Headcount plans exist in a limbo between a well-crafted board presentation and the ever-changing nature of the real world. Regardless of how well they plan, startups of all stages fail to hit their hiring goals for a variety of reasons; difficulty fundraising, missed revenue targets, lack of recruiting resources, etc.
In all of this chaos, there is one metric which can act as your North Star— interview hours per hire. This metric represents the amount of time employees spend interviewing candidates, rather than building a product, fundraising, talking to customers, scaling a new marketing channel, etc.
You may ask yourself, why hours per hire versus time to fill, cost per hire, candidates per hire, etc? The simple reason is that very few people understand what those metrics mean to their day-to-day life. Hours per hire is not only tangible, since every employee feels the pain of endless interviews, improving the metric has positive ripple effects across the entire company. The goal is to create an interview process that is both predictive of employee success and as efficient as possible.
Below is an example of how to calculate hours per hire for your team.
- Use your interview process conversion data. If you don’t currently track interview metrics, use Lightspeed’s Hiring Trends Report. Note, this data is for non-executive hires.
2. Map your interview process and the amount of time each team member spends by stage. In the scenario below, you may notice the founder and hiring manager spend significant time in the “pre-close” stage (the last conversation before delivering an offer). The best early-stage teams create a high-touch interview and offer experience.
What quickly becomes apparent is the amount of interview time one hire takes, 44 hours. This does not include disruptions to work, which can negatively impact employee efficiency. Now imagine the team needs to hire 10 engineers this quarter. Do they have 440 hours of time available just for interviewing?
3. Understand the time commitment per interviewer. In addition to calculating the aggregate hours per hire, it’s also important to evaluate the impact on each interviewer. From our example interview process, you can see the burden falls heavily on the hiring manager, who will spend 16+ hours per hire. In this situation, I would recommend the company trains their interviewers to take over the phone screen stage; saving the hiring manager over 50% of their total interview time.
For a quickly growing team, these numbers can seem overwhelming. Although hiring should be a key responsibility for every employee, interviewer fatigue is a real risk. Understanding your hiring funnel and interview hours per hire is the first step to preventing burnout and wasting critical resources.