How do you evaluate and benchmark your hiring performance and ROI against your competitors and peers?

1 What is time to hire?

Time to hire is the average number of days it takes to fill a vacant position in your organization. It starts from the moment you publish a job opening until the moment the candidate accepts your offer. Time to hire reflects the speed of your hiring process and the quality of your candidate pool. A low time to hire can indicate that you have a strong employer brand, a streamlined application process, and a responsive hiring team. A high time to hire can signal that you have difficulties finding and engaging qualified candidates, or that you have a lengthy and complex hiring process.

2 What is cost per hire?

Cost per hire is the average amount of money you spend to hire a new employee. It includes both internal and external costs, such as advertising, sourcing, screening, interviewing, testing, background checks, travel expenses, referral bonuses, and recruiter salaries. Cost per hire reflects the efficiency of your hiring process and the return on investment (ROI) of your recruitment activities. A low cost per hire can indicate that you have a cost-effective and optimized hiring process, and that you use your resources wisely. A high cost per hire can signal that you have a wasteful and expensive hiring process, or that you face a competitive and scarce talent market.

3 How to calculate time to hire and cost per hire?

To calculate time to hire, you need to track the date of posting and the date of acceptance for each job opening, and then divide the sum of the differences by the number of hires. For example, if you hired 10 people in a month, and the total time to fill all the positions was 300 days, your time to hire would be 300 / 10 = 30 days.

To calculate cost per hire, you need to track all the expenses related to your hiring process, both internal and external, and then divide the sum by the number of hires. For example, if you spent $50,000 on hiring 10 people in a month, your cost per hire would be 50,000 / 10 = $5,000.

4 How to optimize time to hire and cost per hire?

To optimize time to hire and cost per hire, you need to analyze your hiring process and identify the areas where you can improve. You should define your hiring goals and criteria clearly and align them with your business needs and culture. Additionally, use data and analytics to measure your hiring performance and identify bottlenecks and inefficiencies. Leverage technology and automation to streamline your application process, reduce manual tasks, and enhance communication and collaboration. Optimize your sourcing channels and methods to reach and attract more qualified and diverse candidates. Moreover, implement a structured and consistent interview process that evaluates candidates objectively and fairly. Additionally, provide timely and constructive feedback to candidates, keep them engaged throughout the hiring process, negotiate offers quickly and competitively, and follow up with candidates until they join your organization.

5 How to benchmark time to hire and cost per hire?

To understand how you stand in the talent market and gain a competitive edge, you need to benchmark your time to hire and cost per hire metrics with those of your competitors and peers in your industry, location, and size. You can use various sources to find benchmark data, such as industry reports and surveys, online tools and platforms, as well as networking and peer groups. Optimizing and benchmarking these metrics will help you improve your hiring process and outcomes, while demonstrating the value of your recruitment function.