What is new-hire retention?

A cohort is everyone who started in the same window, such as one month or one quarter. You pick a milestone, commonly 90 days, six months or one year, and count how many of the cohort are still employed when they reach it.

Its mirror image is new-hire turnover, the share of the cohort that left inside the window.

It is the fastest feedback loop you have on recruiting quality, job-description accuracy and onboarding, because you get an answer within months rather than years.

Only count people who have reached the milestone. Someone who started three weeks ago cannot be in a 90-day figure yet.

Take an invented company that hired 20 people in the first quarter. At 90 days, 17 of them are still employed.

The 90-day new-hire retention rate is 17 ÷ 20 × 100 = 85%. The 3 who left are the cohort's new-hire turnover: 3 ÷ 20 × 100 = 15%.

• The 90-day mark mostly tests hiring and onboarding: whether the right person was chosen and given a fair start.
• Six months tests the fit with the role and the manager, once the welcome period is over.
• One year tests whether the job turned out to be the one that was described in the interview.

Track at least the 90-day and the one-year figure for every cohort, so an early improvement is not undone later without anyone noticing.

One cohort is a small sample. Compare cohorts over several quarters, and split by role, team and hiring channel. A low rate concentrated in one role often points at a job description that does not match the job. One concentrated in one team points at onboarding or the manager.

• Mixing hires from different start dates into one figure, so some have had a year to leave and some a month.
• Counting people who have not yet reached the milestone.
• Blaming recruiting by default, when onboarding or the manager is the cause.
• Waiting for the annual turnover figures instead of reading the 90-day number as soon as it exists.