Whether you’re a business owner, hiring manager, or HR professional, understanding the definition of time to hire and how it affects potential candidates, new employees, and your overall business is crucial to maintaining a simplified recruiting process.
What is time to hire?
The “time to hire” definition is a recruitment metric that measures the time from which a prospective hire applies to the moment they accept your job offer. In short, time to hire helps you determine how quickly you can find the best candidate for an open position.
Ideally, recruiting teams should have minimal time to hire; they should be able to identify the right candidate and have them accept an offer letter as soon as possible. However, it’s not always this easy. Various factors can slow down this process, as well as your total time to hire as a result:
- Larger candidate pools
- Poorly defined needs
- Unclear job descriptions
- Inefficient interviewing or screening process
- Lack of communication or decision making
Why you should measure time to hire
The time to hire metric should be an important KPI to any business because it helps you identify which internal and external factors contribute to a longer recruiting period, so you can implement strategies to overcome what stands between you and the perfect candidate.
Determine how much time is needed to hire a candidate
How long does it take for candidates to move through the screening and interviewing processes until you find the right person? How many stages of the recruiting process do you have in place? How long does it take for a candidate to move from one stage to the next?
As mentioned above, the less time it takes a candidate to move from one stage to the next — to eventually be offered a job — the better. With that said, a company that needs to find the best person for a role critical to completing day-to-day tasks or major business functions will want to find them quickly to avoid workflows from falling too far behind.
Knowing the time to hire for such roles allows managers and HR personnel to determine how early they should post the open position on job boards and begin pulling candidates through the pipeline.
Identify what resources are needed for the hiring process
Time to hire can be used to determine how effective your current recruiting practices are. From there, you can determine what types of resources, and how much of them you need to hire for specific roles.
Whether that means ensuring hiring managers are available to spend time interviewing candidates or implementing an automated system to screen a large pool of candidates faster, reviewing your time to hire will help you determine what your recruiting team needs to improve their efficiency.
Cut costs associated with the hiring process
It’s easy for businesses to forget that there are costs associated with the hiring process. Recruiting teams may need to budget for the following:
- Salaries for hiring managers and recruiters
- Advertising listings on job boards
- Hosting career fairs or similar events
- Funding the relocation of new hires
Naturally, the longer your time to hire is, the more these costs may start to increase, especially if your resources are not allocated wisely. Of course, these costs begin to skyrocket if you end up hiring the wrong person.
Calculating your average time to hire will help you pinpoint exactly how long you need resources to avoid going over your budget — and avoid wasting money on the wrong candidate.
Implement practices to avoid losing quality candidates
Finally, if you actively measure your time to hire, you can begin the process of reducing it as necessary. By doing this, you can decrease your chances of losing quality candidates due to a long hiring process.
For example, if a prospective applicant receives an offer letter from another company before you even have the chance to invite them to a second interview, they will likely leave your hiring funnel for a more immediate job opportunity. Not to mention, many businesses put a certain limit on how long a potential hire has to accept their offer letter; if you don’t get back to your candidate long before this period expires, they will be even more tempted to accept that offer while it’s still on the table.
Once you know you need to shorten your time to hire, you can avoid all of these potential issues. Candidates will have a more positive experience, which will increase their willingness to hold out and accept an offer from your business.
How to measure time to hire
Businesses can calculate time to hire statistics by determining the number of days that pass from when a candidate applies for a posted job to when they accept the offer for it.
Here’s the standard time to hire formula:
Day Candidate Accepts Sent Offer – Day Candidate Applies for Job = Time to Hire
To get more insight into your company’s time to hire, measure the number of days that pass between each stage of your hiring process. This may include:
- Day candidate applies for posted job to day candidate is contacted to take assessment
- Day candidate submits assessment to day candidate is contacted for 1st interview
- Day candidate has 1st interview to when candidate is contacted for 2nd interview
- Day candidate has 2nd interview to when candidate is sent offer letter
- Day candidate is sent job offer to when candidate accepts job offer
Every business is different, so the stages you’ll want to measure will depend on your current hiring practices. From there, you can perform your time to hire calculations.
Once you’ve determined time to hire, you’ll want to find the time to hire average across new employees to get a bigger picture of how effective your hiring process is. Simply add the time to hire for each candidate who accepts a job offer and divide by the total number of job positions they filled.
1st Candidate Time to Hire + 2nd Candidate Time to Hire +…nth Candidate Time to Hire / Total Number of Job Positions Filled = Time to Hire
You can use a similar formula as the one above to determine average time to hire statistics for each department or location in which you’re hiring rather than across all of your recently filled job positions.
This helps you address whether there are hiring processes specific to that department or location that could use improvement and allows you to decide whether these systems are efficient enough to be standard across every other recruitment area of your business.
Best practices when measuring time to hire
Once you’ve identified your company’s average time to hire, you’re not done. The following are some best practices to keep in mind so you can effectively leverage this new information:
The data you find from calculating time to hire will guide you as you improve your business’ recruiting process and increase your chances of finding the right candidate in as little time as possible. Here are a few data points you should look at once you know your time to hire metrics:
- How long does it currently take to fill various roles? Compare your average time to hire with your average time to fill, which is another metric that measures how long it takes your business to fill a position from the moment you post a job opening.
- How much time does it take candidates to move through the process? Take a look at the number of calendar days that pass between stages, such as between when a candidate is selected, and an offer letter is sent. There may be resources or strategies you can implement to reduce the time spent here.
- What is your offer acceptance rate? What percentage of applicants are accepting the offer letters you send? This data can help you determine how attractive your offers are to the candidates you want to hire. When comparing this to time to hire, consider how appealing your offer may sound to candidates who have quickly moved through the recruiting pipeline versus those who have not.
- What is the ratio of good to bad applications you typically get? How is your job post performing? Are you including the right keywords or specifying clear requirements to ensure you receive good applications? Having to sift through all of the bad applications to eventually find quality candidates can end up adding to your time to hire — meaning your ideal candidate is forced to wait longer for your response.
Be consistent with the way you measure
Consistency is key when you begin regularly measuring the time to hire KPI, especially if you want your data to be reliable and have meaning for you and your company. With that said, avoid measuring and comparing metrics differently each time you need to go through the hiring process for an open position.
By being consistent, you can more accurately compare data across longer periods, such as monthly and quarterly intervals, and see whether new strategies to shorten time 2 hire are actually working.
Use comparisons to assess time to hire
There are two important comparisons you should make to assess where your company’s time to hire stands:
Time to hire vs. industry average
How does your time to hire compare with the industry average? What is the average time to hire across other businesses in your industry?
Based on this data, you can determine whether you need to improve or maintain your times. Industry data can also clue you into any trends that could impact your company’s time to hire, such as economic or political influences and the state of the current job market.
Time to hire vs. quality of hire
Another metric you’ll want to compare as you calculate time to hire is the quality of your applicants.
Think about it: how much time do you spend in the recruiting process until you find either the “perfect” candidate or settle for the best you can get — compromising on some of the preferred applicant requirements you had?
Comparing the average time to hire in either instance will help you determine whether you’re being too idealistic about the employees you want to hire, or you’re simply finding the right applicants at the wrong time, or the wrong applicants at the right time.
In short, comparing time to hire with quality of hire can help you identify at what point in your time to fill the ideal candidate typically comes along, so you can plan to use your resources accordingly.
Time to hire is a common metric used among recruiting teams to ensure that companies choose the right applicant for an open position as soon as possible. When compared with data such as average time to hire across industries and the quality of applicants, businesses can ensure that they are effectively using their resources to not only simplify the recruiting process but also maximize their chances of picking the right candidate.
In many cases, being able to do so means reducing time to hire. However, your company’s goals shouldn’t just be to reduce time to hire once you’ve determined what it is; they should instead be to consider what implications it has on your business or industry, current and new employees, and how applicants perceive your overall recruiting practices.