What is time to hire?

• Time to hire: Definition
• How is time to hire calculated?

Time to hire: Definition

Time to hire measures the time between the entry of a selected applicant (job seeker) into a company’s hiring process and the time when he or she signs the employment contract. It is therefore a person-related indicator.

Time to hire also covers the duration of all intermediate steps between application and hiring:

• The targeted search for candidates (talent sourcing)
• The screening of documents
• Shortlisting
• The interview process (often structured in several stages)
• The performance of aptitude tests
• The decision
• The submission of the job offer
• The renegotiation of salary, holiday entitlement, etc.

Consequently, it also indicates how long it takes for a desired candidate to successfully pass through a company’s hiring pipeline or how long it takes for the candidate to receive positive feedback. 

Time to hire is often also called time to contract, as a lot can happen between the signing of the contract and the new employee actually joining a company.

Time to hire vs. time to fill

Time to hire and time to fill are often (incorrectly) used interchangeably. In fact, they are two different but related recruiting key performance indicators (KPIs). 

They both provide different but equally valuable insights into the performance of a recruitment process:

• Time to hire indicates how much time elapses between a candidate’s application and the candidate’s signing of the employment contract (“hire”).
• Time to fill reflects how long it takes to fill a vacant position from the time the need arises until the new employee actually joins. 

Consequently, the time to hire is only a partial sum of the time to fill. This is also reflected in the temporal and financial outcomes: Time to fill is usually higher than time to hire and also includes significantly higher costs.

How is time to hire calculated?

The beauty of time to hire as a metric is that it doesn’t require a complicated formula. All recruiters need are:

1. The number of days from the publication of the job advertisement to the signing of the employment contract.
2. The number of days between the publication date of the job advertisement and the application date of the final selected candidate.

The time between the publication and the candidate’s application (2) is then subtracted from the total time (1). The result is the time to hire.

A calculation example:

A job advertisement was online for a total of 80 days until the candidate was hired. The candidate who was selected only applied to the published job advertisement after 10 days.

  80 days (posting period) 
– 10 days (time to apply) 
= 70 days (time to hire)

Alternatively, it is also possible to add up the days it took to go through the intermediate steps from the candidate’s point of view. However, this involves a little more effort and offers more room for error.

Please note:

As a person-related indicator, the time to hire is slightly different for each candidate, which is why individual case numbers are not representative here. Instead, it is advisable to determine an average value and use this as a reference.

Comparisons with external time-to-hire benchmarks on a national level should also be treated with caution: Depending on the position, sector, and size of the company (e.g. SME), completely different average values may apply here, which are not applicable as a benchmark for your own company. 

Why is a high time to hire problematic?

One problem seldom comes alone, and this one in particular brings with it a whole host of subsequent problems:

1. Abandonment of the application process
   Good talent is in demand and doesn’t need to wait long. According to a study by StepStone, most of them withdraw their application after one month at the latest before they move over to the (faster-working) competition.
2. Deterioration of the employer image
   A slow hiring process has a negative impact on a company’s image. For example, bounced applicants report their experiences on evaluation portals and might share it with their network, which can put off potential applicants.
3. Vacancy costs rise 
   Every day that a vacancy remains unfilled costs companies money and steadily slows down their progress. For some companies, this can mean serious financial losses. By the way, there is also a key figure for this recruitment metric: Cost of vacancy.
4. Burnout risk in the team increases
   The longer it takes to hire someone, the greater the pressure on the team, as they have to do the work of the missing person. In the long run, this can lead to overwork and burnout.

However, companies can counteract this with some simple measures:

How can time to hire be reduced?

To reduce time to hire, both a selective and a holistic approach can be taken. However, for the best long-term effect you should use a combination of both. 

Here are some example measures:

• Revise the hiring process
  By looking at other KPIs and taking a closer look at the individual steps of the process, you can identify which ones take the longest and why. Improvements at these points will result in short-term improvements.
• Make employer branding more attractive
  Attractive employer branding increases the incentive for candidates to stay in the application process. For an attractive work environment, some talents will even wait a few days longer. The emphasis, however, is on “a few”.
• Improve the candidate experience
  The candidate experience should make the interaction between the applicant and the company pleasant and smooth. The use of auto-messages (faster response) and good availability for follow-up questions can already make a big difference here.
• Optimise applicant management
  Managing applications can be chaotic and if you have to search for documents first, you lose valuable time. An applicant management system such as JOIN enables the easy, centralised handling of documents in just one tool.

You can find further valuable information in our blog articles on the most important must-dos in the hiring process and on the topic of fair shortlisting.