What is Hiring Velocity and How Do You Track It?

What is Hiring Velocity

Hiring velocity is a new name for an old metric, one you might even measure without knowing it. Giving it a name and watching it over time is beneficial because, as with many metrics, you can then start to take action to optimize it.

So, what is it? How do you track it, and how can you improve it?

What is Hiring Velocity?

There’s a common misconception amongst bloggers and entrants in the HR space that “hiring velocity” is the same as “time to hire.” That is, the time it takes to fill a job posting. That is a common mistake to make, and even HR-focused blogs frequently make it.

Hiring Velocity is not just a fancy name for the time it takes to fill a position. It’s undeniably essential to measure the time it takes to hire, from when you post a job listing publicly to when your chosen candidate accepts the job offer and starts onboarding. However, that metric already exists, as Time to Hire or Time to Fill.

Candidates For Hiring

Hiring velocity is all about that second word: velocity. If you think back to your school physics classes, you might remember the definition of velocity:

“The velocity of an object is the rate of change of its position with respect to a frame of reference, and is a function of time.”

A faster hiring velocity means a more effective business, in general. After all, the longer a position remains unfilled, the longer the rest of your team has to struggle to do extra work. Productivity and morale suffer, and turnover can increase as stressed and burned-out employees decide to leave, putting further burden on those who remain.

Intricacies of Measuring Hiring Velocity

Hiring velocity is a C-level metric that considers your hiring process over time across the whole of your business.

To measure it, you need to know several pieces of information.

  • The chosen time frame. Are you talking about this month? This quarter? This year?
  • The number of positions that opened up in that time frame.
  • The number of hires you made in that given time.

You do not need to track which positions opened and which ones closed. Nor do you need to track time to hire to measure hiring velocity.

New Company Hires

Let’s say that your company opened up 15 new positions this month. You also already had some positions opened before this month, but since you’re not measuring the period those positions opened, you don’t need to worry about them. You also made 20 hires this month. Again, it doesn’t matter which positions were filled, whether 15 of those 20 opened up this month or not.

Hiring velocity is the difference between the number of positions that open and the number of positions filled in a given time. So, in this case, your hiring velocity for the month is -15 plus 20, which is +5. You have a positive rate of fill (the number of overall positions open is decreasing as the number of hires increases and/or the number of new positions drops).

As you can see, this metric isn’t significant for ground-level, day-to-day HR management. Overall, hiring velocity doesn’t impact decision-making for individual hires, or for whether or not you’re opening up a new position, or any other similar concerns. That’s why we say it’s more of a C-level metric. It’s helpful in guiding overall business practices and making large-scale hiring decisions, not day-to-day analysis and tactical decision-making.

Hiring velocity should be measured:

  • Annually
  • Quarterly

And additionally, you can measure it monthly and even weekly if your business is large enough to warrant it. Many small businesses might not hire people or let people go every week or every month, so hiring velocity at such a granular level might not be relevant for those businesses.

Why Measuring Hiring Velocity is Important

It’s often helpful to have both a top-level and a granular view of hiring velocity because it can change from month to month and stabilize over a year.

For example, in a large retailer, hiring velocity might tick dramatically upwards in the October and November range (to prepare for Black Friday and the holiday seasonal hiring surge) and drop dramatically at the start of the year, as those temporary positions are eliminated. While those significant shifts in metrics can look startling when examined month to month, they even out over the year, and the annual hiring velocity metric is more important.

Hiring Enough Staff

A positive hiring velocity means you’re filling more positions than you open. Typically, this means that your business is growing, but you’re hiring enough people to keep on top of it. Everyone has a comfortable workload, you aren’t understaffed, and you’re fueling further growth.

Of course, hiring velocity doesn’t tell the whole story. A positive hiring velocity doesn’t necessarily mean business growth; just hiring faster than positions open up.

Conversely, a negative hiring velocity often means you’re struggling to keep up. More positions are opening up than you’re filling. That could mean that your business is growing, but your hiring process hasn’t caught up. Or, it might mean that your employees are leaving in droves, and you’re struggling to keep going. Context matters, but context isn’t built into the metric.

How to Use Hiring Velocity

Also, there’s no such thing as an “ideal” hiring velocity. Different industries, businesses, branches of the same business, and departments can have different “ideal” hiring velocities.

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You can also divide hiring velocity into separate velocities for different channels. For example:

  • Hiring velocity for entry-level workers.
  • Hiring velocity for management.
  • Hiring velocity in sales.
  • Hiring velocity in customer service.

Each sub-section of the metric gives you more detail. For example, you might have an overall negative hiring velocity, but find that you have a positive hiring velocity everywhere except customer service. This indicates that you may have a problem with your recruiting practices in your customer service department. Maybe you need to adjust your pay and benefits package, rewrite your job ads, invest more in your job advertising budget, or work to address problems in your service company culture.

 Using hiring velocity means understanding the metric and making relevant observations.

Is it meaningful to say that “this month’s hiring velocity has dropped 50 points”? Probably not. A single month is too short of a time scale to make meaningful overarching hiring decisions. As in an example above, this can mean it’s the start of a new year, and your seasonal workers are leaving without their temporary positions being filled again. You can then measure the same thing around the end of summer and get a positive-by-50 hiring velocity to balance it out.

Using Hiring Velocity

 Use hiring velocity to make top-level decisions, not ground-level decisions. Again, that’s why this is an ideal metric for C-levels and directors, not for HR management or daily HR staff.

In other words, hiring velocity shouldn’t even be of concern to the people working with your ATS and making daily hiring decisions. No one should ever have the pressure of increasing hiring velocity because that encourages faster hiring decisions, but not better hiring decisions. You’re more likely to pick people just to put warm bodies in seats.

 Use hiring velocity to look for problem areas within your business. As mentioned above, you can segment hiring velocity by department, branch, geographic location, and other buckets. You can then see which buckets are producing exceptionally negative hiring velocities.

A very negative hiring velocity can mean two possible things.

  • You have many employees leaving, which opens up many positions that aren’t being filled.
  • You have increasing demand, forcing an increase in hiring (for positions that aren’t being filled.)

You’ll note that both have “positions that aren’t being filled” as part of their definition. That’s because this is a core part of a negative hiring velocity. If the positions were being filled, velocity wouldn’t be negative, after all.

However, each meaning has a different potential source. For example, if many existing employees are leaving, it indicates a problem with your business, company culture, department management, workload, or another aspect of the business. If your employees are burning out and leaving, that’s a problem that needs solving.

Likewise, if your business is growing, you may need to hire to fill positions rapidly to keep on top of that growth, but a slower hiring process means that those positions aren’t filled as quickly. In this case, there’s nothing wrong with your company culture or department management, but there may be inefficiencies in your hiring process that slow it down and make volume hiring more difficult.

These are the kinds of insights you can gain by starting with overall hiring velocity, segmenting it down to bucketed hiring velocity, and then examining the causes of those particular outliers.

How to Improve Hiring Velocity

The first step to improving hiring velocity is measuring hiring velocity in the first place. Set up measurement within your HR stream (many ATSs already do this), and make sure you can see and sort your metrics by as much or as little nuance as you want. At the very least, get as granular as a weekly velocity if necessary, and drill down into department, branch, and location-level data.

Next, look to see if your overall hiring velocity is good or not. A neutral or slightly positive hiring velocity is generally ideal. Outliers indicate some imbalance, and you want a balanced hiring velocity above all else. After all, a very positive hiring velocity is typically unsustainable.

Next, drill down and look for outliers. Are there any sub-sections of your company that have exceptionally positive or exceptionally negative hiring velocities in a given period or overall?

Pro Tip: When examining drilled-down data, make sure to look for a corresponding balance elsewhere in the longer term. A highly negative velocity in a given department in a given month can be balanced-out by a highly positive velocity six months later, such as with highly seasonal work.

Once you identify these outliers, your job is to figure out why they’re outliers. Causes can include high turnover, burnout, extreme workloads, poor work-life balance; the usual array of reasons why hiring can go wrong.

Improving Hiring Velocity

Improving hiring velocity can mean taking many different actions.

  • Streamline your hiring process, so the time-to-hire isn’t exceptionally long, which leaves positions unfilled for longer.
  • Look for problems in particular departments that cause undue increases in openings, like poor culture, poor pay, or a poor manager.
  • Check to see if your hiring process is always “warmed up” or if you need to spool it up for each new position and implement procedures to keep it warm and ready to go.
  • Look for opportunities to implement additional recruiting channels, such as employee referrals or the use of a novel job listing platform.
  • Check to see when the last time your job posts were written, how accurate they are, how extreme their requirements are, and what improvements you can make to them.
  • Revisit, and revise, your employer brand messaging to promote aspects of culture, mission, and compensation that are most relevant to your current target audience.

The truth is, improving hiring velocity can be done in pretty much any way that improves any aspect of your overall hiring process. Any improvement you make, whether to reduce turnover, improve the quality of hires, open up internal mobilization and career investment, or anything else, is beneficial to hiring velocity.

Much about running a successful business is more than just keeping numbers positive; it’s about keeping them in balance. Hugely positive growth is unsustainable no matter what form it takes. Your job as the head of HR is to look beyond the surface to identify avenues to keep your hiring process in balance with the pressures of your business, your customer base, your growth, and more.

Do you have any questions about hiring velocity, how to implement it, or anything else related to the topic? If so, please feel free to leave a comment down below, and we’ll get a conversation started. Properly tracking and using hiring velocity will not be a simple task for every company, so we would be more than happy to answer any questions you and your company may have! 

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