Receive daily articles & headlines each day in your inbox with your free ERE Daily Subscription.

Not logged in. [log in or register]

The Top 12 Reasons Why Slow Hiring Severely Damages Recruiting and Business Results

by Apr 21, 2014, 12:14 am ET

A candidate from a well-known benchmark firm dropped out of our search for a General Manager position because the hiring manager took a week to respond to his interest. He said…

It’s not like I need their job. If it takes them a week to respond to a resume like mine for a job of this importance, they’re not the kind of company I want to work for. I move fast, and I can already see that my style wouldn’t fit their culture. –Wind River Associates

As a corporate recruiting leader, know that in a highly competitive college marketplace, there may be nothing that damages corporate recruiting results more than slow hiring.

Many firms now go the first step and track some variation of the “time-to-fill” metric. But despite that metric, not only are firms still almost universally guilty of painfully slow hiring, but to compound the problem, few recruiting leaders truly understand the many negative business and recruiting impacts that result from slow hiring. I estimate that the impact at most corporations exceeds tens of millions of dollars each year. And the dollar loss from this factor may be as much as 10 times higher than losses resulting from low recruiting efficiency related to the more popular “cost-per-hire” metric.

It’s not enough to be conscious and aware of slow hiring. Identify and then quantify in dollars each of the negative impacts of slow hiring, so that everyone from the CEO on down will support the streamlining of the process. After several decades of work on “speed hiring,” I have put together an extensive list of the negative consequences associated with taking too long to hire. The top 12 most damaging factors are listed below.

The Top 12 Reasons Why “Slow Hiring” Damages Recruiting and Your Business Results

The negative impacts resulting from slow hiring are numerous. The most damaging ones are listed here in descending order of their negative impact.

  1. You will lose most of the candidates who are in high demand during the late stages of your recruitment process – when currently employed top performers decide to enter the job market, they are likely to be quickly inundated with recruiting requests and offers, which means that often they will only be on the job market for a matter of days. So if you/your firm drag out the hiring process over time, the most sought-after prospects (i.e. in-high-demand prospects) will have many opportunities to make quick offer acceptance decisions while you are still only midway through your hiring process. Your top candidates assuredly will receive alternative offers and will be forced to make a decision as to whether to accept “a current offer” that will soon expire, rather than to wait for “a possible future offer” from your firm. So even if you capture them as an applicant, the odds of them still being available when you reach the late stages of an extended recruiting process is almost zero (with the one exception if you happen to have a powerhouse employment brand like Google). My research indicates that the top 10 percent of candidates are often gone from the marketplace within 10 days. I also estimate the recruiting loss from missing a single game-changer, purple squirrel, or innovator recruit to be over $1 million each. The lesson to be learned is: that speed of hire is most important when you are competing against other firms for currently employed “in-high-demand” top talent. You simply must hire fast, because if you don’t, the competition will take this top talent off the market before you have the time to make a hiring decision. For example if Tiger Woods decided to leave his golf team, he would be in such demand that he might be in and then out of the job market in as little as a few hours, so a 30-day hiring process would have no chance of success..
  2. Unfortunately slow hiring does not improve the quality of those who you hire – you might assume that taking more time to make a hiring decision would result in better hires, simply because you had more time to gather information, to gather feedback, and to mull over the finalists. Unfortunately slow hiring has the opposite effect. The longer you take, the lower the quality (i.e. the “on-the-job performance” of new hires) will be. The primary reason for this drop off, as mentioned in the first section, is that with an extended hiring process, all of the top candidates will likely drop out, leaving only weak ones to choose from. Most managers don’t realize that the secondary impact of having all of the top candidates drop out is that the remaining candidate pool (that you will eventually hire someone from) may now only contain average and weak candidates. As a result, the extra time for decision-making is negated by the fact that you only have average candidates to gather that information on. Unless you measure how quickly the quality of the candidate pool drops over time, you probably won’t realize how damaging delayed hiring can be. You can easily find out how long it takes before the top candidates drop out by first identifying the top 10 percent of your applicants and then periodically contacting each of them to see how many days pass before they move on (it is usually between 10 and 20 days). The lesson to be learned is: that slow hiring may actually doom your firm to an extended period where you only hire average or slightly above-average candidates. Recruiters may offer the excuse that the weak applicant pool that they presented is a result of the highly competitive marketplace, but in many cases the actual reason may be a slow hiring process that only exists at your firm.
  3. You will lose significant revenue and productivity because vacant positions are open for too many days – a stretched-out hiring processes means that vacant positions go unfilled for months. Although some mistakenly think that having position vacancies saves salary dollars, smart leaders instead calculate the damage caused by what are called excessive “vacant position days.” For example, the economic damage caused by having a revenue-generating position vacant longer than necessary may be as much as $5,000 per day simply because a vacant seat in a sales job or revenue collection job can’t create or capture revenue. Vacancies in mission-critical jobs may mean that some critical work will actually stop during these unnecessary position vacancy days. For example, if an airline has insufficient pilots for each of its planes, it would lose revenue from each of those canceled flights. The pharmaceutical firm Merck found that having vacant positions in its R&D function had a direct measurable impact on the time it takes to develop new products for the market. Shifting to management, team lead, and other key jobs, having no one in the job for an extended period of time will mean that productivity and output will suffer. In jobs where quality matters, error rates will increase and the quality of the output may also suffer because you have temps or other employees filling in as best they can while the position is vacant. The lesson to be learned is: that each unnecessary position vacancy day has a significant dollar impact on productivity, innovation, and revenue generation. And because the Boston Consulting Group proved that having great recruiting has the highest impact of all talent functions on revenue and profit, it only makes sense that “slow hiring” (which is obviously not great hiring) will dramatically reduce both of those impacts by a measurable amount.
  4. You’ll have to pay new hires more in salary because they will be bid on – when currently employed top talent enters the job market after working at the same firm several years, it is unlikely that they will know their real value right way. So if you are the first firm to approach and hire them before other firms have a chance to make a bid, in most cases they will accept your initial salary offer with little or no haggling. However, if you have an extended hiring process, there will be ample time for other firms to recruit these same top candidates. And once multiple firms start fighting over and literally bidding on one of your candidates, their salary demands will invariably increase once they realize their true market value. The lesson to be learned is: that if you make fast decisions before there is any competition for an individual, you may be able to pay as much 25 percent less than you will have to pay after several firms have praised and bid on them.
  5. Your image of being slow decision-makers will cause you to lose many top prospects – we already learned that delays will cause you to lose many top prospects and applicants, but you should also be aware that the appearance of slow decision-making will also damage your hiring results. This is because many top prospects and candidates view the long time it takes a firm to reach a hiring decision as emblematic of your corporate culture and what business decision-making is actually like at your firm. Because by definition, most top talent are fast and accurate decision-makers, it is highly likely that they will view slow hiring decisions as an indicator that once on the job, business decisions will be made just as slowly. A similar negative recruiting business connection may also be made by candidates if they see a lack of innovation in the recruiting process. The lesson to be learned is: that many candidates view their first and only interaction with the firm (i.e. the recruiting process) as an indicator of what it’s like to work there. So if commenters on glassdoor.com rate your recruiting process as slow, expect it to have a negative impact on recruiting.
  6. Slow hiring will reduce applications because it will damage your external employer brand image and the candidate experience – one of the primary contributors to effective hiring is having a great external employer brand image. I’ve already highlighted how slow hiring will cause you to lose many top candidates, but you should also realize that slow hiring will also hurt your brand image, which in turn will reduce the number and quality of the applications that you receive. Unfortunately, slow hiring will hurt your brand image because having a slow hiring process will be quickly and frequently revealed on social media. For example, glassdoor.com entries not only list problems with the hiring process, but they almost always reveal how long it takes in days to complete the hiring process. It simply doesn’t help your employer brand when prospects find conflicting information, where you are praised for many talent factors but criticized for slow hiring. A long, drawn-out hiring process will also negatively impact your candidate experience, which is another topic that gets a lot of attention on social media and in job-seeker-related blogs. With these two factors combined, you must expect that slow hiring will damage your image, and as a result, you will get fewer high-quality applications and almost none from individuals who need to make a job switch decision quickly. The lesson to be learned is: in a world full of social media, that you can’t expect to keep “being painfully slow” hiring a secret from potential applicants.
  7. Slow decisions will cause you to lose a high percentage of “head-to-head” talent battles for top candidates — one of the goals of most functions (and recruiting is no exception) is to provide their firm with a competitive advantage. In recruiting, having a competitive edge allows your firm to win a disproportionately high number of head-to-head talent battles with your top talent competitors. The inability to make fast hiring decisions on highly sought after “decisive candidates” who know what they want will cause them to choose the talent competitor that meets their needs first. The cost of losing a head-to-head battle is extremely high. This is because when you lose top-performing talent directly to a quick-acting competitor, its productivity and innovation rates will rise immediately, while at the same time, the productivity and innovation at your firm (which still has a vacant position) will remain low. The lesson to be learned is: that speed hiring gives your firm a competitive edge in head-to-head talent competition. And by acting quickly, not only will you capture a higher percentage of top performers, but you will simultaneously keep that top talent away from your competitors.
  8. Slow hiring dramatically reduces hiring manager and recruiter excitement – another major factor in great hiring is a high level of hiring manager involvement and excitement. Many in recruiting complain about the apathy of hiring managers; however, one of the primary reasons that causes managers to give a low priority to recruiting is the weak effort-reward connection. Slow hiring processes mean that managers have to put in a lot of time and effort upfront but they don’t received their “reward” and the impact of their work until months later (when someone actually starts). Hiring managers should also be made aware that in many firms, should there be a hiring freeze, layoffs, or budget cuts, a protracted hiring process may mean that they actually lose their vacant position permanently. The lesson to be learned is: that fast hiring reduces that period of time until new hires start, so both impatient managers and recruiters are more likely to be excited because they see and understand the direct connection between a short recruiting period and a new hire beginning the job. And based on what recruiters tell me, they hate slow and bureaucratic hiring processes, so if you want to hire and retain great recruiters, speed up the process dramatically.
  9. Your customers and employees will also feel the negative impacts of slow hiring – you can’t be myopic when it comes to the impact of slow hiring. Recruiting leaders must understand that when a position is vacant for a long period of time, many will suffer. Customers will certainly be able to notice that extended vacancies in customer service positions will result in degraded and slower service, because there is literally no one in the chair or that less experienced and capable temps will have to be used as fill-ins. Your employees will also notice because they will be asked to do double duty and/or overtime, which will negatively impact their morale and retention rates. Employees who came from other faster-hiring firms will get frustrated because they know that these extended vacancies aren’t necessary. The lesson to be learned is: that recruiting leaders must fully understand and then calculate in dollars the broad negative business impacts that excessive position vacancies can have on both customers and employees.
  10. If you are targeting “passive prospects,” realize that slow hiring may result instead in the hiring of actives – based on the premise that most desirable top performers are currently employed and well treated, many recruiting functions have begun to target the so-called “passive prospects” (this is a misnomer because these individuals cannot accurately be described as passive). The so-called passives may take a long time to decide to leave their current job, but hiring managers must realize that once they indicate even a potential interest in another job (for example merely updating their LinkedIn profile) they will be pounced on immediately by recruiters and employees seeking to make a top-quality referral. The net result of this high interest is that passive prospects will not be in the job market for very long. To make matters even worse, failing to make a hiring decision quickly will allow their current boss time to make a compelling counteroffer to stay. The net result is that extended hiring processes simply have a low probability of capturing these highly desirable passive prospects. In fact, a slow hiring process may give your firm a zero chance of hiring anyone who becomes “suddenly available” and who is in the job market for less than three weeks. The key lesson to be learned is: that because slow recruiting processes are not capable of hiring these targeted passives, firms with painfully slow hiring processes generally end up with literally 100 percent of their hires coming from the active job seeker pool. When hiring these active job seekers, speed is less essential (because they have fewer choices), but even then, slow hiring decisions means that you will likely lose the best from among these active job seekers.
  11. An extended hiring processes can significantly raise “hidden” hiring costs – if your lengthy hiring process is a result of requiring an excessive number of interviews (more than four), the cost of hiring will go up because much more management, recruiter, and employee time will be spent interviewing. These added costs are often “hidden” because they are not included in the standard cost-per-hire calculation. If your process also unnecessarily requires more people to sit in on each interview, if it requires more than the top three candidates to go through interviews, or if each interview has a scheduled time that is longer than necessary, your hidden costs will go up as more employee time is devoted to hiring, rather than their normal duties. Hiring processes are unnecessarily longer and thus more costly for variety of additional reasons. Typically hiring processes are extended because they require that you run job postings longer, they require you to give internal candidates first choice, they require excessive requisition approvals or they include too many administrative steps. The lesson to be learned is: unnecessary elements in an extended hiring process can directly increase hidden costs by requiring recruiters, hiring managers, and employees to spend unnecessary and unproductive time on low-value aspects of recruiting.
  12. Using standard speed-of-hire metrics can severely mask slow hiring problems – most firms are satisfied with simply measuring the average number of days it takes to make a hiring decision. Unfortunately, using a typical time to fill or time-to-start metric alone can hide the actual damage caused by slow hiring. First of all, measuring and reporting the average time is misleading because it may mask the fact that although your average hire time is good, the hiring time for in high-demand top prospects and for revenue-generating and mission-critical jobs may actually be miserable. Executives and recruiting leaders should realize that the primary reason that you reduce hiring time is specifically because you are seeking higher-quality hires. So, if you don’t effectively demonstrate the direct connection between these two factors (i.e. how each day of reduced hiring time increases the quality of hire by__ percent), then you are making a huge mistake. Measuring hiring speed and hiring quality can also reveal the few unique cases where fast hiring actually increases hiring mistakes. And the final common metric omission is not working with the CFO’s office to quantify the lost dollars that it costs the corporation for each day that the hiring process is longer than necessary. For large corporations and especially firms in fast-moving industries like high-tech and the mobile phone, I estimate that the impact for each unnecessary day added to a hiring process can easily reach $1 million. The lesson to be learned is: that it is critical that everyone understands that you must have speed metrics that demonstrate that in recruiting “Speed doesn’t kill new hire quality … but slow does!”

Final Thoughts

You certainly won’t impress senior executives with a slow and cumbersome hiring process that routinely misses top talent. On the surface, the need for hiring fast might seem like an easy concept to understand, but in reality, it’s quite a complex issue.

If you don’t yet understand the impact of slow hiring, perhaps an analogy will help. The high school prom makes an excellent analogy. It is common for most students to ask the most desirable prospects to be their prom date within a week or two of the prom announcement. But what if you decided instead to wait for 47 days to ask (the average time it takes a corporation to make a hiring decision) a desirable prospect for a date? What would the probability be that after 47 days your top three choices would still be available to say yes to your late offer?

Recruiting is a lot like acquiring a prom date. If you wait 47 days to make a selection decision, you must realize how relatively “ugly” your new hire is likely to be!

*Speed hire tools — Obviously fast decision-making could inadvertently lead to bad decisions, so in recruiting it’s important to have the right strategies and tools for “speed hiring.” Although I haven’t discussed them here, if you are interested in knowing more about the most effective speed hiring approaches, I encourage you to come to my “speed hiring” session at the exciting ERE conference being held later this week in San Diego. I promise you that it will be worth the trip. And after the session, I would be glad to sit down and talk more in depth about your slow hiring issues.

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.

  • http://www.turningpointsearch.net Ken Schmitt

    Dr Sullivan, this is a fantastic breakdown of a very common problem. As the owner of a boutique search firm, I am constantly addressing this very issue with many of my clients. We try and try again to educate our clients on the importance of being decisive and focused in their search, only to be hit with “Our process is our process, and we are not willing to change it just to hire a strong candidate. The candidates need to fit into our process, not the other way around”. Of course, their very next question is “Why can’t we seem to attract better candidates, and why do we continue to lose our lead candidates to other jobs?” Hmmmm, I wonder!

    Ken Schmitt, Founder/President
    TurningPoint Executive Search and the
    Sales Leadership Alliance
    http://www.turningpointsearch.net

  • Richard Araujo

    Dr. Sullivan,

    Interesting article as always.

    A quick method for tracking time to hire in a way that matters is to tier your hires by salary and track your time to hire metrics on each tier, assuming the higher salaried positions are of higher value. I used to use a 5 tier system, 0-4, 0 being lower level hires like interns. From there they were broken into salaries up to 25K (1), up to 50K (2), up to 75K (3), and everything over 75K was tier 4. Also, a quick standard deviation metric on each tier will let you know how close to the mean all your data points are, or if they’re spread out indicating a highly variable process which needs attention.

    As long as you have a basic ATS that can spit out this info like time to fill and salary, it’s very easy to have a report whipped up in Excel in ten or twenty minutes with all this information, with another ten minutes to make it look pretty if anyone wants to see it.

  • Keith Halperin

    Thank you, Sr. Sullivan. You have thoroughly and carefully elaborated upon a point which is quickly obvious to the newest and most ordinary recruiter, but evidently not to those who manage them, else you wouldn’t have given this advice. This again shows the tragic disconnect (and unwillingness to internally solicit valuable, practical information) of those who create/oversee recruiting’s problems (the Founders, CXOs, Sr. Executives, and many hiring managers) from those of us who actually do the work and try to solve them.

    Cheers,

    Keith

  • http://www.onewirtzrecruiting.com felix martinez

    Dr. Sullivan,

    Thank you for the great insights on the impact of slow recruiting. I have always suspected this was the case, however, did not have the research to support my intuition. I am particular interested in learning more on your second point, “Unfortunately slow hiring does not improve the quality of those who you hire”. Can you please guide me to find more literature that supports this statement?

  • http://www.sensiblehiring.com Jim Patton

    As with most things, the more time spent in preparation, the faster you are able to make needed decisions. By spending more time in job analysis, and by using candidate assessment technology instead of resume processing, you will quickly funnel a large applicant pool into a small, highly-qualified final candidate pool that consists of highly functional job performers instead of image makers.

    If you have to spend a lot of your time meeting about and mulling over the candidates you attracted, you didn’t prepare well enough for the hiring process.

    Dr. Jim Patton
    Sensible Hiring, LLC
    http://www.sensiblehiring.com

  • Claudia Samuelson

    Dr. Sullivan, thank you so much for this much needed article. @Ken, I feel your pain.
    In an earlier post I referenced that I ask a lot (some people say I ask too many) of questions. I’ve found that if the hiring folks at my client companies can’t answer these questions then perhaps they won’t know the right candidate because they haven’t thought out what they need, what they want, and what is necessary for their particular culture and roles. As always, I love hearing your perspectives!

  • Sven Suhrbier

    Can’t agree more with the article. I was last year approached by a top class recruitment firm regarding a C-level role. After providing lots of personal confidential information no move for several weeks. Only on request I received “updates” such as “client still not decided with whom he likes to conduct interviews”. – After four months I informed the recruiter, to instruct his client, to remove my data from their records, I am no longer available for discussions. Also not for the recruiter, who hasn’t stopped the process with that client by himself.

  • http://www.mastech.com Kevin Pochapin

    Dr. Sullivan,
    Thank you for highlighting an important point that impacts our business every day. My company, Mastech is an IT Staffing firm that places contract and perm hires. We have several clients where we sometimes time loses top notch candidates based on the hiring process. I am also starting to recognize that we have our own internal challenges that may be having the same effect when hiring sales and recruiting professionals internally to Mastech. Our internal hiring process includes several aspects of the TopGrading methodology along with the use of a tool called Predictive Index for assessing key behavioral attributes. We have been able to improve the overall quality of our new hires as evidenced by an increase in the % of new hires achieving quota. That being said, in order to keep pace with the growing demand and maintain bandwidth necessary to support our customers, we need to move quickly. Would you have any thoughts what a reasonable or “Best Practice” time frame would be for an IT Staffing firm to hire a recruiter once the position is approved and assuming candidates are available and actively? engaged?

  • http://drjohnsullivan.com Dr John Sullivan

    “Would you have any thoughts what a reasonable or “Best Practice” time frame would be for an IT Staffing firm to hire a recruiter once the position is approved and assuming candidates are available and actively? engaged?”

    Kevin

    Once again to find out precisely when you are losing top prospects or candidates due to slow hiring speed you need to make periodic calls to see when they begin to drop out and when all of the top ones are gone. In your case I would estimate anything longer than 10 days would be damaging.

  • Pingback: healthy eating for children video

  • Pingback: Ladies summer clothing clearance

  • Roberto Martinez

    Although I agree with most of the reasons about why slow recruiting damage your business on revenue, work done and so. There are companies that are very successful on attracting talent and having a slow process actually helps them to make sure that both candidate and company feel comfortable during the process. I am curious about what are the common reasons that delay the recruiting process in most organizations. Anyone?

  • Pingback: just click Saintpierreandmiquelonnews.info