As the earliest proponent of speed of hire, I am pleased that so many managers and recruiters have come to the realization that reducing the time that it takes to hire someone is critical if you want to 1) get currently employed top performers and 2) minimize the “damages” that an open position can have on productivity. At the same time, I am also disappointed that the metric that most HR departments have developed to measure results in this area is “time to fill” (T2F). In this case, the most common industry practice may not be the smartest practice. Instead, the correct measure to use is “need date,” which is the percentage of hires completed by the managers specified “need date.” Let me explain why “need date” is a superior measure. “Measuring the number of minutes it takes to cook dinner never tells you whether the food was actually ready by dinner time, anymore than knowing the time duration of a flight tells you whether it arrived at the gate on time!” What Is the “Need Date” Metric? The “need date” is the date that the manager specifies when he or she needs the new hire to start their job. Filling a job by the need date reflects whether managers are getting the employees they need on time (as opposed to too early or too late). The commonly used metric, “time to fill,” in contrast, is just a measure of the number of days it takes to complete a hire. T2F is a weaker measure because it never addresses whether the person is hired in time; instead, it only tells you the total days between the requisition and the start date. By tracking the percentage of fills on the need date you are measuring the percentage of times that recruiting produces the hire on (but not before or after) the date they are actually needed. The percentage filled on the “need date” (on time) is a superior measure, because it encourages recruiters to complete all hires when they are actually needed, rather than blindly attempting to fill all jobs faster, no matter how inappropriate that may be. Difficulties in Using the Time-To-Fill Metric When shortening the time to fill is your major goal, you are likely to ignore the critical date on which a manager actually needs the new hire to start. The time-to-fill metric has the net effect of forcing you to hire everyone within a set time-to-fill target (e.g. 40 days) and to ignore the actual date in which the new hire is really needed. The T2F metric has some negative consequences. For example, if your T2F target is 40 days, requisitions with new hire dates that are 20 days away might not actually be filled until 40 days (20 days late). Requisitions with new hire start dates of 60 days away might also be hired in 40 days (20 days too soon!). The net result in both cases is that productivity would suffer because the employees would not be available when they were actually needed. With T2F, by speeding up the hiring for all requisitions, you discourage or even prevent recruiters from putting a lower priority on requisitions with a far off need date and a higher priority on requisitions with a very close need date. So in the case when a manager has an urgent need for a new hire to start within, say, 15 days, the recruiter has no incentive to meet that manager’s urgent need. In contrast, by using the need-date metric you encourage recruiters to place a high priority on the immediate needs because they are measured on the percentage of hires that occur on the actual day they are needed. Problems With Providing Recruits Too Late Even though many organizations request managers to specify a need date, most recruiters ignore it, because they are not measured or rewarded for hitting it (Note: if you don’t currently ask for it, it is important to add the need date to the requisition process and your ATS system). But even when recruiters are provided with the need date, there is overwhelming pressure (as a result of the “time to fill” metric) to treat all requisitions equally when it comes to speed. Some of the many consequences of hiring too late (after the need date but before the time-to-fill limit has been reached) include:
- Bringing people on board well after they are needed will obviously delay production and may also lead to customer dissatisfaction.
- Late starting employees might need to be rushed through training and orientation, which may directly impact their time to productivity, their turnover rates, and there on-the-job error rates.
- Manager satisfaction with recruiting and HR may be decreased because their needs were not met on time.
- New hire satisfaction may be decreased when employees start their positions in the middle of an incentive cycle or in the middle of a business process cycle.
Problems With Providing Recruits Too Early Time to fill is measured by calculating the time between when the requisition is opened and the date candidates start the job (some instead use the date an offer is accepted as the ending date). By measuring time to fill, you are encouraging recruiters to shorten the time between the requisition and the offer acceptance. But in some cases, by emphasizing shortening the time to fill, recruiters might actually be providing the manager with a new hire days or even weeks before they are actually needed. This is known as a “too early” hire. It’s too early because managers often start the requisition process without really knowing how long finding and screening a candidate will take. In fact, they often start quite early because they are afraid that the recruiting team will not get them the talent they need in time. The net result of this uncertainty is that managers frequently place requisitions too early, while recruiters rush to fill them to reduce their time to fill. Quite often, this “confusion” leads to a situation where the offer is accepted by the candidate long before the manager actually needs the new hire. By getting the new hire too early you can cause a variety of problems, including:
- If the employee starts right away, there is an increase in salary costs as a result of paying an employee before they are really needed.
- The chances that the manager or the job will not the ready for the new employee are much greater. For example, if the manager is not ready for the new employee, they might not be able to devote sufficient time to them, especially if they start in the middle of a business process cycle.
- Another negative consequence of an “early” hire might be that the new hire will be available before the necessary training, support, or equipment is available.
- Manager satisfaction with recruiting and HR may be decreased because their jobs are filled too early.
- If you choose to delay the employee’s actual start date until the actual need date, you are likely to frustrate the new hire, and perhaps the delay will even cause you to lose them to another firm during their wait.
By utilizing time to fill as a metric, a recruiter would quickly realize that in fact they will be penalized for delaying any hires beyond the target T2F days, even though common sense would dictate that you wouldn’t rush through any hires with a far-off need date. The Solution Is To Change Your Metric To Need Date By changing the metric for recruiters to the percentage of hires that were filled within two days of the actual need date, you encourage recruiters to act more like businesspeople and provide managers with candidates precisely when they are needed. By shifting to the need-date metric, you essentially force recruiters to prioritize when they do recruiting in order to better fit business needs. Using this “need date” metric encourages recruiters to put a high priority on requisitions with an early need date. On the other end, it allows recruiters to relax and even delay the hiring process for reqs with a far-off need date, without penalty. The net result is that the recruiting function better fits each individual managers’ needs, unlike T2F, which provides speed across the board, even in the cases where speed actually harms the organization. % of need dates met
= Number of reqs filled by need date (plus or minus two days) / Total number of reqs filled Sample calculation: 40 reqs filled by need date / 50 total reqs filled
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= 80% of need dates were met Caveats Shifting to the need date metric is not without its problems. It’s quite possible that managers will artificially shorten or move their need date up in order to get better service from a recruiting system that has a track record of extremely long times to fill. The problem can be minimized by:
- Setting limits on the percentage of requisitions that any manager can submit with extremely short need dates
- Monitoring the process and talking to managers who consistently ask for an imminent need date
- Limiting early need dates to managers in high priority business units or with high priority jobs
It’s important to note that it is equally true that recruiters can game the system under the time-to-fill metric by not officially opening a requisition until much of the sourcing work has already been done. Conclusion It’s a fact that as few as 10 years ago, most recruiting organizations completely ignored any measurement of speed of hire. Fortunately, recruiting managers in most firms responded to the “war for talent” by developing a T2F metric that encourages the speeding up of the recruitment process. But the time has come to move speed metrics to the next level. And that means varying your hiring speed so that positions with immediate needs are filled immediately and positions with a long-term start date are not filled before they are actually needed (the remaining requisitions that have a “standard” need date are less affected by whichever of the two different metrics you utilize). Recruiting managers must remember that some business units really do require fast fill times, so it is important for recruiting to respond to their special needs. It’s even possible to use both of these two metrics in tandem, where individual recruiters are measured on “need dates” met and time to fill is measured at the departmental level. By shifting to the higher level need-date metric, you begin the process of transforming recruiting in to an organization that responds to the business priorities of hiring managers. At some point, most recruiting managers eventually realize that the final step is to actually prioritize all jobs, business units, and managers (based on growth rates, products or margins). When this occurs, the priority jobs and business units will receive priority treatment by being assigned the best recruiters and the most resources. When you prioritize requisitions, first by business priorities and then by need date, you send a clear message to senior leadership that recruiting is becoming more responsive and businesslike. By shifting what we measure, we also demonstrate that we have learned the valuable lesson that, although speed is important in some cases, applying it evenly across the board can actually hurt an organization.