Measuring Quality of Hire


by vested

As a tech enabled recruiting service, we’ve worked with many companies who previously had problems with high employee turnover. Their issues often stem from their inability to measure their quality of hire.

They would have a dedicated human resources team who would use a candidate sourcing game plan. They would get hundreds of resumes from Glassdoor, LinkedIn and Indeed.

They would bring these candidates in with pristine backgrounds, yet in less than a year, these companies would be back posting the same role on job boards.

After wasting thousands of dollars on job advertising or recruiting fees, the real issue is their inability to track the quality of their hires. If they had a good system in place, then they would now what candidates to target and who will stick around for more than a year.

What is quality of hire?

Quality of hire is a recruiting metric to assess the value of a new hire. It tracks how much added value a new hire adds to an organization’s long-term success. It’s clear why this is the most important metric for many business owners. If employees are the life blood of a business, then measuring quality of hire is of utmost importance to many business leaders.

We can now agree that all businesses should have a process in place to measure their quality of hires. But how exactly do you do it?

At Vested, we’ve gathered best practices on how you can get started on measuring quality of hire.

You can also CONTACT US to discuss your hiring needs and challenges.

How to Measure Quality of Hire

Track Candidate Metrics

Measuring your new hires starts before they even sign the dotted line. You’ll need to get base data points during the interview and candidate assessment process. By having a candidate assessment structure in place, you can see what type of candidates will stick around and who are the ones most likely to leave in less than a year.

You can start by measuring qualitative metrics:

  • How many years of experience in the industry
  • Source of the candidate referral (job board vs. an agency)
  • Grading overall interview performance
  • Leadership positions held in the past
  • Educational background
  • Number of offers considered by candidate
  • Passive versus actively looking (for a job) prior to hire
  • Did candidate work for competitor prior to hire

This is not an exhaustive list. Many more qualitative factors can be measured, and it can depend on industry.

You can also measure quantitative metrics:

  • Case Study performance
  • Standardized test scores (i.e. SAT, GMAT)
  • Grades from undergraduate and graduate courses
  • Time to Hire

Again, this list of quantitative factors is not exhaustive. It can vary from industry to industry.

Track New Hire Performance

Once the candidate has been hired, then a business can further evaluate the performance of the new hire.

It can start with performance reviews in the first year. This can be done quarterly to track how a candidate has been assimilated into the company.

The only drawback is performance reviews (so early in the new hire’s career in the company) can be misleading, as there could not be sufficient data points to make a concrete conclusion.

Moreover, his or her new boss could be hard to please, so any assessments could be biased.

Alternatively, quantitative measures can be used to measure the performance of new hires. This can be done the following ways:

  • Performance on any industry testing requirements (i.e. SEC required licenses, bar exam)
  • Performance in any classroom courses as part of job training
  • Track productivity (i.e Six Sigma)

Many more measurements can be added. It will depend from industry to industry.

Track Retention

This metric sounds obvious but many companies still fail to simply track how many new hires stick around for at least a year.

It’s a key metric because the longer an employee stays employed at the company then the more they have provided added value to the organization.

A new hire could have all the degrees and decades of experience, but if he or she is not motivated to stick around, then a business could have wasted thousands of dollars in recruiting fees.

A poor retention metric can also be an indicator of something wrong with the organization. Perhaps a company is bringing in top talent, but they leave because the culture is toxic. This can be identified based on employee feedback from their exit interview.

To track retention, a business can look to turnover rates for various roles in the organization. This can be further subdivided in various categories:

  • By region
  • Full time versus part time
  • By product or service line
  • By pay grade

By tracking retention, an organization can pin point the problem area (is it the new hire or is it due to company culture?). Then it can be addressed properly and solutions can be put into place.

Track Hiring Manager Satisfaction

Hiring managers are the ones who post job openings in the first place. They have a need to fill in their teams, and they ask the HR team for help. It’s important to track how well an HR team works with hiring managers.

The best way to assess the health of this dynamic is through surveys. After a few months, a hiring manager could be asked to fill out a satisfaction survey. The hiring manager can then provide feedback on the process and also file any grievances he or she may have about the process.

This can even be tracked quantitatively. The survey can be designed to provide number of stars or a rating between 1 to 10.

Hiring manager satisfaction is a useful indicator to assess how your HR department works with the various divisions in your company. The only drawback is the lack of subjectivity. It’s not the ultimate way to track new hire performance, but it can be a piece to building a proper tracking system for new hire quality.


Every organization with many employees should have a process in place to track the quality of hires. Employees are the life blood of any organization. If you want your organization to thrive in the long run, make sure you’re hiring the right people and have the right company culture to nurture their growth.

This can only be achieved by having a robust process to track quality of hires.

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