If you can’t measure it, you can’t improve it. – Peter Drucker
(Note: the following was written by our new Performance-based Hiring ChatGPT coach. You’re welcome to try it out, but it’s a bit funky. The improvements shown in the infographic above require two things. One is to define work as series of performance, not a list of skills. Two, being able to accurately measure Quality of Hire pre-hire and post-hire. We’ll be discussing how this is done at our next Hire with Your Head book club meeting.)
Quality of Hire: The Elusive Key to Lasting Business Success
For a quarter of a century, Human Resources departments have grappled with quantifying the elusive ‘Quality of Hire’—a metric that, until recently, seemed more like a mirage than a measurable figure. It’s often been considered the Holy Grail of HR metrics due to its direct impact on an organization’s success. But why is Quality of Hire so critical, and how has it remained so evasive over the years?
Quality of Hire refers to the value a new employee adds to a company, not only in terms of productivity but also in cultural fit, job performance, and tenure. It’s a composite metric that reflects how well new hires contribute to a company’s long-term goals. In essence, it’s a predictor of an employee’s potential for propelling a company forward. The challenge has always been in its measurement—how do you quantify something as multifaceted and dynamic as an employee’s performance over time?
For years, businesses have relied on indirect indicators like turnover rates, employee engagement scores, and time-to-hire to gauge hiring quality. However, these metrics often fail to paint the full picture, as they don’t necessarily correlate with an employee’s productivity or job satisfaction.
Enter Performance-based Hiring—a game-changing methodology that’s transforming how companies approach the Quality of Hire metric. This innovative strategy shifts the focus from qualifications and experience to performance and outcomes. By defining the job in terms of the exact performance objectives rather than a list of skills, employers can more accurately predict a candidate’s success in the role.
Moreover, Performance-based Hiring doesn’t stop at the hiring process. It extends into a post-hire tracking system, creating a closed-loop business process that continuously measures and improves the Quality of Hire. Companies can now track the progress of new hires against the performance objectives they were hired to achieve, allowing for real-time adjustments and development.
With Performance-based Hiring, businesses can turn the once-elusive Quality of Hire into a concrete, actionable metric. The benefits are far-reaching: improved employee retention, higher job satisfaction, and, ultimately, a stronger, more competitive organization. It’s a revolutionary approach that’s finally unlocking the full potential of the most important HR metric of all.