Are You Measuring Your Return on Hire?


What are your “go to” tools for hiring success? For some companies, the answer is turnover calculations, cost-per-hire and time-to-hire. And these items are very important. But there’s a less known measurement tool that provides valuable information about your new hires: Return on Hire (ROH).

With this measurement, you can identify potential problems in your hiring process – and fix them. As a result, you could potentially reduce the number of new hires leaving your company within the first 90 days.

The Value of ROH

The price tag for replacing a bad hire is two to five times the employee’s salary, according to the Society for Human Resource Management. And this figure doesn’t include the intangible costs of employing an unproductive worker.

Jack Welch, former CEO of General Electric and business expert explained that if an employee’s values don’t fit the organization, even top performers can potentially do a company harm.

ROH establishes qualitative metrics for new hires’ performance and values, allowing you to improve future hiring decisions. After the hire in made, you evaluate if the new hire was a good fit for your organization – and if you would hire them again. These factors allow you to uncover flaws in your hiring process that may be costing your organization valuable dollars.

The ROH Process

Imagine this. You just hired 50 new sales associates. After the first 90 days, you’d answer the following questions about each new hire with the ROH process:

  • On a scale of 1-10, do the employee’s values align with the values of your business?
  • On a scale of 1-10, how is the new hire performing against goals?
  • From the original 50 new hires, how many are still in the position?

After evaluating this information, you can determine if the hiring decisions made 90 days ago fit your company’s culture. Also, you can review sources and process issues of bad hires. For example, are there commonalities in candidate sources, such as hiring managers or processes?

Use these measurements in conjunction with traditional metrics, such as turnover and cost-per-hire to generate a full picture of how your hiring process is really performing.

If you need assistance with locating and hiring top talent, CERS can help! We have the best guarantees and protection in the industry, with coverage up to 5 years. Call or email us today for a free assessment and quote at 561-910-8000.

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