Quality of Hire

Ensure New Hires Deliver Strong Early Performance and Long-Term Potential

The High Cost of
Low Quality of Hire

Recruiting organizations are not delivering the high-quality hires their businesses urgently need. 1 in 5 hires are “bad hires" or are "regretted decisions," and the turnover rate among new hires is much higher than that of all employees combined. This has financial cost—US$1.6 million in rework for every 1,000 new hires—as well as soft costs: damaged employment brand, recruiter morale, employee engagement, and Recruiting's relationships with the line.

About 50% of our middle to executive management will be retiring in the next five to ten years.

Kim Nowell
Chief People Officer
Ingram Barge

Lower Quality —
And Slower, Too

Despite substantial investments in new recruiting tools and technologies, most recruiting functions have struggled to increase quality of hire. In fact, across industries and geographies, quality of hire has remained stagnant and even decreased in some instances. Worse still, it now takes 26 more business days to fill a role than in 2010. Slower recruiting increases the risk of losing talent to competitors, and the lost productivity costs over $8.55 million per 1,000 vacancies, on average.

How to Improve
Quality of Hire

Rather than relying primarily on new recruiting tools and technologies, focus your recruiting efforts on a key set of activities that drive quality the most:

  1. Measurement: Define and track a quality of hire metric.
  2. Recruiting Team: Improve recruiter profiles before
    purchasing better technology.
  3. Recruiting Process: Prioritize quality-driven activities in the recruiting process, such as promoting job brands and applying sourcing intelligence.
  4. Hiring Managers: Partner with hiring managers to build
    their skills in recruiting high-quality hires.

Assess Quality of Hire

Less than one third of recruiting organizations track quality of hire, primarily because quality is difficult to define and assess. Nonetheless, a defined, predictive measure of new hire quality is hugely powerful, and often is a fundamental differentiator of the best recruiting functions.

Manage Your
Recruiting Team

Many recruiting executives assume they need more resources to improve quality of hire. However, almost 80% of the variation in quality of hire is a function of people—recruiter profiles and staff management. Recruiting executives must:

  1. Attract high-performing recruiting talent. 
  2. Develop recruiters' Talent Advisor capabilities via
    experiential learning. 
  3. Engage and retain recruiting staff by communicating
    the impact of their work. 
  4. Manage recruiter workloads carefully (for every 10
    extra positions a recruiter takes on, recruiters' quality
    of hire decreases by at least 5%).

Optimize the
Recruiting Process

Recruiting organizations spend a large amount of time and effort interviewing candidates. However, the beginning and end of the recruiting process are more essential to get right to drive quality. Leading recruiters focus on:

  • Defining hiring needs 
  • Attracting high-quality candidates
  • Sourceing high-quality candidates
  • Assessing and selecting high-quality candidates
  • Onboarding new hires effectively

Engage Hiring Managers

Hiring managers have a bigger impact on quality of hire than recruiters. However, many hiring managers—especially those who hire infrequently—often lack the skill to navigate the recruiting process effectively. Recruiting teams must focus hiring managers on a select few activities that disproportionately impact quality of hire:

  • Engage hiring managers in needs definition
  • Show hiring managers how to select better candidates
  • Guide hiring managers in candidate care
  • Emphasize hiring manager input in onboarding

Accelerating
Recruiting

Since 2010, organizations have not seen any real improvement in quality of hire--yet it takes 26 more business days to fill a role. Slower recruiting increases the risk of losing talent to competitors, and the lost productivity costs over $11 million per 1,000 vacancies, on average.

Contrary to popular belief, accelerating hiring speed does not lead to lower quality of hire. In fact, time to hire can be reduced by 37 days without sacrificing quality of hire.

Competition for
Critical Talent

Demand for skilled talent is outstripping supply. This talent gap is especially large in roles characterized by expertise in new technologies or advanced data analytics—roles in high demand across almost all industries. Such hyper-competition for key talent can lead to costly salary wars and aggressive poaching strategies.

To avoid such costs, leading companies adopt a more market-driven approach to recruiting, which can save $1.8 million per 1,000 vacancies. Learn how your organization can adopt a market-driven sourcing strategy.