Competition for talent is at an all-time high, and companies are struggling to find quality candidates to fill their positions.

Consider this: For the first time in 20 years, the number of job openings exceeds the number of unemployed Americans. That means there are more available jobs than there are people to fill them!

Because of this cut-throat hiring climate, many employers are finding creative ways to improve their recruiting and hiring processes. One metric they are focusing on is time-to-hire.

What is Time-to-Hire?

Time-to-hire is the time it takes between engaging a candidate and the candidate accepting an offer.

Employers are recognizing that, because of the current talent shortage, they must speed up their hiring process to compete or risk losing their best candidates to competitors. Consequently, many companies have begun analyzing their time-to-hire to reduce wasted time in their hiring process. In fact, one of the largest companies in the world, Google, recently analyzed five years’ worth of interviewing data to reduce their time-to-hire.

The search engine giant was subjecting their candidates to a grueling 12-interview process. Recognizing that this took valuable employee time and resulted in a poor candidate experience, their People Analytics team analyzed interview data to see if they could reduce the number of interviews but still achieve the same results.

Based on their statistical analysis, Google determined that “four interviews were enough to predict whether someone should be hired with 86 percent confidence.” With each additional interview, their ability to predict a hiring decision increased less than one percent. With this knowledge, Google now employs the “Rule of Four” — subjecting candidates to only four interviews — for all their hiring decisions.

Reduce Your Time-to-Hire

When your hiring process drags on too long, you risk losing your favorite candidates to competitors. You also waste money marketing your open jobs and time on needless extra interviews.  As Google found out, there’s a good chance you can reduce your time-to-hire while still achieving the same results.

Determine your average time-to-hire

You first need to find out how long it takes quality candidates to move through your interview process. Time-to-hire is the days it takes from when the candidate is sourced or has applied, to the day they accept your offer.

Do this for several candidates to find an average time-to-hire for your organization.

Determine hiring velocity

Once you know your average time-to-hire, break it down by each stage in your hiring process. This will tell you your hiring velocity — the amount of time it takes to move a candidate from one hiring step to another.

With this information, a picture will start to take shape. How long do decisions take at each stage? How fast do you act when you’re ready to make an offer? Which departments take too long to make a hiring decision? You will quickly see where the holdups are in your hiring process.

Determine interviews per hire

Finally, figure out how many interviews your team conducts before they hire someone. Look at this data for each role to identify any bottlenecks and work to expedite the process.

It’s understandable that employers would want to conduct a lot of interviews to avoid a bad hire. Hiring the wrong person can not only cost thousands of dollars, but a recent study also suggests that a single negative employee can cause a 30 to 40 percent drop in team performance. But in today’s hiring market, taking too long to hire can be detrimental. You will lose the best candidates for the position simply because you waited too long to pull the trigger.

Fear not. By analyzing these metrics, you’ll be better equipped to reduce your time-to-hire, increasing the likelihood that you will land the best people for your company while taking less time to make a hiring decision.