Keeping an Eye on Mean Time to Hire
One report we keep an eye on here in the office is the DHI report on Hiring Indicators – and their “Mean Vacancy to Fill” open roles. This is a look at how long it takes to fill open jobs in various industries and overall in the US. You may be surprised to hear that the number has been very high over the past several years with unemployment such an issue and the economy a top story.
While the overall report is interesting – we are an IT company so our focus is on time to hire IT professionals. In the early 2000s when companies were hiring as quickly as many of us recall the various sign on bonuses, stock grants, burrito carts, you name it that were used to lure talent to many growing companies. Typically it took 25 – 35 business days to fill an IT role during that time.
Things changed in 2008 as the bottom fell out of the job market. Time to fill IT roles in 2008 averaged 34.4 working days. Curiously in 2009 – when things were even worse – the mean time to fill IT roles DROPPED to 23.8 days. There were fewer jobs out there. There were more professionals available due to companies closing doors and going through layoffs. That essentially ended up being the transitional year where supply outpaced demand.
But what we saw in 2010 and over the following few years – and what was so frustrating to job seekers – was that companies who were hiring felt they had to be very careful with their budget. This carried over into hiring where teams were very worried about hiring the wrong person and in effect wasting that funding. They were hyper focused on finding people who could walk in and be fully functional and effective on day one. The mean time to hire in those years hovered at over 40 days.
While that may have been “do-able” there was usually a wrinkle. Somewhere in the mix companies came to the conclusion that with so many people out of work that the timing was right to reign in the “cost” of many roles. These companies approved positions to be filled but what may have been a $100K IT job in 2006 was being posted as an $85K job in 2011. Same skills and experience required.
Some unemployed folks were able to move on and find a job that kept them whole – same or similar salary and benefits. Others took jobs similar to their last at reduced compensation. All too many candidates were turned away at the door though when compensation was disclosed. In the old world a $100K candidate would be passed over for an $85K job. It was a simple qualifier that had been used for years. Unfortunately the people reviewing the candidate were often unable to interview people with the right skills for that very reason. Simultaneously they were not able to interview $85K candidates because they did not have the required amount of experience. From our seat we observed a lot of spiraling as a result.
During this time our role really migrated toward consulting as we helped clients take a look at their open roles with a realistic eye toward the potential and available candidate pools. It is no surprise that once the budget was cut we saw many IT Directors forced to look off-shore and to the large H1 shops to fill empty seats. They were able to justify the missing skills and experience with the lower cost for someone who often was not an FTE.
The upside? The past few years have been a learning experience for companies making IT hires. While there is more funding available out there and the economy has improved we still see companies being cautious when it comes to pulling the trigger – they want to be sure they have the right person. These companies, though, are coming into the process from a better position from a comp and benefits perspective. We see fewer and fewer roles posted well under market compensation-wise. We have not had a conversation with a hiring team about finding someone willing to take less because of the market in at least a year.
Here in 2016 we are seeing numbers I would call closer to normalized in the IT world. From January through June the mean time to hire is 31 days. When you look back to the .com era in the early 2000s where mean time to hire was around 25 days – and contrast it with the peak of 40 days during the downturn – a month seems about right on average.
Don’t forget – the average includes everything from an entry level analyst through your most senior and diverse technical architect. We see junior level one support roles filled in 10 business days and we see specialized security roles take months to fill. What we see that is much more encouraging – and what we hear from the people we work with – is that more often than not the hiring process is not bogging down in the manner we have seen in the recent past.
While finding the right IT person for an opening can still be challenging it really is great to be having conversations about how we can be flexible and partner with our clients along the way. And it doesn’t hurt to have candidates interviewing for roles that give them the opportunity for career growth either!