Quality of Hire

How it works

Quality of hire is a measure of how well a new hire actually performs and stays with the company, usually tracked through some combination of manager performance ratings, time to ramp up to full productivity, and retention at 90 days or one year.

Unlike time to fill or cost per hire, there's no single industry-standard formula — most teams build a composite score from whatever signals they can reliably measure. A common approach: pick 2-4 indicators (say, 90-day retention, a manager satisfaction rating out of 5, and time to reach full productivity), weight them, and track the composite per cohort of new hires rather than per individual, since any one hire is a small sample. The specific indicators chosen should reflect what actually predicts success in the role — a sales role might weight ramp-to-quota time heavily, while a high-turnover hourly role might weight 90-day retention almost exclusively.

In staffing & high-volume hiring

For a staffing agency or high-volume hiring team, quality of hire is tracked at all specifically because a fast, cheap hiring process that produces poor-fit hires isn't actually saving anything once replacement costs — sourcing again, re-onboarding, a client relationship strained by a bad placement — are counted. It's the metric that keeps speed and cost from becoming the only things a hiring process optimizes for.

Common mistakes

• Judging quality of hire from a single new hire's outcome rather than a cohort trend — individual results are too noisy to draw conclusions from on their own.
• Picking indicators that are easy to measure rather than the ones that actually predict success in the specific role being hired for.
• Never revisiting the chosen indicators against real, later performance data to confirm they're actually correlated with success.