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It’s Time to Blow Up Time to Hire

by
Rob McIntosh
Jun 19, 2012, 5:50 am ET

The foundation of recruiting performance has been built historically on three core business metrics:

1) Cost Per Hire  = Can you recruit and do it with optimal financial investment?

2) Quality of Hire  = Can you recruit an optimal or better performer?

3) Time to Fill = Can you fill the position quickly?

For this discussion I am going to concentrate on the third one, time to fill, which is historically a calculation from the clock starting once the business comes to recruiting with a need, and then stops once the candidate is hired/or onboarded. I want to share with you the journey that the Avanade team and myself have gone on, and how we arrived at the conclusions that it was time to blow up the time-to-fill metric.

If you speak to a business leader they will tell you that one of the key indicators that they need to see from a recruiting function is how quickly we are filling the business demand. Simply, most companies primary existence is to grow, and growth is fueled by people. If you cannot hire the people quickly, then this impacts growth and revenue particularly in a professional services environment. Last time I checked, most companies exist to make money.

I found a few fundamental flaws in the time to fill metric:

It only really shows the beginning and the end date/time stamps as an average of multiple roles, and as we all know in recruiting, there are a lot of things that can go wrong in-between the moment you open a position and when you finally fill it. In short, the metric really does not help identify the “why” vs. “what.”

Is the reason that a role is taking so long to fill because of  the identification and attraction of that talent?

Is it because of how long it takes the business to assess, interview, and hire the candidate?

Does the metric account for proactive recruiting approaches where you pipeline talent ahead of the actual demand vs. reacting to just-in-time demand if an employee just resigned?

The real issue is if we want to add business value then we must go beyond capturing backward-looking data and move to analytical reporting where we can identify the outliers of peak over- or under-performance. So here is a visual of what we did.

Ere ttf slide
In summary, we broke out the requisition management framework into two parts: Sourcing/Pipelining Reqs and Open Business Demand Reqs. This breakout is deliberately intended to reflect the point in the hiring process where responsibility for maintaining an efficient process shifts from the recruiters (sourcing, candidate outreach) to the business (resume feedback, interviewer availability, feedback, offer decision-making, etc). In this way we can identify at what stage in the overall process any bottlenecks are occurring. This is what the new framework gives us:

TTH (Time to Hire) = Meeting the needs of different business realities

As we get more proactive as a recruiting function, we start to get line of sight around business demand that can be a multiple of quarters further out in our fiscal year. If the business tells us of their Q4 demand in Q1 of the fiscal year, we can start proactively identifying, attracting, and pre-screening candidates prior to that demand needing to be filled in Q4. Historically time to fill would have meant that a recruiter opened up a requisition in Q1 and the clock started ticking; when the business could actually hire that person based off business demand in Q4, the clock would stop. This meant that the time to hire would be nearly a year long.

But hold on a second: in this particular situation recruiting and the business worked proactively together, but the time metric would be telling a different story. So by simple changing the approach and creating an Open Demand req where the Req Target Hire date would be in the first week of Q4 (which is when the business says they can hire that person), then if we proactively source, screen, and get the business to proactively interview just prior to the actual hire date, then in fact the new time metric could reflect less than seven days against business demand.

When speaking and validating this with business leaders they agree that this approach is a true reflection of their business reality and recruiting’s role in optimizing the process.

This works just as well when you deal with a just-in-time position that needs to be filled if an employee left the organization. The clock starts when the business says they need the role filled (now) and the clock stops when the candidate is hired. In both approaches we can now analyze and separate by job family, geography, business unit, etc., on outliers for both proactive vs. reactive areas for optimization.

But to get to the real essence of an opportunity of “why” something is not as optimal as it could/should be we need to look at:

STI (Source to Interview) & ITH (Interview to Hire) metrics

As we all know in recruiting sometimes a role is difficult to fill because the type of candidate you are trying to find is not readily available in the market and takes time to identify and attract. Or there are times that the reason the role is taking too long to fill is because the business is taking too long to engage, interview, and make a hiring decision. In the old time-t0-hire approach where one metric and approach is designed to look at the entirety of the process and an average, this can become difficult to compartmentalize where the problems actually are. Is it a sourcing/recruiting and attraction problem, or is it a problem once the business takes over?

In short, by tracking source to interview, we can see if certain roles in the business require longer runways of identification and attraction (the date the candidate record is created in the database). In turn, we can go back to the business and explain that by giving recruiting a greater advanced view on this type of demand is more critical than other roles, we can proactively start building relationships with key talent well in advance of the need.

The other recruiting industry trend that we are all seeing is that the future of talent acquisition will be more focused on the building of longer-term relationships with talent vs. the identification of talent. By tracking the candidate (or lead … name/title/company) date in a database we will find instances (which I have already over the last five years) that some roles end up getting filled by candidates who were first identified and the relationship nurtured over 18 months ago. The more proactive a talent acquisition function becomes with workforce planning and succession planning, the more this scenario comes into play and is critical to the growth of a business.

ITH (Interview to Hire)

By tracking interview to hire, we can quickly identify the “why” outliers for both positive and negative reasons against roles, hiring managers, job families, etc.

Let’s say two hiring managers with the same business unit responsibilities differ on interview to hire, and when you dig into the “why” you find that one effectively hires candidates with three business interviews vs. the other does seven business interviews. This might be OK, but it could also be an opportunity to take the best practices of one hiring manager and apply them to another similar manager.

Another example is where one geographical region takes 3x as long on their interview-to-hire metric than another. When you dig into the “why” you find that the business interviews end up canceling or consistently rescheduling candidate interviews significantly more than the average –and the reason why. Once again, you now have the “why” that allows the conversation to be focused on the opportunity for improvement specifically to the situation vs. historically being challenged to identify the reason because it is buried in a broad average that includes both sourcing, recruiting, and the business.

Important Operational Note: I drew a line in the sand that stopped the calculation at when the candidate accepts the offer (hired). But we still can track when the candidate starts (turns up on the job) at the company, given countries have very different criteria around notice periods, which is not globally universal.

We recently deployed this new framework within the organization and we will be looking very carefully at the data in the ensuing months and years so we can not only start to determine benchmarks on these new metrics by company, country, job families, and hiring managers, but most importantly use the information to help drive greater performance for recruiting and the business.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  1. Paul Dodd

    Nicely laid out Rob, this aludes to the equally old subject of cycle times. Where components of TTH are broken out. Getting 2 way SLA’s set up with Hiring Managers is also old but rarely set up. God forbid that Recruiting has any authority to hold HM’s to their agreement :)

  2. Joseph Murphy

    Rob
    Thanks for the clear assertion on the need for metrics that focus on contribution and value-add.

    TTH is a sub-factor to more meaningful metrics: Time to Proficiency (TTP)and Cost to Proficiency (CTP).

    The goal of the business process called staffing should not be to fill a vacancy, but rather to ensure headcount to plan and competent performers in position.

    TTH, in some jobs can be highly valuable, such as sales territories that are vacant, or production jobs that are open. They are valuable, because the contribution gap is easy to measure from lack of productivity during vacancy.

    In efforts to improve TTP/CTP, a root cause analysis may show TTF as a contributing factor, or in the language of scorecards – a leading indicator.

    STI and ITH can also be useful in staffing process improvement initiatives, but again, are activity based, not outcome based metrics.

    Back in January, Kevin Wheeler wrote a great article on ERE that caused a good stir. It boils down to accountability. And, I re-assert: CEOs and CFOs do not hold the staffing function accountable for outcome-based contribution. And, as long as recruiters are arguing about activity based measures, it is further evidence that the value of the measures is in question.

    Does your CFO wonder if days outstanding is a valuable metric? Does your VP of Manufacturing wonder if waste is a valuable metric?  Does your CHRO wonder about or even measure staffing waste?

    I agree, dump TTF and focus on metrics that document staffing process yield as business contribution.

  3. Elad Hanns

    Thank you Rob. But “deployed this new framework, looking very carefully at the data, determine benchmarks on these new metrics”? Really? You are a good writer, but this is overly complicated.
    I’ve been recruiting in healthcare for more than 20 years, so maybe I see things differently since I’ve been blinded by this sector. I have found that there is a huge disconnect in the hiring process within most facilities. It’s people that are the problem… It’s communication… It’s leadership… Recruiting is automated, slow and is managed by HR reps who are not fully equipped with all the tools or time to source properly. The biggest issue is authority. These recruiters are typically given the “authority” to manage outside agencies, but they have NO authority when it comes to making a decision on hiring. To your point (Time to Hire): If they do not hear from the manager for 3 weeks after submitting them, they do not track them down and make something happen. I place this issue and fault directly at the feet of managment. Like all important factors in running a successful business, it’s about leadership and being connected to the process. You cannot have an HR rep in charge of recruiting important positions. Especially in healthcare.

  4. Howard Adamsky

    @ doud, you are right. Just try to hold a HM to an SLA. It is like the end of the world.

    @hanns, I agree in principal with your message. To key in on one point, giving one responsibility without authority is a fools errand. Aristotle spoke of rights and responsibility being in balance. Corporate America not only fails to do that, I suspect they do not even understand the premise. Good idea for an article on this one topic.

    Rob, great article. Time to hire is from days gone by. From a place that no longer exists and has very questionable value. We as a society are supposed to be perusing excellence. What if excellence takes another week to ten days? Is that a reasonable amount to invest in excellence? What is the value of an excellent hire?

    Time to hire is a bean counters mentality that is devoid of any real understanding of the human component. It is isolationary in its scope and clearly does not demonstrate that faster is better. Faster puts smiles on the faces of individuals who simply do not understand the nature of what we do. We are remained of this each time we go like hell, hire a mediocre candidate and wish we had been more nuanced and insightful in our thinking. Speed kills.

  5. Gina Cleo Bloome

    As usual Rob, you come along just when I needed some industry support for my premise that TTH and CPH are worthless metrics. I have been debunking Time-To-Hire for as long as I can recall. One simply can not apply engineering or manufacturing metrics to a human-based product. As long as candidates and managers have free will, metrics will only tell a small part of the story.

    Two of the KPI’s I focus on is Submission-to-Interview and Interview-to-Offer as those tell you if the recruiter is really on target with what the hiring manager is looking for. Less than 80% for the former and 50% for the latter tells you the recruiter and the hiring manager are not in sync and the job may never get filled.

    @Elad, I work in healthcare now but I have also worked in consumer product goods and and with Rob at Deloitte and so I have seen a variety of models. The issues you bring up were endemic to all of those environments. Convoluted hiring process and managers who don’t know what they are looking for, are unavailable or can’t pull the trigger are not unique to any industry.

  6. Keith Halperin

    Recently, there’s been some progress in developing an accepted standard for COH (there’s a “standard”- whether it will be “accepted” is anybody’s guess). I look forward to the development of something similar for TTH or STI (Source to Interview) & ITH (Interview to Hire). Pending that: you should try and define it so that you and your boss are cast in the best light….

    Cheers,

    Keith

  7. Michael Glenn

    I think you’re right on Rob. The ITH stage is where collecting recruiting data is critical in order to improve performance and making changes in the process.

  8. Rob McIntosh

    One additional point to consider given some of the comments. I have never been a big fan of TTF given it potentially put’s pressure on speed which can adversely impact quality.

    But…..If you speak with most business leaders, they do care about speed (I won’t go into a lengthy response on why as I am hoping most of you already know), cost and quality. Even though speed has the potential to have a negative impact elsewhere, it is our duty to provide our customers with a focus on elements that help them run the business more effectively. What is critical IMHO is not just providing data on the subject but a meaningful story of what might need to change or improve to fix speed and quality and cost.

    My 2 cents on the subject

  9. Charles Carbajo

    Awesome article. This is useful information which allows hiring managers to see the process from requisition to start date.

  10. Richard Araujo

    It’s a simple thing really: Time to Hire is a measure of efficiency, Quality of Hire is a measure of achievement. Get the latter right and then find ways to get the former down. There are plenty of proximate causes as to why a REQ may be delayed, however Elad is right and the ultimate cause IS always lack of leadership. Of course, not everyone is looking to lead a process, and in those cases someone else needs to take the reigns and push for results. Or, task someone to do so and give them the authority they need to make things happen.

    Neither of which is likely to happen any time soon, unfortunately.

  11. Keith Halperin

    Time to Hire, Quality of Hire, Cost of Hire: pick any two…

    Keith

  12. Glenn Gutmacher

    This is great to see 20th century recruiting metrics being revamped for the 21st century. Once we start measuring the right things (i.e., the ones that lead to the “why” answers like Rob is talking about), then we can make some real improvements. When HR and recruiting are trying to earn a seat at the table with the business lines, it is essential to have this kind of data available so we can base our conclusions on substance and the needed action steps will get the support of our non-HR counterparts.

    It reminds me also of the Prince Charles-led sustainability project (hold off on those regal beagle jokes – this is actually a good thing he’s doing: http://www.accountingforsustainability.org ) to allow for sustainable world development. HRH’s speech to launch it said part of the mission was “to help ensure that we are not battling to meet 21st century challenges with, at best, 20th century decision making and reporting systems.” So kudos, Rob, for applying that thinking in another context specific to our industry!

  13. Gina Cleo Bloome

    Is it me or is anyone else tired of HR having to “earn a seat at the table:”? If we don’t have one by now we ain’t getting one.. Does any other department have to “validate” their worth on such a consistent basis?

    Bit codependent isn’t it?

  14. Glenn Gutmacher

    Gina, with all due respect, I have to disagree: There are plenty of companies where HR and recruiting leadership have not been measuring the right things, but when they got folks in place who started doing it right, they eventually did get the respect. Look at the stories of the HR executive of the year winners for the last several years (http://www.hreonline.com/HRE/rankings.jsp) and you can see these people were transformative because they understood what it took to become a true advisor aligned with their business whose division could impact the bottom line. But I will give you the point that other departments (sales, marketing, etc.) may not have to fight quite as hard to earn their spot. Kind of reminds you of the bias against diverse executives who have to go through hoops to get to the top, eh? In any case, the “leaders” who don’t step up to the plate in those functions will be canned eventually at most companies.

  15. Gina Cleo Bloome

    Glenn, I agree but my point was “why at this point, do we still have to fight harder?” I have often asked if a CEO would expect to consistently underfund and misunderstand Sales the way they do Recruiting and expect to have superlative results.

    One of the challenges is that everyone who has ever interviewed think they know how to hire. I reminded one Controller that though I had managed my checkbook since I was 15, it did not make me a Controller.
    Snarky but effective analogy.

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  17. Nancy Robin Gillman, MBA, SPHR

    I discussed these 3 metrics in my article,“HR Metrics in Perspective”, http://www.humanresourcesiq.com/metrics/articles/hr-metrics-in-perspective/, Human Resources iQ

    Check it out and note how I account for time to start vs. time to hire. I do not think we can just blow time to hire out of the water as this is part of the project management equation: time, money, and quality. Also, it points to problems in the system/process that can be easily quantified and discovered.

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