How to Measure Quality of Hire to Drive Business Outcomes?
Quality of hire is a quantifiable measure that is used to measure the effectiveness of the recruiting process to hire the employees. An effective hiring process is said to be the one in which the right talent is matched to the right position that has a good impact on overall company performance.
If you hire the wrong person, their performance rating suffers, thus impacting the effectiveness of the hiring process. On the other hand, an employee that is engaged performs well, and stays with the company is indicative of an effective hiring process.
Thus, it is important to know how effective your hiring process is so that you can fix the problems and promote what’s working well. It is always a great idea to connect with the HR software solution providers in India.
A common practice in the modern HR platform years past was to promote quality of hire and individual job performance. Quality of hire is an essential component of the HR value chain. There is empirical evidence that proves HRM practices drive HRM outcomes, and HRM outcomes drive organizational success.
Why should you measure the quality of hire?
Despite the challenges, you should measure and understand what is the quality of hire means to your business because the success of your company depends on it
- The Net hiring score calculates the fit between new hires and jobs using a simple and easy method.
- Hiring consists of the following question after ramp-up time: On a scale of 0-10, how much of a fit is this new job for you?
- Results should be gathered and categorized into the percentage of those employees who answered maximum questions (Great fits) and subtract from those who answered minimum questions (Poor fits). Then multiply the result by 100 to determine your hiring score.
Talent creates value: You should recruit the right person in the right place so that the right talent in the right place, your organization can succeed.
Measurement drives excellence: The hiring value chain shows, measuring and improving the efficiency and effectiveness of the talent acquisition processes that acquire and onboard the right talent drives better business outcomes. The HR software for large companies allows you to measure results in a better way.
Quality of hire measurements: In the past, it was easy to calculate the quality of hire and readily available. However, it is now changed to measuring the value and contributions your new hires add to the organization.
As the ability to measure processes and outcomes has grown, you have a list of measures to evaluate results. These three factors are:
- Hiring budget /Total recruiting costs: You need to finalise the hiring budget, rather than thinking of recruiting costs as an expense, this model considers those costs as an investment in people.
- The percentage of jobs filled on time: Focus on delivering value, considering the variability of the time it takes to hire specific skill sets.
- Net Hiring Score: Net hiring score measures the fit between new hires and jobs based on a survey of both hiring managers and new employees after ramp-up time.
Developing your quality of hire: Developing your measurement program will take time, and it is not an easy task.
- You should find the right formula, which can take a few months or even years of experiment
- You need to track all the metrics that drive the quality of hire on a long-term, continuous basis.
- Your quality of hire metrics may change as your business changes.
There are many effective modern HR platforms that can help the managers and HR departments to run things professionally. It is recommended to hire the best HR software for large companies in India to boost the efficiency of the company.