How to conduct a quality of hire audit

When someone new enters an organization, a ripple effect flows through the company, carrying the potential to recalibrate how a team works, connects, and thinks. One good hire can jumpstart innovation, strengthen team collaboration, and revive energy in a flat culture. One poor hire, however, can erode team credibility, stall workflow, and amplify inefficiencies.

Taking stock of new hires by measuring quality of hire helps organizations gauge whether recent newcomers are headed in the right direction and if hiring processes are maximized for optimal results. Quality of hire metrics can also serve as a blueprint to help change course and build something better when gaps are found. 

Here at Talogy, we conducted a research study to understand how to address common hiring challenges and improve quality of hire in the industrial sector. We found that to improve quality of hire, organizations must first define quality of hire metrics in a way that is tailored to a relevant job function. This enables hiring managers to track and improve the quality of newcomers. To get there, let’s clarify what quality of hire is and help you to measure it for any position with a quick, foundational checklist.

What is quality of hire?

Is quality of hire just an HR buzzword or a meaningful metric? Quality of hire measures the impact of a new hire, encompassing factors like performance, engagement, dependability, retention, trainability, and organizational fit. Quality of hire metrics, when implemented thoughtfully, have the potential to drive real impact in terms of refining hiring processes to improve talent quality.

Ignoring quality of hire means disregarding vulnerabilities in the hiring process that contribute to poor hires slipping through the cracks. It’s important to pay attention to quality of hire, as our research revealed four major consequences of bad hires:

1. Decreased productivity
2. Poor work quality impacting customers
3. High turnover rates
4. Increased safety incidents

In addition to these ramifications, a bad hire can cost organizations a lot. The U.S. Department of Labor estimates a poor hire costs the organization about 30% of the employee’s annual salary. And this figure doesn’t even factor in the indirect costs of bad hires such as reduced morale across the team, increased cost to repair mistakes, eroded trust among customers, and even litigation fees.

Paying attention to quality of hire — and conducting consistent audits using quality of hire metrics mapped to the role — not only helps identify shortcomings but also provides a template to tailor the hiring process to meet organizational and role needs more effectively. This is key in enabling organizations to avoid the direct and indirect costs associated with poor hires and improve quality of hire overall.

How to measure and improve quality of hire

How to create a custom quality of hire checklist

The above checklist serves as a foundation to develop quality of hire metrics specific to your role. Once metrics are defined, you’re prepared to perform a full quality of hire audit to uncover hiring gaps and outline steps for improvement. A few ways you might customize this checklist to define metrics that fit the role of interest:

Add tailored metrics. Use the checklist to help you brainstorm specific quality of hire metrics you may use for the target role. Consider additional questions to capture key success indicators that may be unique to the role. Some avenues you might explore for quality of hire metrics include:

• Identifying early signals that predict long-term success

• Using process metrics to track system performance

• Monitoring ramp-up time and job performance

• Seeking out input from supervisors and peers for additional perspectives

• Linking hiring to business outcomes (e.g., productivity, retention, cost savings, etc.)

• Using validation and research to understand what’s driving success and what is not

Evaluate core selection criteria. Some skills are essential on the job from day one, and it’s critical to select for these qualities at the time of hire to prevent quality issues during the onboarding and training phases. Quality of hire audits are a great way to check in on how well your hiring process is assessing these critical drivers of success and selecting those with high proficiency at the time of hire.

Think of which critical skills for this job may be harder to train and that you’re aiming to select for during hiring. Competencies such as attention to detail or positive attitude. What behaviors and beliefs might you assess that provide information on how attentive or positive the new employee is in their daily tasks?

Target problem areas. List the major pain points you see in the target role. Then, generate questions and metrics that help target these common obstacles or inefficiencies, and how the new employee is handling them.

Adapting your hiring strategy to secure quality employees

To ensure you are welcoming the most qualified new employees into your organization, you need to be able to know what quality of hire is, determine which metrics can be used to properly assess quality of hire, and then use that information to conduct an audit that shows where any gaps may exist in your process. While our research focused on industrial hiring challenges, the reality is that every industry has its own share of difficulties to overcome and hiring intentionally will help to address them. Having a solid strategy to distinguish quality hires from the rest of the candidate pool will ensure your organization avoids the poor hire pitfalls and builds a foundation of qualified employees.