What is Quality of Hire?
Definition: Quality of Hire (QoH) is a recruiting metric measuring the value and performance of new employees, typically through a composite of performance ratings, retention, time-to-productivity, and stakeholder satisfaction.
Also known as: QoH, Hiring Quality, New Hire Quality, Placement Quality
Quick Summary
TL;DRQuality of Hire (QoH) measures the value new employees bring to an organization. Unlike activity metrics (time-to-fill, cost-per-hire), QoH focuses on outcomes: performance, retention, and impact. It's considered the most important recruiting metric, though also the hardest to measure consistently.
Key Facts
What It Measures
New hire value and performance
Metric definition
Common Components
Performance, retention, time-to-productivity
Industry practice
Importance
Most valuable recruiting metric
LinkedIn research
Challenge
Difficult to measure consistently
Industry observation
Why Quality of Hire Matters
Activity metrics (how fast, how cheap) don't capture what matters most: did you hire good people? A fast, cheap hire who underperforms or leaves quickly is worse than a slower, more expensive quality hire. QoH connects recruiting to business outcomes, justifies investment in better processes, and identifies what actually works in hiring.
Common Pain Points
- 1Optimizing speed and cost without measuring outcomes
- 2No connection between recruiting metrics and business results
- 3Unable to identify which sources produce best hires
- 4Difficulty justifying recruiting investments
How to Measure Quality of Hire
Build a composite measurement approach combining multiple indicators.
- 1
Select Components
Common QoH components: performance ratings, retention/turnover, hiring manager satisfaction, time-to-productivity, promotion rates, and goal achievement.
- 2
Establish Baselines
Measure current state for each component. What's average performance at 6 months? 12 months? What's typical new hire retention rate?
- 3
Weight and Combine
Create a weighted composite score. Example: Performance Rating (40%) + Retention (30%) + Time-to-Productivity (20%) + Manager Satisfaction (10%).
- 4
Analyze by Source
Track QoH by source, recruiter, hiring manager, and role. Identify what produces quality hires and invest accordingly.
Result
Consistent measurement over time reveals patterns that improve hiring decisions.
Quality of Hire Deep Dive
Common QoH Components
Organizations use various indicators to assess new hire quality. Performance reviews are most common but delayed. Retention correlates with quality but has other causes. Manager satisfaction provides early signal. Time-to-productivity measures ramp speed. Goal achievement tracks objective outcomes.
QoH Formula Example
Common formula: QoH = (Job Performance + Ramp Time + Engagement + Cultural Fit) / 4. Each component scored 1-100. Job Performance from reviews. Ramp Time inverse of time-to-productivity. Engagement from surveys. Cultural Fit from manager assessment. Customize based on what matters to your organization.
Staffing Agency Quality Metrics
For staffing agencies, quality of hire includes: assignment completion rate, client satisfaction scores, extension rates, conversion-to-permanent rates, and redeployment rates. These indicators show whether placed candidates succeed and whether clients are satisfied with placements.
Common Misconceptions
- QoH can be measured with a single metric
- Performance reviews alone capture quality
- QoH should be measured immediately after hire
- All organizations should use the same QoH formula
Activity vs Outcome Metrics
| Metric Type | Examples | What It Tells You |
|---|---|---|
| Activity | Time-to-fill, Applications received | Process speed |
| Efficiency | Cost-per-hire, Source yield | Resource usage |
| Quality | QoH, Retention, Performance | Actual results |
| Business Impact | Revenue per employee, Productivity | Bottom line |
Why QoH matters most
Related Terms
Frequently Asked Questions
Related Resources
Improve Your Placement Quality
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