Eclat Hospitality

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Time-to-Hire and Cost-per-Hire: Key Metrics for Hospitality HR

Time-to-Hire

Definition: Time-to-Hire refers to the number of days it takes from when a candidate enters your recruitment pipeline (e.g., applying or being sourced) to the day they accept a job offer. It measures the efficiency of the hiring process, and in the fast-paced hospitality industry, shorter time-to-hire is often essential.

Steps:

1. Track when a candidate enters the pipeline: This could be the date they applied or were sourced by a recruiter.

2. Record the date they accept the offer.

3. Calculate the number of days between these two dates for each hire.

4. Average this number over all the hires in a particular time frame (e.g., for a quarter or a year).

Example:

If Candidate A enters the pipeline on August 1st and accepts an offer on August 10th, and Candidate B enters on September 1st and accepts on September 12th, the time-to-hire for Candidate A is 9 days and for Candidate B, it’s 11 days. If these are the only two hires, your average time-to-hire would be:

(9 + 11}{2} = 10 days

Cost-per-Hire

Definition: Cost-per-Hire measures the total financial investment associated with recruiting new employees. This includes everything from job postings, recruiter salaries, technology tools, and even candidate travel expenses for interviews.

Steps:

1. External Costs: These can include job board fees, advertising, agency fees, and candidate travel for interviews.

2. Internal Costs: Include recruiter salaries, ATS systems, referral bonuses, and in-house hiring team costs.

3. Add both categories of costs.

4. Divide by the total number of hires made in the specified period (e.g., a quarter).

Example:

Imagine your external costs (advertising, job boards, etc.) amount to ₹200,000, and your internal costs (recruiter salaries, ATS fees) are ₹300,000. If you hired 10 new employees during that time, the cost-per-hire would be:

(₹200,000 + ₹300,000}{10} = ₹50,000

Why These Metrics Matter in Hospitality HR:

• Time-to-Hire directly impacts operations, especially in hotels where roles like front office staff or chefs are mission-critical. A slow process could lead to staff shortages, impacting service quality.

• Cost-per-Hire helps manage recruitment budgets. Understanding where you’re spending most can help optimize your processes and perhaps lean on cost-efficient methods like employee referrals.

Is there a metric that hospitality companies should use?

Time-to-Fill

Time-to-Fill, measures the total time it takes to fill a position, from the date the job opening is posted or approved until the new hire actually starts working. This metric captures not only recruitment efficiency but also any delays between the offer acceptance and the candidate’s start date (e.g., due to notice periods).

Which One to Use?

Time-to-Hire is often favored when you want to focus on how quickly your recruitment process can convert a candidate from the initial interaction to offer acceptance.

Time-to-Fill gives a broader picture of the entire hiring process, including external factors like notice periods, visa processing, and relocation, which are especially important in the hospitality industry.

Which is Better for Hospitality?

Given that operational needs in hospitality are often immediate, Time-to-Fill might be the more important metric, as it reflects the total time it takes for a new hire to be “on the floor” and contributing. However, Time-to-Hire helps pinpoint internal inefficiencies in recruiting.

If your concern is getting people into positions quickly, tracking Time-to-Fill could be a more relevant metric, though both are valuable depending on the insights you need


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