How to Measure ROI in Tech Hiring

Measuring ROI in tech hiring helps you understand the value of your recruitment efforts compared to the costs involved. It ensures you’re spending wisely, hiring the right talent, and meeting business needs. Here's how you can do it effectively:

Track Costs: Include all expenses - recruiter salaries, job board fees, onboarding, and even opportunity costs from unfilled roles.
Measure Impact: Assess hires’ contributions, like productivity boosts, revenue growth, or cost savings.
Key Metrics to Watch:
- Cost-per-Hire: Total hiring expenses divided by hires.
- Time-to-Hire: Days from job posting to offer acceptance.
- Quality-of-Hire: Performance, integration, and retention of new employees.
- Turnover Rate: Percentage of employees leaving within a set period.
- Offer Acceptance Rate: Ratio of accepted offers to extended offers.

ROI Formula:
ROI = (Value of Hires – Recruitment Costs) ÷ Recruitment Costs × 100
For example, spending $75,000 to hire developers who generate $300,000 in value results in a 300% ROI.

Using tools like daily.dev Recruiter can improve efficiency by connecting you with engaged candidates, reducing time-to-hire, and boosting offer acceptance rates. Focus on clear communication, targeted outreach, and aligning hiring metrics with business goals to maximize ROI.

The ROI of Effective Recruiting

Key Metrics for Measuring Tech Hiring ROI

Figuring out which metrics to focus on can turn your hiring process from a guessing game into a strategic, data-driven operation. These five metrics are essential for evaluating and improving your tech hiring ROI. Let’s break them down, starting with cost-per-hire.

Cost-per-Hire

Cost-per-hire is all about understanding the total financial investment it takes to bring a new employee on board. It includes everything - recruiter salaries, job board fees, recruitment software, referral bonuses, interview time, background checks, and onboarding costs.

To calculate it, take your total recruitment expenses and divide them by the number of hires during a set period. For instance, if you spent $50,000 on recruitment and hired 10 developers, your cost-per-hire is $5,000.

Don’t forget to factor in both direct and indirect costs. This comprehensive view helps you see where your money is going and where you might be overspending. Modern recruitment platforms can help streamline this process by cutting out unnecessary expenses like unresponsive candidate outreach or drawn-out screening processes. Keeping close tabs on this metric allows you to allocate your budget more effectively and improve ROI.

Time-to-Hire

Time-to-hire measures how many days it takes from posting a job to having a candidate accept your offer. It’s a crucial metric because every day a position remains vacant can mean lost productivity and revenue.

For example, leaving a senior software engineer role unfilled for an extra month could delay product launches, slow down feature updates, or push your existing team into overtime - leading to burnout and higher costs. Using warm introductions and targeting engaged candidates can help cut down on this time significantly.

"The silent killer of recruiting is mismatched expectations with hiring managers." – Nimrod Kramer, daily.dev

Clear communication between recruiters and hiring managers is key to avoiding delays caused by vague job descriptions or shifting requirements. Once you’ve streamlined time-to-hire, the next step is measuring how well your new hires perform using quality-of-hire metrics.

Quality-of-Hire

Quality-of-hire looks at how new employees perform and integrate into your team. It combines factors like performance reviews, time-to-productivity, alignment with company values, and their potential for long-term success.

You can measure this by tracking performance evaluations, monitoring how quickly new hires become productive, and assessing their impact on team dynamics and project outcomes. High-quality hires tend to hit the ground running, earn strong reviews, and contribute to your business goals within their first year.

Setting clear vetting criteria during the hiring process is critical for improving this metric. A high-quality hire doesn’t just fill a vacancy - they drive meaningful growth for your company. Examining retention trends can also help refine your approach to evaluating quality.

Turnover Rate

Turnover rate measures the percentage of employees who leave your company within a given timeframe, typically a year. This is especially costly in tech roles, where specialized skills and lengthy onboarding processes are the norm.

To calculate turnover rate, divide the number of employees who leave by the average number of employees, then multiply by 100. For example, a 20% annual turnover rate means one in five employees leaves each year.

Early departures are particularly damaging. If a developer quits within six months, you lose not only the money spent on hiring and training but also the productivity you were counting on from that role. Engaging senior engineers and passive candidates with personalized opportunities can help you secure hires who are more likely to stay long-term. High retention rates are directly tied to better hiring ROI and smarter candidate selection.

Offer Acceptance Rate

Offer acceptance rate measures how many job offers are accepted compared to how many are extended. This metric reveals a lot about your employer brand, compensation packages, and the overall candidate experience.

A low acceptance rate can signal problems - maybe your offers aren’t competitive, your interview process needs improvement, or candidates are losing interest due to poor communication. Building trust throughout the hiring process can make a big difference. When candidates feel valued, informed, and excited about the opportunity, they’re more likely to say yes.

Transparency about job expectations, workplace culture, and growth opportunities also enhances the candidate experience. Consistent, clear communication builds trust and boosts acceptance rates.

Strong acceptance rates save time and resources because you won’t need to keep cycling through candidates for the same role. When your top-choice candidate accepts, you can move straight to onboarding, speeding up productivity and maximizing your hiring ROI.

How to Calculate ROI: Step-by-Step Guide

Measuring the return on investment (ROI) in tech hiring can be broken down into three straightforward steps.

Calculate Recruitment Costs

Start by tracking every dollar spent in the hiring process. This includes direct costs like job board fees, recruiter salaries, advertising, background checks, referral bonuses, and any platform fees. For example, using a transparent pay-per-job model can help you avoid unexpected charges.

"After that, you only pay per job you're actively hiring on daily.dev - a clear, predictable model with no hidden costs or seat fees."

Don’t forget to account for indirect costs. This means calculating the time hiring managers spend in interviews (multiply their hourly rate by the number of hours spent), HR administrative efforts, and onboarding expenses like equipment and training materials. Additionally, promotional offers - such as earning a $500 ad credit when spending $2,000 - can reduce overall costs.

You should also factor in opportunity costs, such as delays in projects or the need for overtime. Estimating the daily revenue impact of leaving a position unfilled can give you a clearer picture of the hidden costs involved.

Once you’ve totaled these expenses, it’s time to evaluate the impact of your hires.

Determine the Value of Hires

The value of a new hire goes beyond their salary. Consider how they contribute to the bigger picture, such as:

Boosting productivity and speeding up team contributions.
Generating revenue through faster product development or service delivery.
Reducing costs by lowering turnover and minimizing training expenses.
Improving overall team performance and operational efficiency.

To understand their impact, compare key performance metrics from before and after hiring. This will help you quantify the tangible benefits these employees bring to your business.

With these figures in hand, you can now calculate ROI.

Apply the ROI Formula

Use this formula to calculate ROI for tech hiring:

ROI = (Total Value of Hires – Total Cost of Recruitment) / Total Cost of Recruitment × 100

Here’s an example: Say you spend $75,000 to hire five developers over six months. This amount includes platform fees, advertising, hiring manager time, onboarding, and opportunity costs from delayed projects.

If those hires generate $300,000 in measurable business value during their first year - through faster product launches, better team efficiency, and reduced turnover costs - the calculation would look like this:

ROI = ($300,000 – $75,000) / $75,000 × 100 = 300%

This means every dollar spent on recruitment generated $3 in business value.

It’s a good idea to track ROI over different time frames, such as 90 days, six months, and one year. Early returns might be lower due to onboarding, but successful hires should yield greater returns over time. Breaking down ROI by role or hiring source can also help you align recruitment strategies with your company’s growth goals.

Tools and Methods to Improve ROI

Finding the right tools and strategies can make a huge difference in maximizing your tech hiring ROI. Here’s how to refine your approach and get more value from every dollar you invest.

Use Recruitment Tools

Modern recruitment platforms can transform how efficiently you hire, but the key is selecting the right one. Take daily.dev Recruiter, for example. This developer-first platform is built on an active professional network, boasting reply rates of 85–90% for double opt-in introductions. That’s a huge step up from traditional tools that rely on outdated profiles and cold outreach.

With a network of over 1,000,000 developers, daily.dev Recruiter connects you to passive talent already engaged in learning and professional growth. It integrates seamlessly with Applicant Tracking Systems (ATS) and allows for custom screening questions tailored to your hiring criteria.

Budget-wise, the platform offers a 30-day free trial with unlimited job postings and seats. After that, it operates on a straightforward pay-per-job model - no hidden costs or seat fees.

Beyond the platform itself, incorporating real-time data into your hiring strategy can further refine your results.

Apply Data-Driven Sourcing

Data-driven sourcing helps you zero in on qualified, engaged candidates by using real-time engagement data, skills assessments, and career interests. Instead of casting a wide net and hoping for responses, you can focus on developers whose interests, projects, and career goals align with your needs. This targeted approach not only shortens time-to-hire but also improves the quality of hires.

Since daily.dev connects with 1 in 50 developers worldwide, it gives you access to a substantial slice of the global developer community. Even better, 40% of the platform’s developers are senior individual contributors or leaders, ensuring you’re targeting candidates with the right level of expertise right from the start.

Pairing precise sourcing with an outstanding candidate experience can take your ROI even further.

Improve Candidate Experience

A strong candidate experience is crucial - it directly affects offer acceptance rates and long-term retention, both of which are vital for ROI. A poor experience can cost you not only great hires but also damage your employer brand.

daily.dev Recruiter prioritizes candidate engagement through warm, double opt-in introductions. This approach fosters trust and ensures that developers never feel spammed, while recruiters only connect with genuinely interested candidates.

The platform’s 4.8 rating from over 2,500 reviews highlights the quality of experience it delivers for both recruiters and candidates. When candidates feel respected and valued, they’re far more likely to respond positively and move forward in the hiring process.

Clear, personalized communication also plays a big role. Setting expectations about timelines, next steps, and role details shows professionalism, while outreach that references a candidate’s work or interests demonstrates genuine effort - something generic mass emails just can’t match.

Connecting ROI Metrics to Business Goals

Your hiring metrics only hold value if they align with your company’s larger objectives. Without this connection, you risk focusing on outcomes that don’t truly contribute to impactful talent acquisition or overall business success.

Link Hiring KPIs to Business Outcomes

To make hiring metrics meaningful, tie them directly to your company’s strategic goals. For instance, KPIs like quality-of-hire and time-to-productivity can help ensure that recruitment efforts lead to innovation and revenue growth.

Assessing quality-of-hire goes beyond just filling roles - it’s about measuring how quickly new hires integrate into teams and contribute to productivity. This is especially important when hiring for roles tied to new technologies or specialized areas. For example, if your company is adopting a cloud-native approach, your hiring process should prioritize candidates with expertise in that domain.

To achieve this, align your screening questions and hiring managers’ "must-have" qualifications with broader business needs. Tailoring your criteria to focus on specific skills ensures that your recruitment strategy remains relevant and supports the company’s evolving goals.

Regularly Review and Adjust Metrics

Even the most strategic KPIs need regular updates to stay aligned with shifting business priorities. Schedule periodic reviews - such as quarterly meetings with hiring managers and leadership - to evaluate whether your metrics still reflect your company’s current needs.

When metrics stop delivering results, it’s time to pivot. For instance, if a lengthy hiring process causes you to lose top candidates, consider focusing more on metrics like offer acceptance rates. Similarly, as your company ventures into areas like machine learning, adjust your hiring metrics to capture the unique expertise required for these fields.

Incorporate quick monthly pulse checks alongside your quarterly reviews to catch and address misaligned expectations early. These short discussions can help you avoid costly hiring missteps and ensure your metrics remain useful tools rather than static benchmarks. When treated as dynamic, evolving measures, hiring metrics can directly support business growth and deliver measurable results - not just check off arbitrary goals.

Conclusion

Transforming tech hiring into a strategic business advantage starts with measuring ROI. By focusing on the right metrics and aligning them with your goals, you can streamline your hiring process, minimize unnecessary costs, and assemble teams that actively contribute to your company’s success.

Modern recruitment platforms are shifting the focus from quantity to quality. Tools that prioritize meaningful, double opt-in connections ensure you’re engaging with candidates who are not only qualified but also genuinely interested in your roles. This approach leads to stronger hires and delivers measurable value to your business.

As your company grows and technology advances, your approach to ROI measurement should evolve too. The most successful organizations view recruitment as a flexible, ever-adapting process that adjusts to market trends and business demands, rather than a rigid, one-size-fits-all system.

FAQs

How can businesses accurately measure the success of new tech hires in terms of performance and cultural fit?

To gauge the success of new tech hires, businesses need to emphasize a few key areas: defining clear role expectations, implementing thorough screening processes, and offering a well-structured onboarding program. These elements create a solid foundation, helping new team members hit the ground running and blend smoothly into the organization.

Tools like daily.dev Recruiter can make this process even more effective. By connecting employers with pre-vetted developers who match both the job requirements and the company’s work environment, businesses can boost their chances of bringing in hires who excel in their roles and make meaningful contributions to the team.

What are the best ways to speed up hiring without lowering candidate quality?

When it comes to simplifying the hiring process without sacrificing the quality of candidates, daily.dev Recruiter offers a smart solution. It connects you with pre-screened developers through warm, double opt-in introductions. This means you're only interacting with candidates who are genuinely interested, helping you save time and eliminate unnecessary steps in recruitment.

By targeting developers who are already active and engaged, you can shorten the hiring timeline while still bringing in skilled professionals. This method emphasizes trust, genuine interest, and efficiency, making your hiring process smoother and more productive.

How can companies calculate the opportunity cost of leaving tech positions unfilled?

When tech roles go unfilled, the cost can add up quickly. Here's how to break it down:

Lost Productivity: Think about the revenue or output the vacant role would have generated. For instance, if a developer typically brings in $10,000 worth of value each month, every month the position remains open equals $10,000 down the drain.
Increased Workload on the Team: Current employees often have to pick up the slack, which can lead to burnout or a drop in their overall efficiency.
Delayed Projects: Missed deadlines or postponed product launches can have a direct financial impact, affecting growth and revenue.

To tackle these challenges, tools like daily.dev Recruiter can make a real difference. By connecting you with pre-qualified developers, it shortens the hiring timeline and ensures critical positions are filled faster, keeping your business on track.