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Here’s How a Slow Hiring Process Impacts Your Bottom Line

Hiring has always been a process of relationship-building, and building strong relationships takes time. Yet many recruiters and hiring managers have accepted the length of a hiring process as inevitable.

In fact, organizations are better served by looking at the quality of time spent on hiring, rather than the quantity. The longer the hiring process continues, the more it costs a company in money, talent and long-term competitiveness.

The costs of doing nothing are astronomical in human resources. Companies risk degrading the skill and talent of their own workforce as they slowly spiral into irrelevance. Instead, a proactive approach to streamlined hiring is a must.

Here’s What It Costs to ‘Do Nothing’

According to the Society for Human Resources Management Human Capital Benchmarking Report, the median cost per hire for US companies is $2,000. Yet this number reflects only what the company spends to bring each new hire in the door, says project lead Lindsay Northon, a specialist in HR competencies at SHRM Research.

In fact, the actual impact to the company’s bottom line may be much greater.

The average time it takes to fill an open position is 44 days, representing a 50-percent increase since 2010, Dr. John Sullivan writes at ERE. For each day a position goes unfilled, the organization loses productivity, as the position’s tasks remain undone. Additional productivity losses occur as other staff members take time from their own work to cover the essential tasks of the open position. Since existing staff are stretched thinner, their engagement suffers and their risk of burnout increases, further jeopardizing long-term productivity.

Once these costs are factored in, the actual losses represented by an open position are much higher. According to Glassdoor, it costs companies about 33 percent of a worker’s annual salary, on average, to replace that worker.

Meanwhile, the quality of your candidate pool degrades over time, as well. The best candidates are on the market for only 10 days before they’re hired, says Officevibe. Further, those candidates won’t wait around for a hiring process that drags on; 60 percent of applicants report withdrawing from a hiring round because it took too long.

Once they’re gone, these candidates are unlikely to reapply. They remember their frustration at the wait time, and they prefer to try connecting with employers who haven’t frustrated them in the past.

They may even spread their frustration to other job-seekers: 52 percent of candidates frustrated by a long hiring process say that they would recommend others do not apply to the same company, says Ashleigh Webber at Personnel Today.

slow hiring process

How Long Should Hiring Take?

A 2017 Glassdoor study found that US companies take 22.9 days to hire on average. Companies themselves have considerable control over the length of time it takes to hire. “A simple regression analysis shows company-specific factors explain about 14.7 percent of variation in hiring delays,” says Glassdoor chief economist Dr. Andrew Chamberlain. Factors like industry, location, company size or job demands each account for fewer hiring delays.

Companies in some industries naturally take longer to hire than others, particularly when they face greater regulatory demands. For example, federal agencies averaged 106 days to hire new employees in 2017, says Nicole Ogrysko at the Federal News Network. Yet these industries can also do much to streamline the hiring process.

Streamlining the hiring process is different from rushing the hiring process, says Lisa Shuster at consultancy PeopleWorks, LLC. The cost of hiring the wrong person for the job can be up to 200 percent of the worker’s salary, Shuster says. To strike the right balance, choose tools that make it easier to find the right people more efficiently.

4 Ways to Reduce Time to Hire

Speeding up the hiring process provides a major competitive advantage. When you make an offer quickly, you create a situation in which the wait for a competing offer may simply be too long — encouraging the candidate to choose your organization instead of your competitor’s.

“It’s clear that in a more competitive environment, to hire the talent you need, you have to streamline your processes,” says Elizabeth Kellar, director of public policy at the International City/County Management Association.

Make Applying Easier

The speed of the application process greatly affects the quality of the candidates who apply for an open position.

About 20 percent of job-seekers want to spend less than 10 minutes on a job application, and only 30 percent are willing to invest more than 20 minutes, reports Business News Daily. Most prefer to spend 10 to 15 minutes on the initial application, especially if they’re applying from a mobile device.

When the time applicants spend on their application is shortened, so is the time it takes to gather applications. Using an applicant-tracking system that automatically sorts data and spots patterns can make the process of reviewing applications more efficient for hiring managers as well.

slow hiring process

Improve Your Communication

Radio silence during the hiring process frustrates most candidates, says John Hollon at Fistful of Talent. Managers and recruiters can reduce frustration simply by communicating with candidates.

Communication doesn’t have to be time-consuming. Automated emails integrated into talent management systems can keep candidates informed about the process without distracting from hiring managers’ attempts to find the right person for the job.

Dig Into Your Hiring Data

Data analytics tools can use any combination of artificial intelligence (AI), machine learning and natural language processing to analyze candidate information, track patterns and compare candidate data to in-house data in order to predict which candidates will perform more effectively.

With analytics, hiring managers and human resources personnel can understand which skills, experience and characteristics are shared by their top performers in any position or across the company as a whole. This information can be used to craft targeted job postings, improving the candidate pool so that less time is spent sorting through unsuitable candidates.

These tools are already in use at many companies to help manage the number of applications received. Yet they can also help optimize the interview process. For example, these tools can also help interviewers craft more insightful questions and standardize interviewing in order to compare candidates more easily.

Track the Right Metrics

Finally, shortening time to hire is about choosing the right metrics for your hiring process and organization as a whole. For instance, by tracking time to fill and time to hire separately, hiring managers and recruiters can more easily spot time-wasters within the hiring process.

A long time to fill may mean you’re having trouble finding the right candidates, while a lengthy time to hire may indicate that you’re finding good candidates but need to make decisions more efficiently.

Images by: Dane Deaner, jeshoots.com, David Yanumata