The two critical metrics for the technical recruitment planning – time to hire and cost per hire, will be on the top of your head, if you are a hiring manager. Ironically, one of the most expensive resources i.e., engineering time spent on evaluation process, is not accounted for in the total cost per hire and therefore not planned in recruitment budget rather passes on as a part of business cost. Often the TA personnel call is placed at the beginning of the evaluation process to save engineering time and the actual time for technical evaluation is broadly ignored.
As per a random poll on twitter, 94% of hiring managers agreed that cost per hire includes a high portion of engineering time. Measuring engineering time during a recruitment process is tough as it involves clocking hours from two different towers, the HR and Engineering. Additionally, the tech team need to evaluate on both the phone screens as well as onsite. To figure out your cost per hire, you add up all the external and internal costs incurred during a recruiting cycle and divide by the number of hires.
External costs will sum up the cost incurred to any outside sourcing agencies, candidate travel, hotel stay, job fairs, portal advertisements etc. on the other hand internal costs will be a total of cost to the organization’s recruitment teams, referral bonus etc. The time spent by technical teams in the evaluations done by them doesn’t bill into any of the two aforementioned pockets.
In a survey done across 50 it companies for openings in niche technologies, below is a synopsis of average engineering hours spent:
Out of 20 candidates screened by recruiters (let us put 30 min of HR time spent here), 16 make it to the technical phone evaluation process (assuming 16 hours of engineering time is spent at this phase), of them 4 are invited for an onsite discussion (let’s say 12 hours of engineering time goes here that may include 2 rounds tech evaluation as well as feedback discussions plus 4 hrs of HR time), of the 4 only 2 could be made offers ( 30mins of HR time to roll out each offer) and of them 1 on- boards to the company.
This data clearly indicates that engineering time spent in recruitment is certainly big! (28 hrs, $150*28= $4200, taking average engineering time as $150) the HR time spent in the above exercise= 10 hr(30 min *20) +4 hrs+ 1 hr(30 min*2)= 15 hrs. If $100 is HR rate per hour, total HR time spent= 15* $100= $1500.
So for 1 hire, typically we spend 28 hrs of engineering time which is unaccounted for. And, this is just on the face of it. We are yet to contemplate the time lapse due to interruptions in normal delivery work for an engineer that may boil down to a usual 30 mins for ramp up and back from every hour of an evaluation, 28*30 mins= 14 hrs.
Therefore, we have total of 28 hrs+14 hrs= 42hrs, and cost per hire= 42*$150= $6300!!
Besides the huge cost factor, there is an underlying resentment seen between the HR and engineering teams that makes the hiring process rough and patchy. The recruitment teams often find the techies unavailable and unwilling to cooperate as there is a mismatch of suitable time for evaluation. The engineering teams resent the TA teams arbitrating the process without setting clear goals for their time.
Much of this resentment must be eased by incorporating TA and engineering cost together in an actionable manner so that the high cost per hire can be reduced.
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