Every recruiting team wanting to improve its hiring process is focused on the same thing, the metrics. The recruitment process is full of invaluable metrics to understand what works and what doesn’t in the hunt for qualified talent. Although these exact metrics may vary from industry to industry, they remain largely the same. Understanding these metrics is key to creating a better candidate experience and a more efficient recruiting process.
Of these metrics, the most often confused are time-to-hire and time-to-fill. They both measure time spent in the recruitment process. However, the difference is a matter of perspective. Whereas time-to-hire focuses on the candidate’s experience in the recruitment process, time-to-fill is viewed in an organizational context. So, when we talk time-to-fill vs time-to-hire, we’re really talking candidate vs organizational.
Time-to-hire specifically measures how long it takes a candidate to go from their application to being hired for the role. According to Yello, this metric averages 3-4 weeks across all industries. When we consider this metric, we’re really discussing the hiring process from the candidate’s point of view. A slow time-to-hire typically translates to a negative candidate experience. The job hunt is a remarkably stressful experience. Active job seekers are looking for work and the sooner the better.
Time-to-fill, on the other hand, measures from when your organization has recognized the need for a new hire to have made that hire. So, rather than focusing on the candidate’s experience, this metric focuses on determining the efficiency of your organization’s hiring process as a whole. A slow time-to-fill indicates there are steps you and your team can take to speed up the process – which is vital for ROI on the recruitment process. According to Zippia, the average vacancy costs an organization $98 per day with an average total cost of $4,129.
When we look at the time-to-hire definition, we see a remarkably simple metric. Nonetheless, it remains important to build better recruitment processes. Time-to-hire represents a critical time. A long time-to-hire could lead top candidates to drop out of your funnel and go to competitors looking for their skills. In fact, Forbes reports that the best candidates are off the market within 10 days of the start of their job search. That represents a remarkably narrow window of time for recruiters to get to them before the competition. ‘
As we mentioned before, a long time-to-hire creates a negative candidate experience for candidates and recruiters alike. This not only damages your chances of finding that perfect candidate, but it harms your organization’s overall image and reputation. As such, a long time-to-hire today can mean an even more difficult recruitment effort tomorrow. That’s not even to mention the costs incurred by a long recruitment process. A short time-to-hire is budget friendly and takes that pressure off of hiring managers.
So, by now you know want to know the time-to-hire formula so you can understand this metric in your own hiring process. On an individual basis, it’s only a matter of counting the days between when a recruiter has contacted a candidate and when that candidate is hired. However, finding the average time-to-hire is a little more involved.
The average time-to-hire formula is:
((Candidate 1’s time-to-hire)+(Candidate 2’s time-to-hire) …) / Total number of hires.
To put it simply, find the time-to-hire for each of your candidates in a given period. Add them together. Then divide the resulting number by the total number of hires made in that period. This represents your average time-to-hire.
Time-to-fill is a little different, but important all the same. Finding your average time-to-fill indicates the efficiency of your hiring process from start to finish. It starts when a hiring manager submits an official request for a new hire and ends when that request is filled.
A long time-to-fill can be just as troublesome as a long time-to-hire. In particular, we’re talking about the costs of recruitment here. As we mentioned before, the average vacancy costs approximately $98 a day. This estimate accounts for both lost revenue and the strain vacancies put on existing employees, typically in the form of overtime. The longer the process takes, the more those costs add up.
Finding the time-to-fill on an individual basis is just as simple as finding time-to-hire. Simply take the difference between the start of your hiring process and the end. However, we’ll need an average time-to-fill formula to understand this metric across hires.
To calculate your average time-to-fill, start by adding the time-to-fill for individual hires across a given period such as the year or quarter. Then divide that by the number of positions you filled. This will give your average time-to-fill for that period.
Here’s what that formula would look like.
((Role 1 Time-to-fill)+(Role 2 Time-to-fill)...) / Total number of roles filled
According to SHRM, the average time-to-fill is around 42 days, but it will vary according to your industry. For example, the global time-to-fill for engineering roles is closer to 62 days.
If you’re looking to reduce your time-to-fill, you’ll need to consider how you can improve your recruitment strategy. This can include anything from building a better candidate database with an ATS or actively searching out passive talent.
Metrics are our gateway to understanding why or why not our recruitment process is working. We can use them to see what’s wrong, where, and how. It’s only a matter of finding and understanding the KPI metrics.
For example, time-to-hire metrics help us understand what candidates are experiencing in the hiring process. When we see a long time-to-hire, we can take steps to evaluate why. How long are candidates waiting to hear back from their applications? How long are they spending in the interview process? How much of that time is just waiting for the recruiter to catch up? It’s important to answer all of these questions when our time-to-hire is too long.
The same can be said of time-to-fill metrics. However, rather than looking at what is happening with the candidate specifically, we’re looking at the recruitment process as a whole. We’re talking about efficiency here. Why does it take so long to fill a position? Can we do better and how?
But these are certainly not the only hiring metrics to track. There is a plethora of data that you can utilize from your recruitment process to track both efficiency and quality.
Quality of hire, for example, is one of the most important recruitment metrics for hiring managers today. The metric specifically measures the value a new hire brings to the organization. However, it takes time. Looking at a candidate’s first year with the organization can give recruiters an understanding of the quality of candidate the existing recruitment strategy is acquiring.
Another important metric to consider is the cost per hire. We often see this metric tied directly to time-to-hire and time-to-fill as it is tied directly to the resources and time spent acquiring new talent. Understanding cost per hire is the first step to optimizing your recruitment budget.
Looking for a new tool to improve your recruitment process across the board? Consider on-demand phone interviews. Asynchronous interviewing consistently improves all the metrics we’ve discussed here and more.
Want the proof? See how on-demand interviews helped Securatech decrease their time-to-hire by 50%.