Key Points:
- Seasonally adjusted Time to Hire fell by 23% between February 2020 and August 2022, but has climbed since.
- The drop and subsequent rise in Time to Hire suggest that labor market tightness and macroeconomic conditions are potential drivers behind changes in hiring timelines.
- Time to Hire appears to be negatively correlated with the US quits rate (when one goes up, the other goes down) and positively correlated with the US labor force participation rate (both move in the same direction).
The number of available jobs at a given time is impacted by overall macroeconomic conditions in many relatively obvious and intuitive ways. The time it takes to fill those jobs is also impacted by broader macroeconomic conditions, but in ways that may be more counterintuitive. For example, the time it takes to hire a worker may rise when there are more workers in the workforce, and may fall when more of those workers quit, according to a Hiring Lab analysis.
The job market was heavily tilted in job seekers’ favor in the immediate post-pandemic period, as job openings shot through the roof and employers reported widespread labor shortages and difficulty finding quality candidates. In this environment, one might expect it to take longer for employers to hire workers after starting the recruiting process. However, Indeed data suggests the opposite: Time to Hire plunged as the US labor market tightened after the pandemic, then rebounded as conditions cooled. This surprising pattern highlights how hiring practices and Time to Hire evolve differently in response to macroeconomic trends, including the so-called “Great Resignation” that marked the early years of the post-pandemic recovery.
Average Time to Hire fell post-pandemic, but has climbed recently
The average time it took to hire a candidate, measured as the number of days between a job’s creation date and the reported first hire date, fell notably from 2020 to 2022. This period was marked by rapid growth in job openings, a rising hires rate, and an increasingly tight labor market. An indexed level of average Time to Hire fell by 23% between February 2020 (the last full pre-pandemic month) and August 2022 (when Time to Hire reached its recent low*). Average Time to Hire has climbed ever since, and as of March was nearly back to January 2019 levels.
The observed pattern since 2019 suggests that labor market tightness and macroeconomic conditions are also potential drivers behind changes in Time to Hire. As the job market grew tighter, employers may have acted with more urgency to hire qualified candidates to avoid losing them to another offer (since surging job postings/openings meant more opportunity for them to go elsewhere). In turn, that urgency may have then led to further labor market tightening. Similarly, some employers may have expanded their candidate pool to include workers without a college education or more limited experience, resulting in faster hiring times. Evidence of strong hiring intensity in 2021 and 2022 can also be seen in historically high US hires rates during those years.
The inverse relationship between Time to Hire and voluntary quits
Another possible explanation for changes to hiring timelines over the past few years is the difference in why a job may have been posted to begin with. In 2021 and 2022, many workers voluntarily quit their jobs during a period many have coined “the Great Resignation.” By its very nature, quitting is “worker-driven.” For each job that someone left during this period, it is likely that a posting/opening was created to backfill their departure, representing a comparatively more urgent need to fill a job that someone was already doing. In contrast, when an employer decides to expand headcount and grow, they have more flexibility in their hiring timing and may be more willing to wait for the “perfect” candidate.
A potential shift away from worker-driven growth in postings (backfills for quits) and toward employer-driven growth in postings is illustrated by the relationship between the US quits rate and average Time to Hire after the pandemic. From mid-2020 to mid-2022, the average Time to Hire gradually declined while the quits rate rose. After peaking in March 2022, the quits rate started to fall. Six months later, average hire time began to rise, suggesting a potential inverse (and lagged) post-pandemic relationship between the two indicators.
A simple regression analysis was used to test this relationship further and to identify other possible ties between Time to Hire and various economic indicators. Variables tested included the quits rate, labor force participation rate (overall and prime-age), unemployment (level and rate), job openings per unemployed worker, job openings, the hires rate, and the civilian labor force level. The results, while not causal, suggest a possible negative relationship between Time to Hire and the quits rate (when one goes up, the other goes down). The labor force participation rate was also found to have a significant positive relationship with Time to Hire (both move in the same direction). A full econometric analysis is required to test these relationships further, but these early results suggest that macroeconomic conditions may play some role in increasing or reducing Time to Hire.
Conclusion
Macroeconomic factors, employer urgency, and the type of job posting (backfill vs. growth) may be key drivers behind changes in hiring speed. The post-pandemic run-up in job postings and voluntary quits may have played a role in reducing Time to Hire as employers moved faster to secure candidates in a tight labor market. Conversely, as the labor market has cooled over the last few years, Time to Hire has gradually crept up, reflecting less employer urgency and a potential shift toward growth-driven hiring. Preliminary analysis suggests a negative relationship between Time to Hire and the quits rate, and a positive one with labor force participation rate, though a more robust econometric study would be needed to confirm these dynamics. Still, early signals point to Time to Hire as a useful barometer of employer confidence and urgency in a rapidly changing hiring landscape.
Methodology and Footnotes
Time to Hire is measured by calculating the difference between when a job is created on Indeed and when the first hire is reported for that job. For example, if a job was created on January 1 and the first hire was reported on January 21, that job would be reported as taking 20 days to hire (as it excludes the creation date and includes the offer acceptance dates). A subset of the average hire time across jobs for which Indeed has known hire dates was used for this analysis. The calculation excludes a small portion of hires with abnormally long durations (which are a result of data collection anomalies). Additionally, it is limited to logged-in job seekers, and jobs with specified hire dates coming from the Indeed candidate management page or an Applicant Tracking System.
The time it takes for an employer to fill a job posting is highly seasonal and fluctuates from month to month. Jobs posted around the end-of-year holidays and in the summer typically stay up a little longer, while jobs listed in the fall and spring hire slightly quicker. Data in this analysis were seasonally adjusted using the X-13ARIMA-SEATS approach. Ordinary least squares regression was used only to identify possible significant relationships between Time to Hire and macroeconomic conditions. This represents a limitation, as additional testing would be required to test model assumptions and eliminate the possibility of spurious regression.
*In seasonally-adjusted terms. While the seasonally-adjusted and unadjusted series reflect a similar trend, the high and low points may differ slightly.
