How to measure and improve quality of hire
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Quality of hire is one of the most talked-about recruiting metrics (and one of the hardest to pin down). While many talent acquisition (TA) teams still default to tracking time-to-fill or cost-per-hire, those metrics only tell you how fast and cheap your process is. They don’t tell you whether the people you’re hiring are actually any good.
That’s a problem. According to the U.S. Department of Labor, a bad hire can cost at least 30% of the employee’s first-year earnings. The Society for Human Resource Management (SHRM) puts the full cost of replacing an employee even higher — anywhere from one-half to two times their annual salary. For specialized roles like AI engineers, where salaries already carry a 28% premium over traditional tech positions, the math gets painful fast.
The good news is you don’t need a perfect formula to start measuring and improving the quality of the people you hire. Here’s how to do it.
What is quality of hire?
Quality of hire (QoH) is a recruiting metric that evaluates the value a new employee brings to your organization after they’ve started the job. It looks beyond the hiring process itself and asks: did this person actually perform well, contribute to team goals, and stick around?
Unlike efficiency metrics such as time-to-fill or cost-per-hire, quality of hire focuses on outcomes. It’s forward-looking; measuring what happens after the offer letter is signed, not just how quickly or cheaply you got there.
That’s exactly why it’s so valued. In LinkedIn’s Future of Recruiting report, TA professionals named quality of hire as the single most valuable recruiting metric. But here’s the catch: only 25% of organizations feel confident they’re measuring it effectively. The gap between knowing it matters and actually tracking it is where most companies stall.
How to measure quality of hire
There’s no universal formula for quality of hire, and that’s by design. The “right” way to measure it depends on what “quality” means for your specific roles, teams, and business goals. That said, there’s a solid framework you can start with.
Choose your indicators
Most organizations measure quality of hire by combining several post-hire indicators. According to LinkedIn, the most common ones are job performance ratings (used by 66% of TA professionals), new hire retention (60%), and hiring manager satisfaction (44%).
Common indicators include job performance ratings, new hire retention rate, hiring manager satisfaction, time to productivity, and cultural contribution. The best approach combines several of these to get a well-rounded view.
Build a quality of hire formula
Once you’ve selected your indicators, calculate a QoH score using a simple average:
QoH = (Indicator 1 score + Indicator 2 score + Indicator 3 score) / Number of indicators
The specific numbers matter less than the consistency. Use the same formula across roles, departments, and time periods so you can compare apples to apples.
Set a baseline and track over time
Quality of hire is most useful as a trend, not a one-time snapshot. Start by calculating your current QoH scores, then track them quarterly or after each cohort of new hires. Over time, you’ll spot patterns like which sources produce your strongest hires, which roles have the most mis-hires, and which parts of your process need attention.
Organizations that take this seriously see real results. Companies that master quality of hire measurement report 30% better overall business performance compared to those relying on traditional hiring approaches.
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