Many recruiters use an applicant tracking system (ATS) as a way to expedite the hiring process. An ATS can collect, sort, and even rank job applications. As it works through these processes, the system collects an immense amount of data. Some of that data is more valuable than others. The “time to fill” metric, in particular, can provide critical insight into how efficient your hiring process is. Efficient hiring processes are crucial because leaving positions unfilled – even for a short amount of time – is costly.
How Do We Define Time to Fill?
Different companies define “time to fill” differently. The broad definition is that it’s the number of days that it takes to fill a position. But exactly how that number is calculated is up for some debate.
Rick Carlson argues in a piece at LinkedIn, for instance, that time to fill should be measured from the time a client’s requisition is received by a recruiter to the date the successful candidate begins work.
Others calculate time to fill based on the date of first contact with the successful candidate to the date of hire. But this is actually a different metric: time to hire. As explained in a terrific piece at Workable: “This might seem like a small difference; it’s not. One metric is a reality check for how long the whole process is taking, the other tells you how fast you move once you’ve found the right candidate.”
The most accurate way to measure time to fill is the number of days between the date the job is posted and the date a job offer is accepted. Weekends and statutory holidays should be excluded from the count, since no one is working on those days and no progress could have been made.
Why Should We Measure Time to Fill?
Time to fill can provide valuable insight into how efficient your recruitment process is and where improvements can be made. While it is an important metric for recruiters to consider, it is critical for employers, given the costs related to unfilled positions.
Time to fill is an important metric in and of itself. However, there are several steps to work through between the time that a client’s requisition is received by a recruiter and the date of hire. Looking at each of those steps will provide additional information specifically for recruiters or for clients. For example, consider:
- How many days passed between the date that the job was posted and the date that the successful candidate submitted their application?
- How many days passed between the date that the applications were provided to the client and the date of the first interview?
- How many days passed as the interview process continued?
- How many days passed between the date of the last interview and the date that a job offer was made?
When working with a recruiter, the onus for completing some of those steps is on the recruiter but others are on the client. Each should examine the data to see if there are places where they can make improvements. For instance, the data might show a large lag between the dates the job was posted and the first application was received. In that case, the recruiter might want to consider creating a more robust bank of job seekers. However, if the data shows a large lag of time between the date the employer received the applications and the first interview, then the employer may want to consider streamlining their own internal hiring processes.
Keep in mind the average time to fill varies across industries. As Daniel Howden reports in a piece at Workable, it takes 50 days on average to fill Information Technology jobs and 58 days to fill Engineering jobs. These are good benchmarks to keep in mind when considering your own metrics.
The Costs of Unfilled Positions
Without knowing their time to fill metrics, employers often underestimate the length of time it takes to fill an open position. They may wait too long to start the hiring process, leaving the position at risk of being unfilled for a duration of time. At first glance, that may actually seem to make some economic sense. There is a savings in wages and benefits after all, no?
As it turns out, no. The position exists because there is a job to do. And without someone designated to do that job, the work falls to other people. The costs involved in hiring contractors, outsourcing services, or paying other staff overtime is often higher than the cost of paying an employee regular wages and benefits. Leslie Stevens-Huffman gives a detailed example in a piece at Dice:
Plugging those numbers into the [above] formula, a vacant software engineering position would produce preliminary cost savings of $25,935 [if that position took 43 days to fill]. … Based on an hourly bill rate of $91, the cost of a contract replacement would run $31,304 for the 43-day period, which is $5,369 more than the cost of a regular employee.
Stevens-Huffman explains three other ways in which unfilled positions can be costly. The first is the impact it has customer satisfaction, and ultimately on business. If the unfilled position results in issues like “buggy software, delayed product releases, [or] longer wait times for technical support,” customers might be tempted to take their business elsewhere.
The second is the costs that are incurred with failed or delayed projects due to an unfilled position.
The third additional cost is human impact. Understaffing can affect the stress levels, morale, and absenteeism of other employees. It can also lead to higher attrition rates. And once staff starts leaving due unstaffing, there is an economic cost as well. Using the example of replacing a software developer who makes $70,000, Stevens-Huffman explains that it will cost $35,000 to that position once it’s vacated.
Clearly, the economic impact of an unfilled position – whether for a few days or for the entire time to fill duration – is substantial. The time to fill metric should be a crucial piece of data considered by all HR teams.
Other Valuable Hiring Metrics
Although time to fill is critical, other hiring metrics should be tracked as well. Daniel Howden suggests tracking:
- Time to hire (to gauge the efficiency of your hiring process);
- Qualified candidates per hire (to determine the effectiveness of your sourcing);
- Interviews per hire (to understand the costs invested in the interview process); and
- Cost per hire (to measure the cost effectiveness and efficiency of the recruiting process).
All metrics can be used to increase efficiencies, diminish costs, and reduce the impact of unfilled positions on other employees. And that is just good business.