Two numbers dominate every conversation about hiring performance. Both are worth measuring. Both were defined for a kind of hiring that most frontline employers do not do, and applied unchanged they produce confident conclusions in the wrong direction.
The definitions, precisely
Time to fill is the number of days between a role being opened and an offer being accepted. It measures the whole process, including the part before any candidate exists: writing the role, getting approval, sourcing, screening, interviewing, deciding and closing.
Time to hire is the number of days between a candidate entering the process and that same candidate accepting an offer. It measures only the part of the process a specific person experiences.
The distinction is not pedantry, because the two numbers fail in opposite directions. Time to fill counts sourcing delay and time to hire does not, so a role that sat unposted for three weeks and then moved quickly shows an alarming time to fill and an excellent time to hire. A team optimising time to hire can make its actual hiring slower, because dropping candidates who need a day to respond improves the average while extending the search.
Cost per hire is the total of internal and external recruiting costs divided by the number of hires in the same period. The ANSI standard developed with SHRM puts it plainly: add external costs such as advertising, agency fees, job board subscriptions and background checks, add internal costs such as recruiter compensation and referral payments, and divide by total hires.
The standard formula deliberately excludes the cost of the vacancy itself, which is why it understates frontline hiring so badly.
SHRM's benchmarking work puts average cost per hire in the region of several thousand dollars. That figure describes the salaried roles that dominate its sample, which is exactly why it makes a poor target for frontline hiring.
Why both metrics mislead in shift work
The metrics were built for a hiring model with a specific shape: a small number of expensive, individually-considered hires, where the recruiting cost is large relative to the disruption of the vacancy.
Frontline hiring inverts almost every term.
The hiring the metrics assume
- Few hires, individually considered
- Recruiting cost dominates
- One requisition, one hire
- The role waits for the right person
- Vacancy is an inconvenience
The hiring most operators do
- Many hires, continuously
- Turnover volume dominates
- One requisition, repeated quarterly
- The shift happens regardless
- Vacancy is overtime or lost revenue
Two consequences follow, and they are the reason a frontline operator can have excellent-looking numbers and a serious problem.
A low cost per hire is not necessarily good news. Divide a modest recruiting spend by a large number of hires and the result looks efficient. But the large number of hires is the problem being measured, not the achievement. An employer replacing eighty per cent of a workforce annually will report a flattering cost per hire precisely because the denominator is enormous.
Annual hiring cost is driven by hires per year, not by cost per hire. Halving cost per hire is a procurement exercise. Halving hires per year is an operations exercise, and it is worth several times more. Since a large share of frontline turnover occurs within the first ninety days, most of that denominator is determined by how the hiring was done rather than by anything that happens later.
The number that actually matters
For an operator whose success is measured in shifts covered, the decisive figure is neither of the standard two.
Cost of vacancy is what an unfilled role costs per day that it stays unfilled. It is the only one of the three that connects hiring to the operation, and almost nobody calculates it, which is why hiring is chronically under-resourced relative to what a delay actually costs.
It is straightforward to build for a specific role. Take the shifts that role covers in a week, and for each one identify how it is currently being covered. Overtime at a premium rate has a direct hourly cost. Agency or temp cover has a rate you already pay. A shift that goes uncovered has a cost in lost revenue, turned-away work, or service commitments not met. Add the load carried by the people absorbing it, which shows up later as their turnover.
- 1Overtime premium on covering staffThe most direct component and the easiest to obtain, since it is already in payroll. Usually the largest single line for shift-based roles.
- 2Agency or temporary cover rateCharged at a multiple of the internal rate. Where used, this alone frequently exceeds the entire cost of hiring a permanent replacement.
- 3Revenue not earnedClients not served, capacity not sold, work declined. Invisible in payroll, and often the largest number of the four.
- 4Load transferred to remaining staffThe slowest and most expensive component. It surfaces months later as further turnover, and it is why a long vacancy in a small team compounds.
Once that daily figure exists, every hiring decision becomes arithmetic rather than argument. A sourcing channel that costs money but closes a search two weeks sooner is either obviously worth it or obviously not, and the comparison is between two numbers rather than between a known cost and a vague benefit.
Recruiting spend is habitually compared against cost per hire, which is a budget line, rather than against cost of vacancy, which is the thing being bought. That comparison is the single most common reason a role stays open for five months to avoid an expense worth a fraction of the delay.
Measuring your own, without a system
None of this requires analytics software. It requires four dates recorded per role and a spreadsheet.
The interval between offer accepted and first shift worked is where a large share of frontline hires are lost, and it is outside both standard metrics.
The interval between the first and second date is the most diagnostic and the least recorded. A long gap before the first candidate appears is a reach problem; a long gap afterwards is a decision problem, and they have entirely different remedies. Most operators know only the total, which is why the usual response to a slow search is to interview faster, which addresses the second interval when the first is the one failing.
The fourth date belongs on the list because both standard metrics stop at acceptance, and a meaningful share of frontline hires are lost between acceptance and the first shift. A process that measures only to the offer will record those as successes. That gap is examined in How to Reduce Interview No-Shows.
What to do with the numbers
Three questions are worth more than any benchmark comparison, because they are answerable from your own four dates.
How many days pass before a first qualified candidate appears? If it is most of the total, the search is failing at reach, and no amount of interview discipline will fix it. That is the subject of How to Hire Hourly Employees.
What share of hires leave inside ninety days? That share is the part of your cost per hire denominator you are paying for twice.
What does a day of vacancy cost in this specific role? Until that number exists, every decision about hiring spend is being made against the wrong comparison.
Key takeaways
- Time to fill measures the whole process from role opened to offer accepted. Time to hire measures only one candidate's journey. Optimising the second can make the first worse.
- Cost per hire is external plus internal recruiting costs divided by hires in the period. The standard formula excludes the cost of the vacancy itself.
- A low cost per hire can be a symptom rather than an achievement: a large denominator means high turnover, not efficiency.
- Annual hiring cost is driven by hires per year, not cost per hire. Reducing early turnover is worth several times more than reducing per-hire spend.
- Cost of vacancy per day is the figure that connects hiring to the operation, and almost nobody calculates it.
- Record four dates per role. The gap before the first candidate is a reach problem; the gap after is a decision problem, and they need different fixes.
Common questions
What is the difference between time to fill and time to hire?
- Time to fill is the number of days from a role being opened to an offer being accepted, including sourcing. Time to hire is the number of days from a specific candidate entering the process to that candidate accepting. Time to fill counts sourcing delay and time to hire does not, so a team optimising time to hire can make its actual hiring slower.
How is cost per hire calculated?
- Add external recruiting costs such as advertising, job boards, agency fees and background checks, add internal costs such as recruiter compensation and referral payments, and divide the total by the number of hires made in the same period. This is the ANSI standard formula developed with SHRM. It deliberately excludes the cost of the vacancy itself.
Is a low cost per hire good?
- Not necessarily. Cost per hire divides recruiting spend by number of hires, so an employer with very high turnover reports a flattering figure because the denominator is large. In frontline work the large number of hires is usually the problem being measured rather than evidence of efficiency.
What is cost of vacancy and how do I calculate it?
- Cost of vacancy is what an unfilled role costs per day it stays open. Calculate it by identifying how each shift that role covers is currently being covered: overtime premium on existing staff, agency or temporary cover rates, revenue not earned from work that cannot be taken, and the load transferred to remaining staff which later shows up as further turnover.
Which hiring metrics should a small operator actually track?
- Four dates per role: the day cover was needed, the day the first qualified candidate appeared, the day an offer was accepted, and the day the first shift was actually worked. The gap before the first candidate indicates a reach problem, the gap afterwards a decision problem, and the final interval catches hires lost between acceptance and start, which both standard metrics miss entirely.
Written by the team at Kariaa. Learn more at www.kariaa.com.