How to measure quality of hire
Pick a few indicators you already track and score each new hire on them after six or twelve months:
- Performance: the new hire's first review rating, as a percentage of the top rating.
- Retention: whether they are still with the company after a year.
- Time to productivity: how long they took to reach the output expected of the role.
- Hiring manager satisfaction: the manager's rating of the hire, on a fixed scale.
A simple formula
Quality of hire = (performance score + retention score + manager satisfaction score) ÷ number of indicators, with each score expressed as a percentage.
For example, a hiring cohort whose average first-review rating is 80%, of whom 90% are still employed after a year, and whose managers rate them 85% on average, has a quality of hire of (80 + 90 + 85) ÷ 3 = 85%.
Using it well
Compare quality of hire across sources, roles and recruiters rather than reading it in isolation: if referrals score 88% and a job portal 70%, the budget should follow. Keep the indicators and their weights the same from year to year, or the trend means nothing. And measure it alongside time to hire and cost per hire, because a role filled fast and cheap costs more if the hire leaves within the year.
Quality of Hire in India
Indian recruiters add one indicator that matters more here than in most markets: the joining ratio, the share of accepted offers that join. Notice periods of one to three months give candidates time to take a counter-offer, so a source with strong interview results but many drop-outs scores lower than it looks.
For campus hiring, companies usually measure quality of hire by cohort, a year after the batch joins, comparing colleges and assessment scores with first-year ratings and retention.
Tracking quality of hire by source also shows which consultants and job portals are worth their fees, which matters because agency fees in India are often charged as a percentage of the new hire's annual CTC.
How Zimyo helps
Zimyo's Recruitment software manages hiring from job requisition to offer.
