How to Calculate Time to Hire
Hiring is one of the most important parts of any business. A good hire can make all the difference in your company’s success, and a bad hire has the potential to completely derail it. Because hiring is such an important aspect of running a business, it’s essential that you have an accurate estimate of how long it takes to hire an excellent new employee.
The Time to Hire Formula
Time to hire (TTH) refers to the time it takes from making initial contact with a candidate to them accepting a final offer.
The TTH formula = (date of offer acceptance) - (date of first contact)
For example, if a company makes an offer on the 35th day after contacting someone on the 1st, their TTH rate would be 35 - 1 = 34 days.
How to Calculate Average TTH
To calculate your average time to hire r, you’ll need to know how many positions were filled and how long it took to fill them. Here’s how you can calculate TTH:
Average TTH = (total time to hire) / (number of positions filled)
To calculate your average time to hire, first subtract the date a candidate accepted an offer from the date they applied. Do this for every candidate, and add those numbers together. Then divide that number by the total number of candidates. Here’s an example with just three candidates:
Candidate 1 time to hire: Day 45 - Day 2 = 43
Candidate 2 time to hire: Day 66 - Day 34 = 32
Candidate 3 time to hire: Day 107 - Day 59 = 48
Average time to hire = (43 + 32 + 48) / 3 = 41 days
Why is Time to Hire Important?
TTH Rate is a good indicator of your hiring process efficiency. When HR monitors their time to hire, blockers or issues during the sourcing, screening, interview, and negotiation process will immediately become clear. The TTH rate can be used to benchmark how well you are doing against other companies in your industry and identify areas where you can improve your hiring process
How Can You Improve Your TTH Rate?
Time to hire is a key metric for HR departments because it showcases the efficiency (or inefficiency) of the hiring process. If you want to improve your TTH, it’s a good idea to track it continuously rather than just measuring it at the end of every quarter or year.
When HR monitors their time to hire, blockers or issues during the sourcing, screening, interview, or negotiation process will immediately become clear. It’s important that you have a streamlined hiring process to ensure that no one gets lost in the shuffle and that candidates think highly of your process — you still want candidates who don’t make it to the final round to have a positive experience.
Use your candidate Net Promoter Score (NPS) to gauge how candidates view your hiring process and identify any ways to make it better.
Leverage TTH in Practice
By having an accurate estimation of how long it takes to hire someone, you can:
- Improve your hiring process. If you have a bad candidate experience or are not communicating with candidates in a timely manner, then they will likely drop out of the process before they even get an offer. This will have a negative impact on both your NPS score and time-to-fill rate.
- Improve the quality of your hiring team. A long TTH may indicate gaps in your sourcing or recruiting team. Perhaps you need more team members to manage the workload, or you need to improve the communication between the team members you already have.
- Centalize information. If you notice your TTH is getting longer as your company grows, take a moment to assess your Talent CRM. Make sure that your hiring team has the right tools to speed up the process.
Hopefully, this article has helped you understand how to calculate your time to hire rate and its importance. The more accurate your estimation is, the better equipped you’ll be to create an excellent hiring process. If you’re looking for help with your hiring process or want more information on how we can help with your HR needs, contact us today.