Sourcing

The True Cost of Hiring Too Slowly

Hire slow, fire fast. How many times has your manager said that to you?

The phrase is embedded within the psyche of recruiting departments across the globe. It’s accepted as a fundamental hiring truth.

But what if it’s wrong?

What if hiring slowly is actually damaging your company’s chance of success and hurting your bottom line?


The rising time-to-fill

In 2015 we’ve all been hiring pretty slowly.

The US average ‘time-to-fill’ has hit all time high, with companies taking an average of 27 working days to make a new hire.

As you can see from the chart below, average vacancy periods are now higher than the heady levels of 2001 the first year that Dice began tracking this data

Average time to fill

Source: http://dhihiringindicators.com/[image-caption-end]

Why is this?

**i The skill shortage**

There’s a shortage of workers with the right blend of skills and experience.

The changing nature of many offices has put technological expertise at a premium, and there simply aren’t enough workers to go around.

ii Companies aren’t designed to hire fast

Making a new hire takes time.

Even after sourcers have found a qualified candidate, there is a lengthy interview and screening process, often followed by contract negotiation.

You can’t just pull the trigger on a new hire no matter how great they are, there are a lot of people who need to sign off on your candidate first.


Why time to fill is losing you talent

How many awesome candidates have you missed out on?

Recruiters are like fishermen, we all remember the ones that got away!

This is mostly because top talent doesn’t stick around. The best candidates are inundated with recruiter requests and offers - no wonder they’re off the market within 10 days.

If your organisation draws out the process and can’t move fast enough, you’re ultimately likely to miss out on a lot of high quality people.

Best candidates are gone in 10 days


Why time to fill is costing you money

Hiring is an investment in the future of your company. Getting the right people through the door has a huge impact on your chance of future success.

It can be an expensive investment though, the average cost per hire has risen to $4000.

Average cost per hire

[image-caption]Source: http://www.bersin.com///uploadedFiles/042315-ta-factbook-wwb-final.pdf[image-caption-end]

Typically this is the main metric that we use to evaluate the cost of hiring. It takes into account things like advertising spend, internal recruiter costs and agency fees.

What it doesn’t take into account though, is the huge cost of having unfilled jobs on your books.

For every day that you have an open position, you are paying a huge cost in potential revenue and productivity.

This ‘true cost’ could be higher than you think. Let’s look at some figures from the US.

True Cost of Unfilled Jobs USA[image-caption]Source: https://fortunedotcom.files.wordpress.com/2014/11/report-empty-desk-final-.pdf[image-caption-end]

Organisations that have multiple open roles are practically burning money.

This is particularly significant if the vacancies are in revenue generating roles like Sales. Companies could be losing as much as $5,000 per day, simply because a vacant seat in a sales job can’t create revenue.

This is a huge concern for companies. 60% of employers admit to being very concerned with the cost of unfilled positions.

Employers concerned with the cost of unfilled jobs[image-caption]Source: http://thehiringsite.careerbuilder.com/2014/03/06/cost-of-unfilled-positions/[image-caption-end]

Often, they try to ‘buy’ their way out of the situation by offering candidates more money and better perks, driving up the cost per hire.

It’s a tricky situation, but one thing is clear:

Hiring too slowly and have positions ‘unfilled’ for too long has a serious negative effect on your bottom line.

What are the steps that you can take to speed this process up?


Stop wasting time doing data entry

Data entry is a grind.

It’s universally resented. It might be necessary, but we can all agree it’s dull!

Do you know how much time you waste every year adding data your Excel spreadsheets or your old-fashioned ATS?

It might be more than you think...

The annual cost of data entry
These figures are based off an average salary of $74,000, and a recruiter taking an average of 2 minutes for every page of data entry. [image-caption]Source: http://www.bullhorn.com/blog/2014/08/inefficient-recruiting-processes-yield-downtime/[image-caption-end]

The hidden cost of data entry is huge.

It robs recruiters of time that would be better spent finding and speaking to great candidates.


How can you fix this?

If you’re comfortable outsourcing data entry, you can find cheap freelance workers using agencies like Upwork.

Otherwise it makes business sense to use a recruitment solution that keeps data entry to a minimum.

Beamery helps sourcers and recruiters work faster by removing data entry from the equation. We sync every candidate’s most recent social and professional information and automatically add all relevant emails and calendar events.

Beamery Stream & Mini Profile

We showcase this feature on our website because we firmly believe in making productivity a priority.

Whatever solution you choose, make sure that you value your own time appropriately. Does it really make sense for you to waste 20,000 minutes a year inputting data?


Plan for the future and create a hiring pipeline

Keeping an active hiring pipeline or ‘talent pool’ can dramatically reduce time-to-fill.

It’s a simple workflow to create and maintain, particularly as every company already has a database of candidates ‘on file’.

The main change though, is the way you treat that database or ‘talent pool’.

Your database should be your first port of call when you’re trying to fill a new role.

Why is this?

Well, for starters, it’s a fantastic source of candidates that already have a relationship with your brand.

Providing you gave them a good candidate experience, they are also likely to have a positive impression of your company, they did apply for a job with you after all!

You may also have a good range of quality candidates who you didn’t hire purely because it was bad timing. For example, great sales prospects who applied at a time when you weren’t hiring actively.

Even candidates that you previously turned down are likely to have greatly improved since you last contacted them!

The only issue is knowing which candidates might be open to new opportunities particularly when most companies have a lot of people on their books.

We have a smart CRM that gives recruiters unique insights into their talent pool. We use data science to show recruiters exactly who their most engaged candidates are and exactly who to prioritise when trying to fill open roles.

Beamery CRM

It might be that your talent pool doesn’t produce the results you want and you have to go down the normal route of paying for job ads and scouring LinkedIn for candidates.

With the right tech though, it might be possible to find someone in your database who is the perfect fit, and half your time to fill!

If you think Beamery could be the right platform for you, feel free to start a free trial.


Summary

How much money could you save by hiring a little faster?

It’s a question that all organisations should consider when they look over their hiring strategy.
Reducing time to fill by making basic changes to your recruiting workflow will give your bottom line a boost, and will help you move fast enough to hire the high demand candidates that are only on the market for a matter of days.

Ben Slater

VP Marketing

Ben Slater leads marketing globally at Beamery. He typically writes about the future of work and talent transformation.

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