Most Companies Don’t Measure Quality of Hire, Impacting Bottom Line Potential

A majority (85%) of the companies that measure quality of hire believe doing so has a positive impact on hiring quality; nearly half believe there is a significant impact (improvement of more than 25%), while a further 40% of companies believe hiring quality improves by more than 10%, according to a new global benchmarking report produced by Hudson RPO.


“All hiring managers know that there are considerable differences in productivity between average performers and high performers, which means quality of hire is imperative for businesses," says Hudson RPO Global Leader Kimberley Hubble. "Yet our study shows that 69% of respondents are not measuring quality of hire at all.”


The "Hiring for Success" report reveals that of those that do measure quality of hire, the majority do not track the most effective metrics, remaining focused on retention of new hires, hiring manager feedback, and employee performance appraisal ratings instead of employee productivity, promotion speed of new hires and revenue/profit per employee.


The report notes that best practice dictates that companies cross-reference metrics to create a multi-dimensional view. Often one metric does not tell the full story.


Of companies that measure, most do not differentiate between job roles. Executives, managers, sales staff, customer service staff and others are evaluated against the same metrics. For the greatest value, companies should develop specific metrics to fit each job group or family.


Overall, companies grapple with their HR technology. Only 35% of respondents say their HR information systems are working “well” or “fairly well” for them in supporting the measurement of hiring quality.


Worldwide, hiring manager and recruiter skills were noted as the most important influences on qualiy of hiring.


Surprisingly, less than half of the respondents identified a connection between candidate source and quality of hire.


According to the report, measurement of candidates’ motivational drives and behavioural capabilities in combination is the most accurate predictor of whether a candidate would be a high performer in a role: 91% of hires were rated good or excellent when such formal procedures were used.


More than half (62%) of those who measure quality of hire state that it has a dramatic impact (more than 25% improvement) on new hire retention.

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