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The Hidden Cost of Time-to-Hire Drags (and How References Cause Them)
(and How References Cause Them)
Every day a seat stays empty in your company, you lose money. Most hiring managers look at the cost of ads or recruiter fees. However, the biggest expense is often the time it takes to get a new person started. When your hiring process moves slowly, you face hiring delays that can drive away the best candidates.
One of the biggest causes of these delays is the reference check. While it is a necessary part of hiring, the way most companies do it is slow. Moving from a manual process to a better system is the best way to reduce time to hire and keep your team productive.
Understanding the Cost of Vacancy
The cost of vacancy is a metric that measures the financial loss when a position is empty. When a role is not filled, work does not get done. Other team members may have to work harder, which leads to burnout. In some cases, you may even lose revenue because there is no one to serve customers or build products.
To calculate this, you can look at the average revenue each employee brings in. Take your total annual revenue and divide it by the number of employees. Then, divide that by the number of working days in a year. If an employee brings in $500 of value per day, a 10-day delay costs your company $5,000.
When you multiply this by every hire you make in a year, the numbers become very large. Reducing these delays is not just about speed: it is about protecting your budget.
The Phone Tag Problem: Analyzing Lost Days
The most common reason for a slow reference check is "phone tag." This happens when a recruiter calls a referee and leaves a voicemail. The referee calls back later, but the recruiter is in a meeting. This cycle continues for days.
Why Phone Tag Happens
- Referees are busy professionals with their own schedules.
- Recruiters often manage many candidates at once.
- Time zone differences make live calls difficult.
- Referees may not want to take an unscheduled call from an unknown number.
The Financial Cost of the Delay
Research shows that manual reference checks add an average of 3 to 5 days to the hiring process. If we use the $500 per day cost of vacancy mentioned earlier, those 5 days of phone tag cost $2,500 per candidate.
If your company hires 100 people a year, you are losing $250,000 just because people cannot get on the phone at the same time. This is a massive waste of resources that most companies ignore.
Recruitment Metrics That Show the Drag
To fix the problem, you must first measure it. You should track specific recruitment metrics to see where your process is failing.
- Time to Fill: This tracks the total time from when a job is posted to when a candidate accepts.
- Time to Hire: This measures the time from when a candidate enters your pipeline to when they accept the offer.
- Reference Turnaround Time: This tracks how long it takes from sending a reference request to receiving the final report.
- Offer Acceptance Rate: If this rate is low, it might be because your hiring delays are allowing candidates to take jobs elsewhere.
If your reference turnaround time is more than 24 hours, it is a sign that your manual process is causing a drag. You can reduce time-to-hire with automation to bring this number down significantly.
How Automated Workflows Fix Hiring Delays
The solution to the phone tag problem is to remove the need for a phone call. Automated workflows allow referees to provide feedback on their own time. Instead of waiting for a call, they receive a secure link to a digital form.
Benefits of Automation
- Speed: Most digital references are completed in less than 24 hours.
- Accuracy: Referees can think about their answers and provide more detail in writing.
- Compliance: Digital systems keep a clear record of all communications.
- Candidate Experience: Candidates feel better when the process moves quickly and they are not left waiting for news.
By using these tools, you remove the human error and scheduling conflicts that cause hiring delays. This makes the entire process more predictable for your team.
Frequently Asked Questions
How does reducing time to hire help my company?
It saves money by lowering the cost of vacancy. It also helps you secure the best talent before they accept offers from your competitors.
Why are manual reference checks so slow?
They rely on two busy people being available at the same time. Between missed calls and voicemails, days are lost.
Can automated references be as good as phone calls?
Yes. In many cases, they are better. They provide a written record and allow for standardized questions, which makes it easier to compare candidates.
What is a good time to hire?
This varies by industry, but most high-performing companies aim for a time to hire of under 20 days. If your process takes 40 or 50 days, you are likely losing money.
Winning the Race for Talent
In a competitive market, speed is a strength. If you take two weeks to finish a reference check, you will lose your best candidates to companies that move faster. The "hidden cost" of your hiring drag is not just the money lost to an empty seat: it is the loss of great people who could have helped your company grow.
By focusing on the right recruitment metrics and fixing the bottlenecks in your workflow, you can make your hiring process a competitive advantage. You do not need to work harder to get better results: you just need to work smarter.
Stop the Clock with Refhub
If you want to reduce time to hire and stop the cycle of phone tag, Refhub is the tool you need. Our platform replaces slow manual tasks with fast, digital solutions. We help you get the data you need to make hiring decisions in hours, not days.
Do not let your hiring process hold your company back. Switch to a system that works as fast as you do. Contact Refhub today to see how we can help you fix your hiring delays and lower your cost of vacancy.
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