As the labor market continues to tighten, employers that have an unnecessarily slow hiring process will increasing lose out on top talent to companies that move more quickly.

Adapted from: The Top 12 Reasons Why Slow Hiring Severely Damages Recruiting and Business Results by Dr. John Sullivan; posted on ere.net on April 21, 2014. You can find the full article here.

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A candidate from a well-known benchmark firm dropped out of our search for a General Manager position because the hiring manager took a week to respond to his interest. He said: “It’s not like I need their job. If it takes them a week to respond to a resume like mine for a job of this importance, they’re not the kind of company I want to work for. I move fast, and I can already see that my style wouldn’t fit their culture.”

You may have noticed that we’ve returned to a highly competitive talent market where the negative impact of a slow hiring process will become more apparent (and costly) for companies that don’t adapt. How will that affect your business? Here’s a list of the 10 most damaging consequences associated with taking too long to hire:

1. The best talent will be lost during the latter stages of your recruiting process: When a top performer decides to enter the job market, it’s likely that they’ll be approached by multiple companies and get hired very quickly. Research indicates that the top 10% of candidates are hired within 10 days.
   Lesson learned: Speed of hire is absolutely critical when you are competing against other firms for high-impact talent. If you don’t move quickly, your competitors will take this top talent off the market before you can react.
2. You will experience a decline in the quality of the people you hire: It’s a mistake to think that a methodical interviewing process will result in better hires—it actually has the opposite effect. The longer you take, the lower the quality (i.e. the “on-the-job performance” of new hires) will be. As mentioned in item #1, an extended hiring process causes the top candidates to withdraw and thus diminishes the quality of your overall talent pool.
   Lesson learned: Instead of improving quality of hire, a slow process may actually increase the likelihood that you will hire mediocre talent.
3. Vacancies that remain open for longer than necessary will cost you money:While some hiring managers mistakenly believe that vacancies will save on salaries, the economic damage caused by having a revenue-generating position vacant longer than necessary results in lost revenue and productivity that will be difficult to recover.
   Lesson learned: Unnecessary vacancies have a significant dollar impact on productivity, innovation, and revenue generation.
4. Your salary costs will increase because you’ll wind up in bidding wars for top talent: When a high-impact candidate  enters the job market they are less likely to know their true value right way. If you offer them a position before other companies have had a chance to bid on them, you are more likely to hire them with little or no haggling. A candidate’s salary demands will invariably increase once they realize their true market value.
   Lesson learned:Fast decisions save money. Slow decisions will cause you to pay as much as 25% more for the same talent.
5. You’ll acquire an image of being a slow decision-maker which will hurt your “employer brand” and cause you to lose many top prospects: Candidates will gauge their interactions with your company during the recruiting process as an indicator of what it’ll be like to work there. A slow interviewing process will be lead candidates to believe your company is indecisive. Top performers tend to be fast and accurate decision-makers, so they’ll be much more likely to gravitate toward companies that do the same.
   Lesson learned: Slow hiring hurts your brand image, which in turn will reduce the number and quality of candidates who want to work at your company.
6. Slow decisions will cause you to lose a high percentage of “head-to-head” talent battles for top candidates: Winning a disproportionately high number of head-to-head talent battles with your top competitors builds a competitive edge. The inability to make fast hiring decisions on highly sought-after candidates leaves the door open for them to go elsewhere. Companies that react quickly will likely find that their productivity and innovation rates rise at a faster rate than those who don’t.
   Lesson learned:By acting quickly, not only will you capture a higher percentage of top performers, but you’ll simultaneously keep them away from your competitors.
7. Candidates will lose interest:Slow hiring dramatically reduces candidate excitement and increases your exposure to hiring freezes, layoffs, or budget cuts: When you’re trying to recruit a top performer away from another company, keeping them engaged and excited about your opportunity to vital to your recruiting success. The longer you take to get through your interviewing process, the more likely they are to lose interest or be courted by your competitors.
   Lesson learned: With “passive” job seekers–those who are open to a change but aren’t actively looking to do so–a slow and bureaucratic hiring process exposes your risk that something out of your control will impact the candidate’s interest–they might be offered a promotion or raise, increased fear of change, more opportunity for them to hear negative comments about your company from others in your industry.
8. Unfilled positions will be viewed negatively by your customers and employees: Positions that are vacant for long periods of time are often viewed negatively by customers and increase your risk of degraded and slower service. Likewise, a drop in the morale of employees who have to do double duty leads to lower retention. People who came from other faster-hiring firms will get frustrated because they know that these extended vacancies aren’t necessary.
   Lesson learned:Long-term vacancies impact multiple stakeholders and are bad for business.
9. Less success recruiting “passive” job seekers: Based on the premise that most desirable top performers are well-treated and currently employed, successfully recruiting them requires a different approach from hiring “active” job seekers. Once a “passive” candidate expresses an interest in making a change, they usually aren’t on in the job market for very long—often less than 3 weeks–because other companies find out and jump into the fray. Thus, you’ll face a much greater risk of losing them to a competitor, and increase the possibility that the candidate will receive and accept a counteroffer.
   Lesson learned:To successfully recruit high-potential, “passive” candidates, you need a faster hiring process than you use with active job seekers.
10. Increased hiring costs:A lengthy hiring process (more than four interviews over more than 3 weeks) eats up more time of everyone involved. The “hidden cost” of this extra time significantly increases your recruiting costs (cost-per-hire) and takes people away from other revenue generating activities.
    Lesson learned: You’ll save money and increase quality of hire by reducing unnecessary steps and enable your employees to spend more time on high-value activities.

Final Thoughts You certainly won’t impress anyone with a slow and cumbersome hiring process that routinely misses top talent. On the surface, the need for hiring fast might seem like an easy concept to understand, but can be very challenging to implement. If you don’t yet understand the impact of slow hiring, perhaps an analogy will help. Remember your high school prom? It’s common for most students to ask the most desirable prospects to be their prom date within a week or two of the prom announcement. But what happens to those who wait for 47 days (the average time it takes a corporation to make a hiring decision) to ask for a date? What would the probability be that your top three choices would still be available?