checklist: A list of everything the new hire will need to learn about the role, team, tools, systems, and processes in the first 90 days.
- 180-Day Performance Expectation: A list of all the tasks and activities a new hire is expected to be able to perform by the sixth month in the role.
While this exercise should be undertaken for each new role, the results should serve as a reference guide for subsequent hiring within the same team or level. Team offsites can be an excellent opportunity to fine-tune this documentation, ensuring it remains relevant and comprehensive.
Even if the company does nothing else in this list, this exercise alone will reveal the gaps and divergence in the current understanding and expectation for roles.
KPI 1: Skills & Experience Index (SEI)
Candidates come with a different mix of interesting skills and experiences that they bring to the table. Assessments shouldn’t have binary “yes or no” questions. Candidates will fall within a spectrum. The better defined the scorecard or rubric is, the more helpful it will be to measure where in the skills and experience spectrum the candidate is.
Each skill and experience will be assigned a score or a percentage, with the optimal level being 100%. A good rule of thumb is:
- Below 70% or 80%: The candidate is not eligible for the role and shouldn’t be hired
- 100%: The candidate matches all the skills and experiences at the optimal level
- 120% +: The candidate matches all the skills and experiences at the above expectations level. Consider if the level is the right one for the candidate.
If too few candidates are hitting 100% it can mean three things:
- The company or team has a high bar for talent
- The expectations are not aligned with the talent pool for that market
- The sourcing strategy is not calibrated to match the role requirements
Although this data is an important piece of QoH, it shouldn’t be measured alone.
If the candidate has a low score but is assessed as a high-potential, it’s a manager’s choice to bet on talent. The caveat is that they should have higher learning agility to score well in the 90-day and 180-day marks, possibly demanding more time from the manager in the short term.
Mature Talent organizations can take it a step further and attribute weights for each skill and experience for better prioritization. This would result in a weighted average instead of a simple average.
KPI 2: 90-day Onboarding
Without a strong onboarding program, the organization is operating on a sink-or-swim system, which is the same as saying that it’s not being managed and is not investing in the success of its employees.
To measure the onboarding effectiveness, you should implement an Onboarding Checklist. Without it, this metric shouldn’t be measured. Otherwise, it can become a subjective performance evaluation, which defeats the purpose.
This metric should have a maximum of 100%. We do that because the goal is to ensure the checklist is completed, not to measure performance. There’s no overachievement in onboarding.
The hiring manager and the new hire will both complete a questionnaire to assess if the information was absorbed as intended. After 90 days, the new hire should feel confident they have learned about the company culture, structure, teams, tools, systems, and processes.
If the answers are not aligned, this is the perfect opportunity to intervene and ensure the new hire is positioned to succeed in their new role.
KPI 3: 180-day Performance
In this step, the goal is to keep the performance criteria as objective as possible. Tasks and processes expected to be adequately performed by month six are listed for each role in the first step.
The new hire will then be scored in three dimensions for each task:
- Independency: They can perform the task independently and without supervision
- Correctness: They can perform the task with minimal need for corrections
- Process and SLAs: They can perform the task within SLA without having to be reminded
These dimensions have one thing in common. They all measure the amount of time and resources that need to be allocated to the new hire for them to perform at a baseline expectation level.
We recommend adding a bonus score (20% to 30%) in this metric for when the new hire can perform all tasks listed and already takes ownership of work that exceeds expectations. It’s also a good idea to assess whether the new hire was assigned the right role level at hiring. Some organizations relevel the new hire attributing it to a hiring mistake.
If the performance score is low, it’s important to develop an immediate recovery plan to ensure they can ramp up within the following 90 days.
This step can be challenging as it depends on the manager’s ability to objectively measure performance. If there is no reliable way to assess and benchmark performance within the team, this step may not provide beneficial insights.
QoH: Combine All Three Metrics
After the 180d performance assessment is completed, you can combine the three scores to find the QoH for that hire.
You can average the numbers or just do a simple sum.
It should look like this:
SEI + 90d + 180d
90% + 100% + 90% = 280%
Or:
(SEI + 90d + 180d) / 3
(120% + 90% + 100%) / 3 = 310% / 3 = 103.3%
Averages can be useful for identifying trends, but we always caution against living by them. They can be deceiving and hide the problem by diluting it in the data.
Although it can seem more complicated, we believe that having all 3 indicators displayed is better. A 100% QoH with most new hires missing the onboarding checklist is not a good sign. On the other hand, if most new hires are getting 120% on the 180d assessment, it may be a sign that the bar for early performance is too low.
Final Step: Conduct Quality of Hire Reviews
After 180 days, if the new hire had a high QoH score, everything that happens after that should not be a reflection on Talent Acquisition.
However, this is an iterative approach. As with all other data-driven teams within the organization, the goal is to introduce a feedback loop for continuous improvement.
The Talent team and the executive team should meet regularly to review if the leaders’ perceptions match what the metric is showing. If QoH is high, but the leaders don’t believe the talent level has changed, the three steps must be addressed.
We recommend shorter cycles at first to fine-tune the model. Once every quarter is ideal. More mature organizations may have longer cycles, considering the model is fine-tuned for the current needs, but these may change according to strategy.
Recommendation: Implement a New Hire Satisfaction Metric
Although QoH is a robust method to measure talent acquisition, onboarding, and early performance, it captures the satisfaction levels of one side of the equation – the company.
Every employment is a contract between two parties. The organization expects the talent to perform, and the talent expects the organization to offer a good working environment and fulfill the promises made before they joined.
A successful Talent strategy needs to consider the perspective of the new hire. We recommend implementing a New Hire Satisfaction program to complement the QoH metric and give the leadership team a 360° view on Talent Acquisition.
Conclusion: A Journey of Continuous Improvement
Our methodology is designed to be implemented as a data-driven approach to Talent, to function as an iterative cycle, and accelerate learning and Talent strategy. It doesn’t end, it only comes back to the first step to be further refined.
The philosophy behind QoH is to go beyond measuring or accelerating new hire performance. The goal is to facilitate a self-discovery process for the company’s culture.
As organizations evolve, so too should expectations around talent. By continually reviewing and fine-tuning our hiring and onboarding processes, the company will create positive momentum and a culture of excellence, which will, in turn, help retain and attract the best talent.
