The Recruiting Industry Measures the Wrong Things

The recruiting industry measures itself by time-to-fill and cost-per-hire. Those are the two metrics you see in every recruiting report, every recruiter's proposal, every vendor comparison.

Both metrics are vanity metrics. They measure recruiter efficiency, not company success.

A recruiter can minimize time-to-fill by lowering hiring standards. A recruiter can minimize cost-per-hire by taking a lower commission or finding candidates cheaper. Neither of those things leads to better hires for you.

The only metric that actually tells you if your recruiting process works is first-year retention. Not average tenure. First-year retention. The percentage of people you hire in year one who are still in their role at the end of year one.

If 80% of your hires leave in the first year, your recruiting process is broken. No matter how fast you filled roles or how cheaply you filled them. The process doesn't work.

The True Cost of Early Departure

Let's do the math on what a hire who leaves in 10 months actually costs:

Direct costs:

  • Recruiting cost: Let's say $15,000 (for an embedded recruiter, a retained firm, or contingency)
  • Onboarding and training: $5,000-$10,000
  • Salary for 10 months: $80,000 for a mid-level hire
  • Benefits and taxes: ~30% of salary = $24,000
  • Severance or unused vacation payout: $5,000

Total direct cost: ~$130,000

Indirect costs:

  • Hiring manager time (roughly 20% of their time for 4 months): $15,000-$20,000
  • Onboarding time from existing team members: $10,000-$15,000
  • Lost productivity during ramp period (takes roughly 6-9 months to fully ramp): $30,000-$50,000
  • Vacancy period while recruiting replacement: $20,000-$30,000
  • Impact on team morale when a good person leaves: hard to quantify but real

Total indirect cost: ~$75,000-$115,000

Total cost: $205,000-$245,000

A hire who leaves in 10 months costs you 2.5x-3x their annual salary. Not their recruiting cost. Their full salary multiple.

Which means recruiting is one of the highest ROI investments your company makes—if you do it right. And one of the highest cost drains—if you do it wrong.

Why Most Firms Don't Track Retention (and Should Be Ashamed)

Most recruiting firms don't track first-year retention because if they did, their practices would be exposed as broken.

A typical contingency recruiting firm might have 60-70% first-year retention. That means 30-40% of their placements don't last a year. But they don't tell clients that. They don't measure it. They move on to the next placement.

A retained recruiting firm might be slightly better (maybe 75-80%), but they're still losing 20-25% in year one. And they're not making it visible because it would indict their process.

We measure and track first-year retention because it's our core metric. When we place someone, we're not done. We stay engaged. We want them to succeed. And if someone leaves in month 8, that's a failure we own.

Our first-year retention rate is 93%. That's not because we're smarter than other recruiters. It's because we're measured by the right metric.

The Three Failure Points That Predict Early Departure

When we analyze early departures (people who leave in the first 12 months), they almost always fall into one of three categories:

Misaligned Expectations During Interview

The job description says the role is 60% hands-on work and 40% management. The candidate thinks it's 40/60. Or the job description says "remote flexibility" and the company culture expects everyone in the office Wednesday-Friday. Or the compensation talks about "bonus upside" but never gets specific about what that actually means.

When there's misalignment between what was discussed in interviews and what the reality is, people leave. Often quickly. Because they feel misled (even if unintentionally).

How we prevent this:

  • Structured interview process that covers expectations explicitly (not just the job, but the working environment, the team dynamics, the real deal)
  • Multiple conversations with people at different levels (so candidate hears consistent story from manager and IC, from leadership and peer)
  • Job description that reflects reality, not aspirational role description
  • Written offer that's crystal clear on what's guaranteed and what's conditional

Poor Onboarding

A new hire's first 90 days set the tone for whether they stay. Poor onboarding in that window creates early departure risk.

Poor onboarding looks like:

  • Unclear expectations (what does success look like?)
  • No structured plan for first 30/60/90 days
  • Manager is too busy to actually onboard (they hired someone but don't have time to integrate them)
  • New hire doesn't feel connected to team or mission
  • Early projects set them up to fail (they're given impossible tasks before they're ramped)

How we prevent this:

  • Structured onboarding plan we co-design with the hiring manager
  • Regular check-ins (weekly for first month, bi-weekly for months 2-3)
  • Clear success metrics for first 30/60/90 days
  • Early project selection that lets the new hire succeed and learn simultaneously
  • Peer connection facilitation (we help ensure new hire meets people and builds relationships)

Manager-Hire Chemistry

The person is great. The job is right. But the manager and the new hire don't work well together. Maybe the manager's communication style is misaligned. Maybe they have different expectations about autonomy. Maybe the new hire needs more feedback than the manager gives, or less.

This becomes apparent in months 2-4. And if not addressed, it creates early departure.

How we prevent this:

  • Interview process that surfaces working style and communication preferences from both manager and candidate
  • Intentional pairing (we don't just check "manager needs this skill," we check "will this manager and this person work well together")
  • Early feedback loops (if there's friction, we surface it early and help manager and hire navigate it)
  • Manager coaching on how to support this specific new hire

How 93% First-Year Retention Is Achieved

It's not magic. It's methodology. And it's obsessive attention to the three failure points above.

Our process:

Discovery phase: We spend 4-6 weeks understanding the role, the team, the org culture, and the working environment. Not just the job description. The actual job. We talk to the hiring manager, their peers, people who've worked with them before, people who've failed in this role in the past (what went wrong?). We build a really clear picture of who will succeed.

Sourcing phase: We're looking for people who've succeeded in similar environments. Not just people who have the right skills, but people who have the right operating model experience and temperament for this specific environment.

Interview design: We work with the hiring team to design an interview process that actually reveals fit. Not just credentials. Fit. And we coach the hiring team on what to look for and how to interpret signals.

Offer and negotiation: We ensure clarity. No surprises. Both sides are crystal clear on what they're agreeing to.

Onboarding: We co-design an onboarding plan. Then we stay engaged during the critical first 90 days with regular check-ins. We're not a vendor who hands off and disappears. We're invested in success.

Months 4-12: We do quarterly check-ins. If there's friction, we hear about it and help navigate it. If early-career coaching is needed, we facilitate. If the fit is breaking down, we surface it early and work through options (coaching, role adjustment, or in rare cases, separation).

Why a 15-Month Guarantee Forces the Right Behaviors

We offer a 15-month satisfaction guarantee. If someone leaves or doesn't work out in that timeframe (for fit reasons, not performance reasons), we replace them. We own the outcome.

This guarantee forces us to do all the things above. Because we can't afford to place someone and have them leave in month 8. We'd have to recruit and onboard their replacement on our dime.

That guarantee is the forcing function that makes the entire process right. It's why our first-year retention is 93% instead of 70%. It aligns our incentives with yours completely.

What First-Year Retention Actually Tells You

When you're evaluating a recruiting partner (or your own internal recruiting function), ask for first-year retention data. If they won't share it, that's your answer.

The firms that track and share retention data are the ones that are optimizing for your success, not their own ease. The firms that don't track it are the ones that don't want you to know how often their placements fail.

First-year retention is the real report card on whether recruiting is working. Not speed. Not cost. Retention.

Measure it. Track it. Make it the center of your recruiting process. Because it's the only metric that actually correlates with hiring success.