What is quality of hire, and how to measure it

Companies track cost per hire and time to hire down to the decimal. Far fewer can say whether those hires actually worked out. Quality of hire is the metric that answers that question, and it is widely considered the most important, and the hardest to measure, in recruiting.

This guide explains what quality of hire is, why it matters, and how to measure it, including at high volume. It draws on insights from Daniel Ash, co-founder and CEO of Journeyfront, an assessment and applicant tracking platform for large-scale hiring, shared on the Outsource Accelerator Podcast.

What is the quality of hire?

Quality of hire is a measure of the value a new employee brings to an organisation, judged mainly by their job performance and how long they stay. Put simply, it tells you whether a hire was a good decision.

Unlike cost per hire and time to hire, which only measure the recruiting process, quality of hire measures the outcome. That is why SHRM and most talent leaders rank it as the top recruiting metric, even though it is hard to pin down.

It is a lagging indicator, so you cannot fully judge a hire on day one. You only know once they have performed in the role.

Why quality of hire matters

A single bad hire is expensive. You pay to recruit and train the person, lose productivity while they ramp up, and then pay again to replace them if they leave. In customer-facing and high-volume operations, that cost multiplies across hundreds or thousands of seats.

Daniel frames the stakes plainly.

“You live with the consequences of that decision… you see both of these types of organizations deal with often high turnover in the first 90 days of a hire’s time at that company, which can be incredibly expensive.”

The churn is also front-loaded, so the damage lands fast.

“Sometimes you’ll see only 50% of those hires making it past 90 days.”

Every one of those departures resets the cost clock. As a result, improving quality of hire even slightly compounds into large savings and better customer service over time.

How to measure quality of hire

Quality of hire is not captured at the offer stage. Instead, it is assembled from post-hire data and expressed as a score. A common formula, used by HR analysts such as AIHR, averages the key inputs on a percentage scale:

Quality of hire = (performance score + retention score + hiring-manager satisfaction score) / number of indicators

To put that into practice, follow four steps:

1. Define what “good” looks like for the role

First, agree what success means for the specific role. Set the performance and retention markers that matter, and get hiring managers and operations to sign off. Without a shared definition, every later number gets argued over.

2. Track retention and performance after the hire

Next, follow each hire well past their start date. Measure who stays, who leaves, and how they perform against real KPIs. That post-hire data is what separates a genuinely good hire from one that merely looked good on paper.

“We have all sorts of data on those hires themselves to determine what was it that differentiated those that made it versus those that didn’t.”

3. Feed those outcomes back into screening

Then close the loop. Send the results back into your screening so the process learns what actually predicts success. This is the step most companies skip, and it is where measurement turns into improvement.

“Our system has this automated feedback loop built into it where we will ingest a company’s post-hire data… our system learns for every individual client what’s predicting performance and retention… more and more accurate over time.”

4. Combine the inputs into a single score

Finally, roll the inputs into one trackable number. Score each hire, then average across a cohort to see whether quality is rising or falling. The exact weighting matters less than applying it consistently.

Common quality-of-hire metrics to track

The right inputs depend on the role, but most quality-of-hire scores draw on a few core metrics:

• New-hire retention: Still employed at 90 days and at one year
• Job performance: Ratings or KPIs at 6 and 12 months
• Ramp time: How quickly a hire reaches full productivity
• Hiring-manager satisfaction: A simple post-hire rating
• Cultural or values fit: Often gathered through 360 feedback

Agree on this shortlist with stakeholders before you start, so the score means the same thing to everyone.

Where AI fits in measuring quality of hire

AI is reshaping how quality of hire is measured, and Daniel argues it raises the stakes rather than lowering them. As routine work gets automated, the human work that remains gets harder, so hiring the right people matters more.

“As AI is automating more of the simple stuff, that performance is gonna matter even more, because the stuff that humans are gonna be doing is more complicated.”

Used well, AI scores resumes and interviews and spots patterns across millions of applicants that humans would miss.

However, it also carries real risks, including bias and opaque decisions that are hard to defend. The guardrails are transparency and human control, and Daniel builds his platform’s AI to be checkable and reversible.

“We’ve tried to build it in such a way that it is auditable… you have the ability to view the scores with the explanations and audit them… you have the ability to override the scores when needed.”

That is quickly becoming a legal requirement, not just good practice. The EU AI Act will require a human override for hiring AI, and frameworks like the NIST AI Risk Management Framework treat human oversight as a core control.

So the practical rule is simple: let AI measure and predict, but keep a person accountable at the decision point.

Key takeaways

• Quality of hire measures whether a hire performs and stays, not how cheap or fast the hire was.
• It is a post-hire, multi-input metric, so you need a feedback loop from outcomes back into screening.
• Define success per role, agree the inputs, and track retention and performance over time.
• Use AI to measure and predict, but keep it auditable and human-overridable.

Improve your quality of hire with Journeyfront

Journeyfront is the applicant tracking and assessment platform built specifically for BPO and high-volume hiring. It combines automated screening, job simulations, and predictive assessments to help contact centres fill hiring classes faster and with far better retention, so more of your hires are the right ones. Learn more at journeyfront.com/bpo.