Almost every company has operational efficiency toward the top of the priority list. Many organizations, however, overlook the importance of HR operations in achieving that goal. Using data and proper HR metrics helps human resources teams improve the hiring process, attract stronger talent, and retain top employees.
One of the primary metrics every HR team should look at is time to hire (TtH). Having a process in place to measure — and optimize — this metric can not only improve the recruiting process but also greatly reduce the collateral costs of filling vacant positions. In this employer’s guide, we’ll explain this metric’s value, how it can help when attracting job seekers, and some guidance on how to get started using it.
What is time-to-hire?
Time to hire is an HR metric that measures how long it takes to fill a job position. More specifically, it’s defined as the time between when a candidate applies for a job and when they accept the job offer. Whether you’re hiring your first employee or your hundredth, it’s a valuable metric that improves the candidate experience.
To calculate time to hire metrics, count the days between when the candidate applied and the day they accepted the offer. For example, if a candidate applies for a role on December 2 and they accept an offer on December 21, the time to hire is 19 days.
Time-to- fill vs. time-to-hire
Time to hire is often confused with another HR term, “time to fill.” You shouldn’t conflate the two, though, since they mean different things. Whereas time to hire measures the time it takes between a candidate’s application and their acceptance of the role, time to fill refers to the total time it takes to fill a job vacancy. That’s a much longer process, accounting for when the job requisition was approved through the candidate’s acceptance.
The two terms have different takeaways. While time to fill encompasses the entire hiring process, time to hire focuses solely on a candidate’s experience with your organization’s hiring process. So why is this metric so vital for businesses to track?
Importance of measuring the time-to-hire metric
Time to hire is a recruitment metric, in that it highlights shortcomings or strengths in your HR team’s ability to fill open positions. While it’s not a number that has an obvious impact on the organization’s bottom line, it is an important indicator of how well the company closes skill gaps and vets qualified candidates, both of which have effects throughout the business.
Effects on recruitment efficiency
A shorter time to hire indicates a more efficient recruiting and hiring process. A longer time to hire indicates inefficiencies somewhere in the process.
Considering hiring is one of an HR team’s most important responsibilities, reducing the average time to hire is a key performance indicator (KPI) to aim for. A high time to hire may suggest that your interview scheduling is slow, your background check and screening practices are inefficient, or any number of issues.
Top talent has other suitors. If you can’t reduce your time to hire, you risk losing qualified candidates to more efficient organizations.
Benefits of reducing time-to-hire
There are several benefits of reducing time to hire, including:
- Reducing inefficiencies: By filling skills gaps and open roles quickly, you can greatly reduce the amount of productivity lost and the stress experienced by other employees who have to pick up the slack for vacant roles. That can help avoid employee burnout.
- Attracting high-quality candidates: Nobody wants to wait around for weeks to hear back about a job application. The best candidates are in demand, so an efficient time to hire expresses to them that your organization wants to work with them.
- Enhancing candidate experience: Slow or unresponsive companies can gain less-than-ideal reputations in the workforce. It’s understood you’re not going to hire everybody, but companies that efficiently and courteously narrow down applicants to find the right hire will retain the respect of top talent.
Now that we better understand why metrics like this one are in the mix for many businesses, let’s find out how many are leveraging the data they uncover.
Strategies for improving time-to-hire
Understanding the importance of time to hire is the first step. The next is to implement strategies to improve this valuable recruitment metric.
Streamlining hiring workflows
Hiring is an organization-wide responsibility, even if it’s managed by the HR team. That’s because everybody plays a role in finding the right candidate to work with a specific team and thrive within a company’s culture. Effective ways to streamline hiring workflows include:
- Create specific job descriptions: Provide as much information as possible about the role’s responsibilities, requirements, compensation, and benefits, and about the company itself to attract the most qualified candidates and deter less-qualified candidates.
- Streamline interviews: Rather than bring candidates back for four different rounds of interviews, reduce the number of interviews by having candidates meet with several people at once.
- Promote employee referrals: Employee referral programs can be a great way to bring in talent that meshes with the company culture while offering a valuable employee retention incentive.
Utilizing automated screening tools
Applicant-tracking software (ATS) uses artificial intelligence to find keywords and phrases on applicant resumes that are most relevant to the job. With these systems and other AI-enhanced screening tools, you can narrow down applicants automatically instead of having to sift through individual resumes. That way, you can move faster to the interviewing stage rather than dragging your feet through the initial screening.
Streamline your company’s hiring processes
Like cost-per-hire and employee turnover rate, time to hire is one of the most important HR metrics for teams to monitor. It’s an effective measure of how well your team is filling roles and reducing productivity loss and burnout associated with inefficient hiring processes.
With this guide, you’ll be well on your way to streamlining your company’s hiring processes. But don’t stop there. Use OnPay’s comprehensive HR and small business solutions to improve hiring, manage your teams, and operate your business more efficiently than ever.
