How startup founders can measure quality of hire
Amos Cariati
Customer Success Manager
August 27, 2024
•
5 min
First, let’s talk about what we mean by quality of hire. Quality of hire encompasses various factors, but it essentially measures the value that a new hire brings to your company. The metric is particularly important for startups because:
Early-stage startups typically have limited resources and time, and they need each new hire to bring as much value to the table as possible.
Startups thrive when they have a strong team. Quality hires lead to growth and innovation while making the wrong hires can lead to costly mistakes and slowed progress. Plus the extra time spent having to find another person for the role.
A high-quality hire improves more than performance, especially if they also align with company culture and contribute to a positive work environment.
By understanding and measuring the quality of hire, startups can make data-driven decisions to enhance their recruitment strategies and build a more effective team.
Quality of hire isn’t easy to measure, and can’t be defined by one simple metric. But, you can combine a variety of key metrics to get a better idea of your quality of hire. Not all of these metrics will matter to every startup, but having a good jumping-off point can help you drill down what matters to your company and how you define a “good” hire. With that in mind, some key metrics for measuring quality of hire might include:
1. Performance metrics
Performance metrics are the first and most obvious place to look. How well are new hires performing in their role and are they bringing value to the table efficiently? Some performance metrics you might look at include:
Key performance indicators (KPIs) - Simple and easy-to-measure metrics are a good place to start. You can see how close new hires are to meeting the expectations you have for others in the role. These KPIs depend on the role, but some examples would be the number of tasks they complete, sales quotas, etc.
Feedback - Feedback from other team members, managers or people who work under them if they’re in a management position can help provide a holistic view of a new hire’s performance.
Achievements - Evaluate if new hires are meeting or exceeding goals or objectives that were set out for them when they were brought on board.
Tracking these metrics helps ensure that employees are not only meeting their job expectations but are also contributing to the company’s overall success.
2. Retention rates
Retention rates are an important quality of hire metric. Retention rates measure how long employees stay with the company. You might be making great hires, but that’s not helpful if they leave the company quickly. Some key metrics you can look at include:
Turnover rate - This is the percentage of employees who leave the company within a period of time. High turnover means you may have issues in the hiring process or there might be issues with the workplace culture that's causing people to leave.
Top talent retention - It can also be helpful to monitor the retention rates of high performers compared to other team members. If you find top talent leaves at a higher rate than other employees, it could indicate you’re not offering competitive compensation or benefits compared to others in your industry.
Employee satisfaction - Conducting regular surveys to monitor employee satisfaction can help you understand if employees are enjoying the workplace or if there’s work to be done.
Focusing on retention helps make sure your startup is not only attracting talented individuals but also keeping them engaged and satisfied.
3. Ramp-up time
Ramp-up time is the amount of time it takes for a new hire to become fully productive in their role. Most new hires aren’t going to reach their maximum potential right away. There is a period of onboarding, training and getting comfortable with their workflows before they can perform at a high level.
Keeping track of ramp-up time is important because there may be room for improvement. If you benchmark your ramp-up time compared to others in your industry and find you’re above average or right where you need to be, it indicates you have a good onboarding process that helps new hires quickly adapt to their roles and bring value quickly.
On the flip side, if your ramp-up time is slow, it could indicate that additional training and a revamp of the onboarding process are needed to help employees reach their full potential.
4. Cultural fit
Cultural fit looks at how new hires align with your company values and how they get along with others in the work environment. Some key metrics you can look at include:
Employee satisfaction - Measure employee satisfaction regularly to ensure employees are happy and satisfied in their roles.
Employee engagement - Engaged employees are more productive and satisfied in their roles. They also contribute to a more positive work environment. Looking at employee engagement metrics can help you understand how many team members are championing your company and how many are likely wanting to leave.
Feedback - Feedback from other team members and managers can help you understand how well new hires are integrating into their new workplace culture. If you find many new hires are having trouble, you can readjust your onboarding or hiring to account for this.
Cultural fit is crucial for ensuring that new hires contribute positively to the work environment and work harmoniously with existing team members, so make sure you’re paying attention to this when measuring quality of hire.
Now that we know what metrics to look for when measuring quality of hire, the next step is implementing the right tools and strategies to track this data. Here are some great ways to track the data you need to measure quality of hire:
1. Use Dover’s free ATS (applicant tracking system) when hiring
Our free applicant tracking system is a great way to optimize your hiring process and make more great hires. Dover’s ATS has tools to help you:
Post to job boards - Dover can help you post to over 70 job boards in minutes, helping you expand your top-of-funnel and talk to a more diverse selection of candidates.
Create great job descriptions - Harness the power of AI to generate tailored, high-quality job descriptions to attract the right candidates.
Sort your candidates - Our sophisticated resume scoring algorithm can sort top candidates based on your parameters, so you can connect to top prospects right away.
Track every step of the candidate journey - We give you an organized and intuitive bird's eye view of where every candidate is in the hiring process. From our app, you can also communicate and collaborate with other hiring stakeholders to make sure everyone is on the same page.
Automate tedious tasks - Automate tasks like scheduling, personalized messages to candidates and more so you can focus on hiring. Use Dover to ensure top candidates are always engaged so they don’t slip through the cracks.
Using an ATS can help you optimize your hiring process, so you make more great hires and improve your quality of hire metrics at the source.
2. Leverage performance management software and HR tools
Make sure you use performance management software and HR tools to collect data and provide in-depth analytics on employee performance, retention, engagement and other key metrics. These reports can give you valuable insights into what you’re doing right and where you can improve.
3. Conduct regular performance reviews and surveys
Collecting data and improving your hiring process is great, but don’t underestimate the power of a well-structured performance review or survey. These can help you understand employee performance and their perspective. Conducting them regularly can help you understand if these metrics are improving over time.
4. Gather feedback from managers and peers
Finally, you can get feedback from management and leadership to see if everyone is on the same page about the quality of your hires. It’s easy to get wrapped up in your own perspective as a startup founder, but engaging with peers can help broaden your perspective and find potential avenues for improvement you might have missed otherwise.
Tips for improving quality of hire in startups
In short, if you want to improve quality of hire in your startup, try implementing the following tips:
Refine your hiring process - Make sure you’re continually evaluating your sourcing, recruiting, and hiring processes to attract the best talent.
Optimize onboarding - Help new hires seamlessly join the team by optimizing your onboarding process and giving them the resources and tools they need to succeed.
Improve the candidate experience - Make the hiring experience a pleasant one for candidates, so you can nab top talent and avoid letting the best candidates slip through the cracks.
Use data and analytics to iterate - Make sure you have the data you need to measure improvement so you can iterate on your processes and continually optimize them over time.
Important takeaways for founders
If you’re a startup founder, the idea of implementing a new process for a difficult-to-measure metric might seem like a big use of time and resources. But think about the amount of time you’ll save if you can make the right hire the first time, rather than having a high turnover and making poor hires that don’t add value.
Measuring quality of hire may not be appealing, but it can make a big impact. Also, you can utilize tools like Dover’s ATS or recruiting marketplace to make things easier.
Work with one of Dover’s hiring experts!
We told you the benefits of our ATS for your hiring pipeline, but don’t forget about our Recruiter Marketplace. Making great hires can be difficult if you don’t have an expert on your team or if your hiring team is already overwhelmed. Dover can connect you with full-cycle expert recruiters who know how to make great hires for startups. They also work at an affordable hourly rate, so you can use them as little or as often as you need them. Ready to connect with a recruiter today?
