What Is Time-to-Hire?
As a key metric for human resource departments, time-to-hire refers to the number of days between when a candidate applies to a job posting (or is sourced by a recruiter) and when they officially accept the employment offer. While the time-to-hire definition is simple, the metric itself can represent the overall efficiency (or lack thereof) of an HR recruiting team.
Teams with a significant lag time between these two important timeline factors may have an inefficient hiring process. However, by actively monitoring time-to-hire metrics, HR managers can spot bottlenecks within the hiring funnel and take action to eliminate barriers and boost departmental productivity.
On the other hand, a company with a short time-to-hire has likely deconstructed its hiring process into more streamlined phases. This helps reduce the amount of time it takes to successfully weed out and recruit promising candidates. Reviews regarding a company’s time-to-hire statistics can often be found on websites like Glassdoor.
According to a report from The Josh Bersin Company, the average time-to-hire has risen to 44 days in 2023. However, this can vary by industry due to several factors, such as an increase in specialized roles and smaller talent pools. For example, the same report indicates energy and defense companies can take over 67 days to fill job openings.
While there's no single metric for every company or industry to strive for, a short time-to-hire can increase your chances of securing top talent in a competitive market. After all, 29% of hiring managers who reported losing a good candidate attribute this to taking too long to make an offer.
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Can a Company Lay Off and Hire at the Same Time?
While there may be a stigma around laying off and hiring employees simultaneously, it's legally permissible—with some caveats, however. For instance, you cannot lay off an employee and then hire someone new within a short period of time to perform the same function. Otherwise, the layoff could be considered an unlawful termination.
Reasons for hiring and dismissing employees at the same time may include company restructuring, evolving core products and services, and significant increases or decreases of available resources for various company departments. For example, if a clothing company decides to transition to an online-only business model, they’ll have to lay off their brick-and-mortar staff and hire new employees with the skills to build and maintain the website.
While layoff rates have reduced slightly since 2022, several companies across industries continue to make significant reductions in force. HR departments are often responsible for discharging employees, but they must also maintain optimal time-to-hire metrics for their companies' restructuring process to execute efficiently.
Time-to-Fill vs. Time-to-Hire
Time-to-fill and time-to-hire are often used interchangeably, but in reality, they're two separate metrics. Time-to-hire refers to the total number of days between a candidate applying for a job and when they accept an offer, while time-to-fill data represents the total amount of time company positions remain unfilled.
Both metrics are used to better streamline the hiring process, but each one gives distinct insights. Take a look at the formulas below:
The time-to-hire formula takes three variables into consideration: the first day a job opening is posted (Day 1), the day the candidate accepts the job offer, and the day they submit their application.
For example, if your best candidate accepted your job offer on Day 30 and applied for the job 15 days after you posted it, your time-to-hire for that position is calculated like this:
30 - 15 = 15 days
To determine your average time-to-hire metric, add multiple individual result times and divide by the corresponding number of job positions. So, your time-to-hire average may look like this:
- Abigail: 15 days
- Jordan: 12 days
- Thomas: 16 days
- Anita: 8 days
- Owen: 17 days
Step 1: 15 + 12 + 16 + 8 + 17 = 68 total days
Step 2: 68 total days / 5 new hires = 13.6-day average time-to-hire period
This data lets you know the average job candidate waits 13.6 days to get hired by your company.
Unlike the time-to-hire formula, the time-to-fill formula can vary depending on when the HR manager begins measuring the time period. The starting point could be when a job opening is submitted for approval, when it’s officially approved, or when it’s first advertised. Like time-to-hire, the endpoint is when a candidate accepts the job offer. While the formula offers some leeway, it’s imperative to maintain consistency across all positions and teams to ensure accurate metrics.
For example, let’s say Day 1 is when the job opening is officially approved by HR. If a candidate accepts the job offer on Day 20, then the time-to-fill is 20 days. If two other positions took 15 and 30 days to fill, the average time-to-fill metric is calculated like this:
- Step 1: 20 + 15 + 30 = 65 total days
- Step 2: 65 total days / 3 new hires = 21.7 days
This data tells the company that positions remain open for 21.7 days on average.
By analyzing your time-to-hire and time-to-fill averages, you can determine what’s working well and what could be improved within your hiring process. All in all, the shorter your time-to-hire is, the better chance you have to secure top talent before they’re off the market.
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Finding and retaining great talent can be difficult in today's market, but recruiting quality hires can make all the difference. To help you find and keep the best talent, you may need to take a look at your hiring processes and how you can improve them.