How to Make Quality Of Hire a Simple yet Vital Metric

It's allegedly the most important metric in recruiting. Let's un-complicate it.

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Feb 23, 2024

Quality of hire should be one of the most important measures your company tracks. Of course, you want to know how many of your new hires make it through orientation and stay long-term. But as important (if not more so) is the question of whether the person you hired is a star, middle performer, or worse.

Out in the real world, quality of hire is a metric that suffers from two big problems. First, there are organizations that don’t do much (or anything) to measure it. Not measuring quality of hire is akin to a company signing a bunch of new customers without assessing whether those customers are profitable; it’s management malpractice.

Second, the companies that diligently track the quality of hires often overcomplicate the issue. You don’t need 20 columns on a spreadsheet to assess if the people you’ve hired are top-notch.

I recently chatted with Brad Jacobs, billionaire CEO and author of How to Make a Few Billion Dollars. He has an exercise for quickly assessing whether someone is truly an A player. “I imagine that person coming into my office and quitting without warning: ‘Hey, Brad. Don’t try to talk me out of this. I’ve already got another job in another city. We bought a house. So, I’m not here to negotiate a counteroffer. I’m here to talk about a transition plan and leave in a responsible way so everyone’s happy.’… If my reaction is an internal dialogue of panic along the lines of, ‘We’re so screwed! How did we get into this situation? There’s no way we’re going to find somebody as fantastic as this person!’ — and I’m so freaked out I can’t even hear what else they’re saying — that’s an A player.”

That elegantly simple definition comes from a billionaire CEO whose companies have had as many as 150,000 employees, so simplicity can be incredibly effective even in large enterprises.

You can also track quality of hire on a global level while still maintaining a similar level of uncomplicatedness. A recent report on employee engagement surveys offers the following question to insert into your quarterly or annual surveys: “This organization hires people who fit well with the company values.”

You can tweak that question, of course, depending on whether you want to assess values, attitudes, skills, or anything else. As long as you consistently track the scores on that question, you’ll get a quick and easy measure of whether your organization’s quality of hire is moving in the right or wrong direction.

It seems like a simple measure, yet a study on company values discovered that only 20% say that their company always hires people who fit well with their company values. And employees are 135% more engaged when their company always hires people who fit the company values.

Far too much of today’s recruiting focuses on filling positions without asking whether the people we’re hiring are achieving stellar or middling success. Just because someone stays for some period of time does not automatically mean that the hire was successful. In fact, anyone who has managed people knows that it’s far more painful to have a terrible hire remain on staff than it is for them to quit.

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