Time to Hire: How to Improve This Important Recruiting Metric

 

A lot goes into hiring the perfect candidate. Here’s a typical checklist for a hiring team:

  • Write a captivating job description
  • Reach out to networks for referrals
  • Post the role across the web
  • Schedule candidates for phone interviews
  • Collect work samples and conduct skills tests
  • Bring selected candidates into the office
  • Check references
  • Send out offer letters
  • Repeat, repeat, repeat

 

In short, recruiting is not a simple process! For many companies, especially enterprises, this cycle can take nearly a month. A 2017 Glassdoor study of 83,921 interviews revealed that the average time to hire for a US company is a staggering 23.8 days.

 

When hiring is done in a high-turnover industry, such as retail or hospitality, there is an added layer of logistical complexity, and speed is key. Instead of hiring for one role and moving on to the next role, the recruitment process never stops and must constantly remain top of mind for the hiring manager.

 

Hiring Changes Over the Last 20 Years

 

Looking at the hiring process today versus the recruiting process twenty years ago, the basic setup remains the same. There are three main stages of hiring:

 

  1. Application/Sourcing
  2. Interview
  3. Offer

 

When zooming in on each one of these three stages, it is clear that hiring has drastically changed each part with the adaptation of technology. Indeed, The Muse, Ladders, and other sites help a job poster reach a far greater number of applicants, robust Applicant Success Systems such as Fountain makes managing applicant flow less hectic, and Glassdoor provides insight to both parties on what to expect when entering compensation discussions.

 

For the most part, technological changes have been beneficial for both employers and job-seekers. Businesses are able to reach a more diverse applicant pool, there is more hard data available for both parties, and hiring moves much more quickly.

 

At the same time, there are several unforeseen consequences from an increased volume of candidates. More applicants, complications from integrating multiple software systems, and the complexity of managing a pipeline with multiple touchpoints can make the role of an HR professional difficult. If that is not enough — there has also been a shift in America’s workforce through the rise of the gig economy and a changing mentality towards work.

 

Let’s take a brief look at today’s job seekers:

 

  • 60% of workers today are hourly employees
  • 45% of candidates are searching daily for jobs on their phones
  • 7.6 million Americans are expected to work in the on-demand economy by 2020
  • 50% of applicants are no-shows at interviews
  • 28% of new hires quit within their first 90 days on the job

 

As a HR professional, business owner, or manager tasked with hiring a team at scale and speed — how do you respond to these changes in demographics and behavior?

 

One of the most significant drivers you can directly affect is focusing on time to hire. Decreasing time to hire will pay dividends for a business, especially when you’re tasked with bringing on a great number of employees on to a team in a short period of time.

 

What is Time to Hire?

 

Time to hire is the time that elapses between first contact with a candidate and the acceptance of a job offer. The metric is most often (but not always) measured in days.

 

Essentially, time to hire measures how fast a company is able to hire a new applicant. Let’s use an example to see this metric in action!

 

A job is posted on May 15, and an applicant submits an application on June 1. You schedule a phone interview for June 5, bring the candidate into the office on June 15, and by June 20, you extend an offer that is accepted on June 25. What is the time to hire?

If you answered 20 days, you are correct (June 1 is the first contact, and June 25 is the acceptance date).

 

When hiring and onboarding for a large enterprise with a presence in multiple markets, a 1-day decrease in time to hire can yield hundreds more hires per month. And at scale, these hundreds of new hires can add thousands in top line revenue.

 

Time to hire vs time to fill

 

You might have heard the term time to fill when talking through recruiting solutions with other managers. It’s important to note that time to fill, while related, is quite a different measurement.

 

Time to fill is the time that elapses between the posting of a job application and the acceptance of a job offer by the candidate.

 

In our earlier example, time to fill is 37 days (including the 17 days in May when the job was posted online but the eventually-hired candidate had not entered the application cycle). Time to fill is used to measure the success of the whole hiring process, but it reflects on the success at getting new applications at top of funnel instead of measuring the efficiency of a recruiting department.

 

While in certain situations, time to fill and time to hire are synonymous, their distinction remains important for many industries. For instance, in high-turnover industries, such as hospitality or on-demand delivery, time to fill is a less relevant measurement because hiring is never “finished.” At an on-demand delivery app such as Grubhub or Uber, many delivery drivers are hired in each market — it is not a one and done situation. The hiring cycle never ends and building out pipelines will always be a goal. Time to hire, not time to fill, gives the most accurate assessment of performance in moving candidates through the funnel.

 

Average time to hire — a breakdown by industry and location

 

One of the best ways to assess time to hire performance is to look at the competition and other businesses operating in similar conditions. While these data sets should not be the only points to consider, they can help assess performance to-date.

 

Enter FOUNTAIN data here with INDUSTRY BY INDUSTRY AVERAGE TIME TO HIRE and LOCATION BASED AVERAGE TIME TO HIRE

 

<h2>Improving time to hire at your company</h2>

 

Now that we’ve identified the importance of time to hire and you have an idea of where your performance relates to other companies, here are steps you can take to improve time to hire for your company:

 

  • Diagnose performance at each stage
    • Are there certain areas of your pipeline that need more attention that others? By looking at the data, you should be able to find the pain points in the hiring process. Consistently track data across your organization, and don’t be shy about asking questions to your team when you see something out of the ordinary.
  • Build out pipelines
    • Candidate pipelines are an effective method of moving hiring forward. By creating a pipeline (essentially a pre-vetted group of candidates), you’ll be able to more quickly find the right hire when a role opens. It might seem like a lot of work up front, but building out pipelines will pay out exponentially and help reduce the time it takes to fill a position.
  • Utilize SMS messaging
    • Fountain has helped screen more than 7 million candidates since 2015. By using SMS, Fountain’s software is able to help companies quickly schedule interviews and communicate with applicants. Fountain data showed that when SMS usage amongst our customers from Q3 2016 to Q3 2017 more than doubled, the number of hires nearly tripled, and meanwhile, the time to hire went down by 19 days (65%). Read the full report on Fountain SMS performance.
  • Test, test, test
    • Testing is key to any business strategy. Rather than blindly accepting that a practice is working “perfectly,” challenge the status quo. Been using the same job description for a long-time? You should try an iteration and see if it lifts application volume. Are emails to qualified candidates sending at the right time? Why not run an A/B test to see if you can decrease time to hire.
  • Use an ATS built for the 21st Century
    • Today’s applicant tracking systems are some of the most powerful tools in the HR professional’s toolbox. Moving beyond simple tracking and data management, today’s systems can be considered “Applicant Success Platforms” rather than applicant tracking systems. With a focus on experience, metrics, and machine learning, these platforms are finally putting attention back on employee satisfaction. They integrate the newest machine learning and AI technology, and greatly reduce time to hire across the board.
    • Are you ready to decrease time to hire for your business? Visit us at Fountain.com to learn more or request a demo.

 

About Fountain:

 

Fountain helps hundreds of retail, restaurant, delivery, and hospitality companies hire at speed and scale. Many of the world’s largest and most forward-thinking companies, such as Uber, Safeway, Deliveroo, and Caviar, rely on Fountain to power its massive employee hiring and contractor vetting operations, across 50 countries and 700 cities.

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