Why Measure Quality of Hire? So Much More Than a Metric

This post about quality of hire was first published in January 2016 and updated in December 2024 with new information.

You do everything you can to attract and hire employees who mesh with and add to company culture, do great work, and stay loyal for years. Despite your best efforts, not every hiring decision you’ll make will be the right one — that is, unless you’ve been measuring quality of hire (QoH).

54% of recruiters say QoH is the number one topic shaping their field over the next five years, according to LinkedIn’s 2024 Future of Recruiting Report. With most organizations adding new employees at a slower pace today compared to the past few years, hiring the right people is more important than ever. 

But what is quality of hire, and how do you measure it? We’ll help you find the answers to these questions and then offer some tips about the best tools for tracking this essential HR metric. 

📊 Retention rates, engagement scores, and predictive analytics—Oh my! Modern metrics to redefine your Quality of Hire in 2024 await here. 🔍👩‍💻

How Do You Define Quality of Hire?

Quality of hire is a term that refers to the value an employee, particularly new hires, brings to your organization. But how do you measure that value? QoH is not the easiest metric to start tracking. That’s because it’s not just one simple metric — rather, it’s a combination of metrics that might differ from one organization to the next. 

Once upon a time, we relied on basic statistics, like time-to-hire and average retention, to indicate effective or ineffective hiring strategies. Today, we understand that there are a wide range of factors that contribute to good hiring decisions and successful employees. Fortunately, thanks to technology, we can track vast amounts of data about our hiring practices and employees’ job performance. 

Talent analytics technology also interprets all that data for us, producing reports and visualizations that make the raw data far more digestible for everyone. With advanced talent analytics, we can more deeply understand the nuances of what makes a good employee and how to find and hire those employees. 

New Metrics to Measure Quality of Hire

As we mentioned, HR and talent acquisition teams are no longer relying on simple metrics to measure quality of hire. Technology enables us to take a more sophisticated approach, taking many other factors into account so we can get a complete picture of QoH — and improve the quality of our hiring decisions. 

To help you define quality of hire, we put together a list of 18 metrics that indicate both the quality of your team’s processes and the value your new hires create. Answer the questions to determine how your recruiting strategies might be helping — or harming — your company’s QoH:

1. Application Completion Rate: Is your application easy to complete, or is it too long? Does it ask the right questions? Do the questions in your application match the job description?
2. Candidates per Hire: Did you have just one clear standout candidate, or was it hard to choose from a qualified, engaged talent pool?
3. Source Quality: Do you have reliable, high-quality candidate sources, or are you pulling from a hodgepodge mixture of hit-or-miss sources?
4. Pre-Hire Assessment Scores: Do high assessment scores correlate with high performance review scores, low turnover rates, high engagement, or other indicators of success? If not, are your pre-hire assessments as effective as they could be?
5. Candidate Experience Scores: How did new hires score their candidate experience? How did those compare to other top candidates’ who weren’t chosen?
6. Referral-to-Hire Ratio: Are you making consistent, high-quality hires from your employee referral program? If not, is it properly advertised and incentivized?
7. Offer Acceptance Rate: Do your first-choice candidates typically accept job offers from your organization?
8. Diversity of Candidate Pipeline: Are you starting your search for the best-fit employee with a diverse candidate pipeline?
9. Passive Candidate Conversion Rate: How often do you engage passive candidates and get them to apply? How often are they hired?
10. New Hire Performance Ratings: Do new hires tend to earn high scores for their initial performance reviews, or are they less predictable?
11. New Hire Retention Rate: Do your new hires tend to quit more or less frequently than the average for your industry?
12. Absenteeism: How does absenteeism correlate with employees’ performance review scores, engagement levels, and other factors?
13. Ramp-Up Time: Do new hires tend to achieve their goals on target during onboarding? Does faster ramp time correlate with higher performance or retention later on?
14. Time-to-Productivity: How quickly do new hires reach full productivity, on average?
15. Hiring Manager Satisfaction: How do hiring managers rate the success of their new hires?
16. Employee Engagement: Are new hires engaged immediately post-hire? How does that compare to engagement during year one, year two, etc.?
17. Cost-per-Hire for Quality Hires: What does it really cost to make a great hire? Are you spending too much — or too little?
18. Quality of Hire Index: The QoH Index combines new hire retention, new hire performance ratings, and hiring manager satisfaction for a quick-hit, overall quality of hire score.

When you use these modern metrics and technology, you can go beyond surface-level hiring assessments. You gain a deeper understanding of the true value a new employee brings and how your own processes impact QoH.  

The key is to view QoH as dynamic and multi-faceted. It’s a reflection of individuals’ achievements and the success of the business. Strike the right balance between numbers and narrative to build solid talent pipelines, attract lots of applicants who’d be a good fit, and make the best possible hiring choices.

Quality of Hire: A Metric and a Philosophy

It’s undoubtedly important to understand the numbers that determine QoH to achieve hiring success. But maximum success comes from shifting your mindset to understand QoH as a philosophy that guides company growth. Make it part of your recruiting team’s culture, and QoH can enable more strategic, data-driven decisions, foster collaboration, and align business goals with workforce success.

When you see QoH as a mindset that enables growth, you view each new hire as a piece of the puzzle of your organization’s success. Instead of focusing on hiring quickly or cutting costs, you make hiring choices with the big picture in mind. You’re not hiring just to fill roles but pursuing top talent strategically to help your company grow. This hiring mindset is mutually beneficial, too, giving employees opportunities to grow their skills and advance in their careers.

🌐 What does “quality” mean for your organization? Skills? Values? Long-term growth? Define YOUR #QualityOfHire goals and build for success. 🧩✨ 

The Power of Collaboration for QoH

One of the biggest barriers to making QoH part of your hiring philosophy is siloed decision-making. Recruitment teams typically source candidates and assess them against job requirements. But hiring decisions aren’t made in a vacuum — they have an impact across teams and departments and affect productivity, morale, and performance.

You need collaboration between recruitment teams, hiring managers, and department leaders to truly adopt QoH as a mindset. Each group has essential expertise:

• Recruiters understand the market landscape and are skilled at evaluating candidates’ qualifications and potential.
• Hiring managers understand what’s expected for each role and the traits and competencies that contribute to team success.
• Department leaders connect hiring impact to broader strategic goals to ensure that chosen candidates align with company mission and vision.

When these groups work together, you create a stronger hiring ecosystem. In it, hiring is intentional and hiring decisions are aligned with what the role requires and what the organization needs. 

Go beyond transactional hiring processes and build a sustainable framework for growth. When everyone — recruiters, leaders, and teams — embraces this mindset, the result is not just better hires but a better organization. After all, a high-quality workforce doesn’t just meet expectations — it redefines what’s possible.

ClearInsights: Your Talent Analytics Sidekick for High-Quality Hiring

You need a powerful partner to stay on top of QoH, hone your recruiting process, and make confident choices about who to hire. With ClearInsights from ClearCompany, you’ve got it. 

Your trusted talent analytics sidekick, AI-powered ClearInsights can reveal truths about the quality of your new hires with just a few clicks. Here’s how:

1. Ask questions about new hires or your hiring process in natural language. For example, “How many new hires onboarded in January 2023 were still with the company in January 2024?” or “What was the average performance review score for new sales reps on their 90-day reviews?” 
2. ClearInsights produces reports and data visualizations that show an 85% retention rate for new hires during that period or an average review score of 3/5 for new sales reps. 
3. Dig even deeper with ClearInsights to find out what drove that high retention rate or what’s impacting new sales reps’ performance. High retention could be correlated with a period where time-to-hire was low, indicating that when your company’s hiring process is faster, you’re more likely to snag top talent. You might also discover those lower-than-average performance review scores were likely the result of a holiday that fell during the onboarding process. 
4. Now that you more deeply understand what increases the chances your team will make good hires, you can adjust your recruiting strategy. Set goals to cut down time-to-hire so you can win and keep top talent and avoid overlapping onboarding programs with big holidays or hectic events. 

There’s so much to discover about your talent data. See what you’re missing with ClearInsights — talk to a ClearCompany expert today.