Source of Hire
Also known as Hiring Source Mix, Channel Effectiveness
Source of hire records which channel produced each hire — job board, referral, agency, direct sourcing, careers site or internal move — usually reported as a percentage mix. It is the basis for every recruiting budget decision, and it is most useful when combined with cost and retention data per channel.
Formula
Source Share (%) = (Hires from that source ÷ Total hires) × 100Report cost per hire and 12-month retention by source alongside the share. Share alone tells you where hires came from, not which channels were worth the money.
Worked example
- Scenario
- 148 hires: 44 referral, 38 direct sourcing, 31 job board, 22 agency, 13 careers site.
- Calculation
- Share by channel, then cost and retention per channel
- Result
- Referral at 30% share with the lowest cost per hire and highest 12-month retention — the clearest case for investment
What good looks like
A healthy mix usually has no single channel above about 40%, since heavy dependence on one source is a risk. Referrals typically show the best combination of cost and retention; agency hires the highest cost. Channel mix should shift with role type rather than being uniform.
Why source of hire matters
Recruiting budget is allocated by channel, and without source data it is allocated by habit. Combining source with cost per hire and first-year retention regularly overturns assumptions — the cheapest channel per hire is often not the cheapest per retained hire, and that distinction is where real savings are.
How to improve it
- 1Attribute source consistently and decide the rule for multi-touch candidates in advance — first touch or last touch, applied uniformly.
- 2Report cost per hire and 12-month retention by channel, not just volume share.
- 3Invest in referral programmes where the data supports it; referrals usually lead on both cost and retention.
- 4Watch for over-concentration. A channel above 40% is a single point of failure in your pipeline.
Common mistakes
- Inconsistent attribution, which makes channel comparison meaningless.
- Reporting volume share without cost and retention, which is the whole point of the analysis.
- Crediting the careers site for candidates who arrived via a job board and then applied directly.
Frequently asked questions
Which source of hire is best?
Referrals usually perform best on the combination that matters — low cost per hire and strong first-year retention. But the right answer is specific to your data, which is exactly why source should always be reported alongside cost and retention rather than as a volume share.
Related metrics
Cost per hire is the total internal and external recruiting spend divided by the number of hires in a period. It is the standard efficiency measure for talent acquisition and the basis for comparing sourcing channels against each other.
Quality of HireQuality of hire is a composite measure of how well new hires perform and how long they stay, typically combining early performance rating, ramp speed, retention and hiring-manager satisfaction. It is the metric that tells you whether recruiting is producing good hires rather than just fast, cheap ones.
New Hire Turnover RateNew hire turnover rate is the percentage of new employees who leave within a defined early window — most often 90 days, six months or one year of joining. It is a hiring and onboarding metric rather than a retention one, because departures this early usually trace back to selection, role clarity or the first-weeks experience.
Recruitment Funnel Conversion RateRecruitment funnel conversion rate is the percentage of candidates progressing from one hiring stage to the next. Read stage by stage it shows exactly where your pipeline narrows, which is what turns a general 'we need more candidates' instinct into a specific fix.
Go deeper
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