Hiring the perfect person for every open job is every hiring manager’s dream. However, that may be as realistic as hitting blackjack on every deal on your next trip to Vegas! There are too many ways to go bust:
- You may lose a great candidate who takes another job
- You may feel that you don’t have enough candidates to pick from
- You may have to follow a process that takes too long or is too subjective.
HR department policies may add days or weeks to the process with background checks, drug screenings, compensation guidelines, or even wording in a job description. Things are even more difficult in a highly competitive job market. The best companies know that success comes from making decisions quickly, but others insist on waiting for the perfect candidate who may never come. How do you balance these competing ideas?
In this article, I’ll give you some math to use in your decision. Some say that hiring is more art than science, but as a numbers guy, I think some statistics might be useful in guiding your decision!
What’s in a hiring decision?
Before I explain why I picked 3.7 as the magic number of interviews, let’s look at some of the variables you have to consider:
- Average time to conduct a single interview
- Average free time a manager has to interview in a week (and, of those free hours, how many will also be able to be scheduled with the candidates)
- The number of interviews a hiring manager can make in a week
- The number of interview rounds your company requires before making an offer
- The number of weeks a great candidate will stay on the market
- The cost of vacancy and time required to fill the position
- The average number of candidates per job posting
- The percentage of candidates who qualify for an initial phone interview
- The percentage of candidates who will accept your job offer
With these in mind, we can look at each variable in detail and start crunching some numbers.
Average time per interview
According to Indeed, the average interview lasts between 45-90 minutes. Phone interviews are usually on the shorter end, and in-person interviews on the longer end. Indeed also notes that technical screenings tend to run from 45-60 minutes.
From our experience at NerdRabbit, we’ve found that managers tend to schedule 30-minute interviews for contractors and 60-minute interviews for full time staff. For the purposes of our interview math, let’s say that each interview takes one hour.
Time managers can spend interviewing
It’s hard to know a national average, but I’ve found that — for me personally and for the hiring managers I have worked with — a good rule of thumb is one hour per day can be freed up for interviewing. And for those free hours, three to four interviews can be set up that meet both the candidate’s and manager’s availability.
This estimate is probably low for positions like customer service or retail and might be optimistic for highly technical roles where unemployment is almost zero and good candidates already have full time jobs.
So, if the average interview takes an hour, an average manager can conduct three to four interviews per week, assuming they are not just phone screens.
How many rounds of interviews are average?
The job interview process has become notoriously long in recent years. The BBC dubbed this the “rise of never-ending job interviews” in an article, and it raises some good points.
While multiple interview rounds are certainly more common for more senior-level positions, it’s become normal for most jobs to require two to four rounds of interviews before extending an offer. Of course, this varies by the position, hiring strategy, and years of experience required for the role.
In our experience, entry to mid-senior level positions usually require about three interviews, one of which may include a technical interview if it’s for a software role. It’s not uncommon for more senior roles to require four or more interview rounds.
Whatever this looks like at your organization, take some time to calculate an average for your hiring process. You may be surprised by what you find!
Average time on the market
The best candidates are off the market in 10 days, according to recruitment trainer Rinku Thakkar in the Guidance Talent newsletter on LinkedIn. This is a sobering statistic, as it means you need to complete all interviews within two weeks and be prepared to make an offer, or the best candidates will be gone. Assuming that’s true, this single fact should drive your hiring strategy.
There are two paths to take.
1. Conduct all interviews in a two-week period and select the best candidate
Realistically, this means that you should have only two candidates after phone screenings if you are doing a two-round interview process, not including the initial phone screen. If phone screens take a week, you will only have one week left to pick a winner.
Again, if you have four hours a week to devote to interviews, you will need to get both rounds in during that period. If you are not involved in subsequent interview rounds, you could possibly increase the candidate pool to three to four without going over the 10-day period when the best candidate may find another job. But this increases the risk of scheduling issues and interview fatigue.
2. Use a strategy from the Secretary Problem
The Secretary Problem, also known as the Optimal Stopping Problem, is a classic mathematical theory in statistics. The problem involves a scenario in which a hiring manager must select the best person from a series of candidates arriving sequentially.
The manager has no knowledge of the quality of future candidates and can only either accept or reject a candidate upon evaluation. The goal is to maximize the chances of selecting the best candidate while avoiding the risk of waiting too long and missing out on the best option.
Mathematically, the optimal strategy suggests that the manager should reject the first approximately 37 percent of the candidates, then hire the first candidate that surpasses the quality of those initial candidates.
For example, if you have 10 candidates you want to interview and your process takes a long time, you can assume that the first few candidates you interview will be off the market by the time you can make a decision, so, your best strategy should be to interview 3.7 of them. From there, keep interviewing until you find a candidate that is better than your initial interviews and make that person an offer.
One intriguing thing about this statistical strategy is that it works within any timeline. Of course, the scenario would never be 100 percent accurate in the real world. You might not know the number of candidates, but based on phone screens and resumes, you may have an idea of the best candidates beforehand.
Number of candidates per job posting
According to Forbes, the average job post receives 118 applications. Unfortunately, companies report that more unqualified candidates are applying for jobs, and the candidates that seem promising don’t always respond to recruiters. In fact, in a recent Monster survey, nearly half (47%) of candidates admit to ghosting potential employers.
Let’s assume there are a few good candidates in the bunch for a given job post. And if we still believe that the best one will be gone in 10 days, you obviously need to move fast.
Many companies have leveraged some sort of AI for this very reason — it just takes way too long for a human to go through hundreds of resumes. As reported by NPR, Some 83% of employers — including 99% of Fortune 500 companies — now use some form of automated tool as part of their hiring process.
Screening acceptance rate
According to a Zippia report, about 250 people apply to corporate job openings on average. Out of all those applicants, only four to six will get called in for an interview. Going with the smaller number, that’s a 1.6% screening acceptance rate. Even if we assume six out of 250 applicants will get a callback, that’s still a 2.4% acceptance rate.
That’s really low.
And going off what I said in the previous section about the best candidates falling out of the candidate pool in 10 days, that really puts a lot of pressure on recruiters and hiring managers to move fast.
Look back at your organization’s applicant data, and calculate your screening acceptance rate. Just in case you need a refresher, use this formula:
(# of applicants contacted for interview / # of total applicants) • 100 = screening acceptance rate
Having a good applicant tracking system (ATS) can be a huge help here, and some might even calculate this metric for you automatically. Check your tool’s reporting features to find this. If you don’t already have an ATS, now might be a good time to think about getting one.
What is the cost of vacancy?
Managers wanting to wait for the perfect candidate often forget about the cost of vacancy. This refers to the financial and non-financial losses incurred by an organization due to a position remaining open. Cost of vacancy includes lost productivity, recruitment expenses, training costs, missed opportunities, overtime or temp staff expenses, employee morale impact, and potential damage to the organization’s reputation.
Although I didn’t figure out how to factor in the cost of waiting for the perfect candidate, it seems logical to assume “the faster, the better.” Making the wrong decision can be costly too, so there is a fine line between hiring too fast with the risk of making a mistake and waiting too long and losing good candidates while also suffering costs of the job going unfilled.
Offer acceptance rate
According to BuiltIn, the average offer acceptance rate in 2022 was 81 percent. That means that if you have five candidates, you can expect four to accept your job offer.
While this is a fairly high probability, there are many factors that can influence this ratio, including:
- Industry
- Job seniority
- Compensation and benefits
- Company reputation
The important thing to remember is that even if you narrow down your search to the perfect candidate, the job offer still may be rejected, sending you back to square one.
A little math goes a long way
The decision to hire a new employee is a big one, and it’s understandable that hiring managers want to take the time to find the right candidate. But just like many business decisions, hiring managers must learn to strike a balance between doing their due diligence to properly source and vet candidates and hiring quickly.
It’s true that hiring the wrong person can be a costly mistake, but so can taking too long to hire anyone at all. Thankfully, doing a little math can make a big difference in optimizing hiring efforts.
