How Quality of Hire Helps or Hurts a Business (+Examples)

Quality of hire is a hot topic for every business. Whether you’re a talent acquisition leader in charge of your department’s recruitment strategy, or an agency recruiter forwarding job candidates to client organizations, you’ll want to have the highest-quality candidates possible.

But why does quality of hire matter for an organization? How does overall candidate quality help or hurt businesses? Let’s take a look at some quality of hire examples to see how quality factors into business outcomes.

Defining “Quality of Hire” for Your Business

At its core, the simple definition of quality of hire (QoH) is the value that a new hire brings to the organization over time. The challenge is defining “value” for your business. Is it just the amount of work the employee completes? How long they stay? Their ability to complete work without error? How much money or how many customers they bring into the organization?

These are all important metrics for quality of hire, but QoH is more than just an individual employee’s contributions to workplace productivity goals. It also encompasses the employee’s ability to mesh well with the workplace culture and adhere to the organization’s values. Why? Because these cultural aspects of quality of hire can affect the productivity of others in the organization, employee retention rates, and the organization’s reputation.

But, how does quality of hire impact a business? Here are some examples of how high (and low) quality of hire can impact a business.

Quality of Hire Examples: How Low-Quality Hires Hurt Businesses

Low quality of hire can be extremely damaging to a company’s workplace culture, reputation, and bottom line. Every month, we see news headlines showing how just a few (or even one, in the case of executive positions) low-quality hires lead to scandals that hurt a business.

Some examples include:

Activision Blizzard’s $35 Million Settlement

Activision Blizzard made headlines all through 2022 and early 2023. Unfortunately, many of these headlines were about misconduct allegations in the organization. In February of 2023, Forbes published a story highlighting how the company agreed to pay a $35 million settlement over “charges that claim the video game giant did not have adequate measures to assess workplace misconduct reports and violated a whistleblower protection rule” and that the company “agreed to pay the Equal Employment and Opportunity Commission $18 million in 2022 to compensate former employees who faced sexual harassment and discrimination.”

The lack of action on complaints about sexual harassment and discrimination, plus the retaliation indicated in the lawsuits against the company, was incredibly damaging to the company’s reputation. Workplace misconduct is strongly linked to low overall quality of hire in an organization—and especially when those hires are given positions of power and authority.

Just in the settlements listed here, low-quality hires cost Activision Blizzard a total of $53 million ($35 million + $18 million) in two years—which doesn’t take into account money lost to reduced productivity, heightened turnover, and other impacts of low-quality hires.

Balfour Beatty Sexual Harassment Lawsuit

According to a September 6, 2023 Equal Employment and Opportunity Commission (EEOC) press release, a highway construction company by the name of Balfour Beatty Infrastructure, Inc. reportedly “violated federal law when it subjected a female truck driver to severe and pervasive sexual harassment, a hostile environment based on sex, and retaliation.”

The EEOC release alleges that “for over a year, the victim was subjected to harassment by several male coworkers” and that one coworker “sent her sexually explicit text messages.” After raising complaints about the hostile work environment, the victim was “transferred to an undesirable work location while the offending coworkers, and the foreman who failed to stop the abuse, were transferred to the more desirable project.”

An EEOC report titled Building for the Future: Advancing Equal Employment Opportunity in the Construction Industry, highlighted “persistent discrimination, including harassment, in construction creates barriers to building a more inclusive industry at. A time when the unprecedented federal investment in infrastructure is spurring new hiring and expanding opportunities.”

If the allegations are sustained through a trial or result in a settlement, they could have a severe negative impact on the company’s reputation and ability to attract new infrastructure contracts in addition to the court case/settlement costs.

How Improving Quality of Hire Can Help Businesses

After looking at a couple of negative examples of how having a few low-quality hires in the wrong positions (particularly those of high responsibility and authority in the organization), what about the positive effects of focusing on high-quality hires? Are there examples of how a good acquisition or having good candidate screening processes in place to improve overall quality of hire can benefit a business?

Aside from avoiding the potential costs of a low-quality hire, one company was able to improve its ability to service their own clients by providing enhanced background and online employee screening services.

For example, there’s Creative Services, Inc. (CSI), a consumer reporting agency (CRA) that specializes in providing background screening and security consulting services to help organizations “hire with confidence.”

CSI partnered with Fama to enhance their background check services with social media and web screening. Kellie O’Shea, Associate General Counsel at CSI, highlighted how Fama helps improve QoH by corroborating interviews with data from an applicant’s social media profile: “I might have a great interview with a prospective employer… then, through tools like Fama, you can see that everything I told you in my interview matches up or is supported by my actions on social media.”

By conducting a thorough background check and comparing what applicants say in interviews against the bulk of their social media activities, organizations can identify applicants who are merely putting on a good face for the interview and those whose personalities will genuinely mesh well with their corporate culture.

Increasing quality of hire through the use of online screening tools can help organizations not only avoid the negative consequences of toxic workplace behaviors, it can:

Streamline recruitment efforts. Frontloading background screening with online background checks and social media screening can help remove low-quality candidates with critical misconduct issues in the final candidate evaluation stage. This means companies can save time and focus on higher-quality hires instead.
Improve employee experience at the workplace. Filtering out bad hires who engage in misconduct helps improve employee experience for everyone in the organization. Employees no longer have to choose whether they will reduce productivity, engage in misconduct themselves, or leave.
Reducing costs and improving productivity. In addition to protecting the overall employee experience in your workplace, removing bad job candidates with misconduct issues can help preserve productivity for your teams. Not only do higher-quality hires have a shorter time-to-value and better productivity than low-quality ones, they also avoid causing issues that bring down the productivity of existing team members.

Implement a Quality of Hire Solution to Improve QoH ASAP

Fama is a trusted solution for helping companies in all industries improve their quality of hire through online and social media screening. With Fama, talent acquisition teams can get reports about their job candidates that meet Fair Credit Reporting Act (FCRA) and Equal Employment Opportunity Commission (EEOC) guidelines by sifting out protected class information.

Are you ready to improve your quality of hire with online and background screening? Reach out to Fama to get started.