What Is Time-to-Hire and How to Reduce It

If you've recently found yourself thinking about how best to track the work your recruitment team has been doing, KPIs, measures of success, and specific metrics are the way to go. In this case, the first key performance indicator you should look at is time-to-hire. It’s crucial to recruiter work and relatively easy to track.

But, before we dive into time-to-hire, let’s talk about KPIs in general and add a bit of background to these elements of your strategy. KPIs or key performance indicators help you understand how successfully you’re reaching your targets and how you or your team are performing.

Think of them as long-term goals that help you measure up against other hiring managers in the industry, your team members, or even yourself at different times. Basically, they're efficiency indicators.

Benefits of Setting Up and Tracking KPIs

Implementing KPIs can be a hassle since the process requires a bit of research and a year-long commitment to tracking, exploring, and writing down your results. But, setting up KPIs has multiple benefits:

1. It sets a clear goal – Implementing KPIs primarily helps you choose your focus and work toward what matters most.
2. It adds context to your work – Setting a KPI that matches the industry standard and tracking how close you are to it can tell you if you’re lagging or speeding ahead.
3. It helps you invest more energy into things that work – Writing down and tracking your KPIs will most likely help you understand what works and what you’re wasting your time on. Are employee referrals your best source of candidates? Are you spending too much time posting on multiple job boards just to get low-quality applications? KPIs can help you get to the bottom of this.
4. It helps others understand your efforts – Setting public goals and keeping track of how you’re achieving them, what is adding and what is distracting from them, helps not only you but others around you. It keeps the team on the same page, helps other employees understand what you’re aiming for and where you’re applying your efforts, and helps your managers see what you’re doing and how you’re approaching it.
5. It helps you save money – Are you overspending on recruitment and hiring? Is your cost-per-hire too high? You’ll never know until you implement the right KPIs.

What Is Time-to-Hire and How to Calculate It?

When talking about KPIs, the first metric that comes to mind is time-to-hire. As one of the basic indicators of success of your recruitment process, time-to-hire, along with time-to-fill, is used to show how long the recruitment process is.

There are a few angles from which you can approach time-to-hire, depending on what you consider ”the starting point“. Your starting point can be the moment the candidate you eventually hired applies to the position in question or the moment you first reach out to them. It comes from a difference in perspectives — the first one is from the standpoint of a candidate (how quickly did they move through the stages), and the second is from the standpoint of the company (how quickly, after getting the application, did you hire someone).

For this blog, we’ll talk about time-to-hire as the time between the application of the candidate you eventually hired and their job offer acceptance. This way, we’re highlighting the experience of the most qualified candidate (or candidates) for the position and analysing how long they were in the hiring process.

It's important to highlight that time-to-hire and time-to-fill are different recruiting metrics.

Time-to-hire is the time (usually measured in days) between the candidate application and their job offer acceptance.

Time-to-fill is the time (also measured in days) between the job posting and the day the candidate accepted your offer.

What Can Affect Your Time-to-Hire?

There are many factors that can determine your time-to-hire. Everything from the industry, the complexity of the role you’re looking to fill, the level of seniority you’re looking for, the size of your company, and even your geographical location can have an impact.

It’s intuitive that a position that requires a niche skill might imply a longer hiring process. Just like it might be obvious that a position in London, England, will probably get more applications than one in Seyðisfjörður, Iceland.

As far as the company size goes, big companies often have more complex hierarchies and thus have a selection that includes more steps or might have a more strict manager approval process.

Additionally, although a selection process with more steps might make you more confident in your pick and help you get to know the candidates better, a lengthy interview process will significantly change your time-to-hire.

Finally, companies that utilize technology and recruiting software in their staffing efforts tend to cut their time-to-hire. This is because they funnel all the applications into one place, have a single source of truth when evaluating candidates, and can often automate emails and interview scheduling.

Explore implementing a good ATS, like PontaHR, to help you reach your KPIs faster.

‍

What is the Average Time-to-Hire?

Generally, the average time-to-hire across all industries is 30-45 days. This includes all the hiring stages you have set up in your recruitment workflow.

• Retail: Around 30 days for entry-level and hourly positions.
• Finance: 30 to 40 days, depending on role complexity.
• Sales & Marketing: These can have a slightly shorter time-to-hire, often ranging from 30 to 40 days.
• Construction: 40 to 50 days for skilled labour or managerial roles.
• Tech & IT: Time-to-hire in the tech industry tends to be longer due to the competitive talent market and more rigorous screening processes. It can range from 40 to 60 days or even more for senior or highly specialized roles.
• Healthcare & Clinical Roles: These positions tend to have longer time-to-hire due to the complexity of the roles, licensure requirements, and background checks. They often range from 45 to 60 days or longer.
• Executive Roles: Hiring for senior leadership positions typically takes longer, often between 60 to 90 days or more, due to the rigorous vetting process and the need for a smaller, highly qualified candidate pool.

Ultimately, the ideal time-to-hire balances speed and quality, making sure the best candidates for the position are hired while still being timely and effective.

If your process is too slow, you risk losing great candidates and creating a bad experience for other applicants. If your process is too quick, it might indicate that you’re not paying enough attention to your candidates, looking over someone who is a good fit, and not hiring the best candidate. This might later cause a high turnover rate and require you to repeat the hiring process.

How to Improve Your Time-to-Hire?

If you notice your time-to-hire is above average, whether it’s the industry average or the general average, there are a few things you can do to lower the amount of time it takes you to find the perfect candidate.

Firstly, you can try taking a long hard look at your hiring process, including the interview process, and see which workflow stages can be skipped to simplify the process. This step is the easiest and takes the least amount of time.

Secondly, you can try implementing a pre-screening tool that will pick the best-fitting candidates for you. It will take a look at their CVs, previous experience, and the main points in their CV and pick out the ones who fit your open position the best.

Next, you can upgrade the number and quality of applications by building a candidate database. You can do this by giving candidates the option to leave an open application even when you have no open positions, going through the applications, and nurturing the candidates that you feel would fit into your company based on their previous experience and because you think they’re a good culture fit.

Lastly, investing in employer branding is a long-term strategy but will help you gather applications from amazing candidates and fill out your positions faster.

Building a strong employer brand, representing what makes your company special, what benefits you offer, and what the corporate climate is like will surely help you build your brand.

In Conclusion

If you're looking to track the work of your recruitment team, implementing key performance indicators (KPIs) is the best way to go about it. Time-to-hire, as one of the most basic and easiest KPIs to implement, is a must-have when it comes to team tracking. It is the amount of time it takes a candidate to go from applying to your open position to receiving and accepting a job offer. Time-to-hire is also one of the best ways to measure the health and set-up of your selection process. It's important to highlight that time-to-hire and time-to-fill are two different metrics.

The average time it should take you to make a hire is 45-60 days, but this depends on many factors. If your time-to-hire is too long or too short, your selection process might be in need of restructuring.

Good luck hiring, tracking, and improving, make sure to check your work against the hiring benchmarks! 🍀

‍