How to Improve Quality of Hire

Quality of hire is the North Star metric. Improving this metric drive long-term business value via a more capable, stable, and engaged workforce.

When quality of hire is high, you see it in higher productivity, innovation, and lower turnover costs.

This research will provide insights on how to improve quality of hire, tapping into best practices from leading organizations.

1. Rigorous Candidate Assessment

All major companies we researched are known for challenging interviews and high hiring standards.

Amazon has institutionalized its “Hire and Develop the Best” mantra via the Bar Raiser program. A Bar Raiser ensures that each hire is better than at least half of the current people in that role – literally “raising the bar”.

This data-driven, scaled program helps Amazon avoid making compromises under pressure, contributing to a consistently high caliber of talent.

The expected outcome is better performance and retention. Indeed, Amazon explicitly hires for “long-term growth and innovation” potential, not just immediate skills.

2. Data-Driven Selection and Calibration

Google is famed for its People Analytics team that studies hiring effectiveness. Google analyzes what predicts employee success by crunching data on interview scores, new hire performance, and retention.

This led Google to refine its process over time – e.g., as mentioned in our time to hire best practice guide. Google discovered brainteaser questions didn’t predict job performance and promptly scrapped them.

Instead, Google moved to structured behavioral interviews that have proven far more predictive of on-the-job success. They also put less weight on pedigree factors like GPA or test scores. Hiring data showed these weren’t strong predictors beyond a certain threshold.

Google’s intense focus on measuring quality has helped them maintain hiring quality even as they grew. They even studied how many interviews are necessary. And found that four interviews often suffice to predict a candidate’s outcome with 86% confidence. Google’s model of having hiring committees and cross-functional interviewers adds consistency – reducing random “bad hires.”

3. Trial Programs and Probationary Periods

Some companies reduce early attrition by ensuring role fit and alignment to cultural attributes before fully committing.

Meta has an engineering Bootcamp program. They expect all new engineers go through a weeks-long Bootcamp training and work on trial projects before picking a team. This not only ramps up their skills (improving productivity) but also lets them and the company assess fit. By the end of Bootcamp, if a new hire isn’t working out, it’s addressed early.

GE used internships and rotational leadership programs to test and develop talent before placing them in permanent roles. This helps to build a pipeline and improve the eventual hire quality and retention.

4. Monitoring Early Performance & Retention Metrics

What gets measured gets managed. Companies track metrics like “90-day attrition” and “first-year attrition” closely. If certain teams or hiring channels show higher new-hire turnover, it’s a red flag to investigate.

Tesla recently faced scrutiny for its high turnover. A 2023 study found that even excluding executives, Tesla’s employee turnover was about 27%. This is much higher than the ~15% industry benchmark for Silicon Valley tech firms. This raised alarms as a potential risk to Tesla’s future if they cannot retain the talent they bring in.

Tesla has an intense, high-pressure culture, which can lead to burnout. Most companies address this with better hiring for organizational fit and better post-hire support.

On the flip side, Uber’s campus hiring strategy boasts an 85% retention rate for university hires (who now form 20% of Uber’s workforce) – indicating that investing in young talent with growth potential has paid off in loyalty.

Onboarding plays a big role here too: A strong onboarding program that integrates and supports new hires can improve retention dramatically – by up to 82% higher retention and over 70% higher productivity, according to industry research.

Companies like Microsoft and Apple put heavy emphasis on onboarding for this reason. Apple reportedly achieves very low first-year attrition by carefully mentoring new employees in Apple’s culture; Microsoft’s inclusive onboarding (e.g. for neurodiverse hires in its Autism Hiring Program) has led to excellent retention of those employees over the years.

5. Alignment on “Culture Add” vs “Culture Fit”

Quality is not just technical skill – it’s also how well a person fits or enhances the company’s culture and values. Each of these leading companies has a strong identity, and they actively screen for it.

Apple is known to prioritize cultural fit and values alignment as much as competencies. Managers pose scenario questions to see how candidates approach problems in ways that align with Apple’s principles of innovation, collaboration, and creativity.

Apple believes a hire who meshes with their culture will be more engaged and successful long-term.

Similarly, Amazon’s Leadership Principles (customer obsession, ownership, etc.) are used as interview rubrics – candidates are evaluated against them to ensure a strong fit which often translates to better performance and retention.

Google even coined “Googleyness” as a trait – indicating a person’s comfort with ambiguity, bias for action, and collaborative nature – which they consider when hiring.

By selecting not just for skills but for these cultural factors, companies improve the chances that new hires will thrive and stay.

Notably, some companies like Microsoft also say “culture add” – seeking people who bring diverse new perspectives while embracing core values, rather than all hiring the same prototype. This concept encourages principles of inclusive hiring).