Currently, top frontline organizations are filling roles in 2-4 days(see how they are doing it here). That is a significant advantage in a market where the average frontline time to hire hovers around 14 days — and nearly a third of organizations take over 21 days (in non skilled/certifications/licensed positions).
So, does it matter?
And it’s worth millions of dollars — whether you are hiring in hospitality, retail, or manufacturing.
(Of note: As a former talent leader of corporate and high volume teams, I care quite a bit less about time to hire in corporate hiring; I don’t want wasted time or a clunky process, but most business leaders would prefer a better hire vs. speed any day. That is just not the case in the frontline: Better candidates typically come as a result of faster hiring).
Here is a quick snapshot of why it has such an impact on the top and bottom line in frontline staffing — and why you should be reporting your progress to your C-suite.
Are you overstaffed, understaffed, or just staffed?
Your organization has decided on staffing levels for a reason, right? You have the analytics (or sales history or best assumptions) to show during busy times you need a certain number of employees and during off peak times you need a different number. Overstaffed means you have excess hours / spend on your payroll. Understaffed means you have reduced revenue, inferior customer experience, or heightened turnover risk.
Do you think you’re understaffed, but you’re not seeing any negative implications on staff, sales, or customers? Guess what … you’re actually just staffed at this location! Share the good news!
How does frontline understaffing impact your business?
If you are seeing negative results like the ones shown above, then you definitely are understaffed. Here’s what is actually happening and how it’s affecting your business:
- Revenue drops during peak / busiest hours: Slower ticket times mean longer lines. In manufacturing it means less product produced. Do you feel this when business is slow? No. Do you feel it when you are packed? Oh, yeah — hundreds of dollars per hour per location are on the line. From a customer’s POV, this is the tipping point where they decide to just go past the long drive-thru line, can’t get the server to order another drink, or leave a store because they can’t find someone to help you find your size. This is a short term revenue impact: fewer sales per hour during your busiest times. In restaurants, understaffing can leave $200 - $1,200 per day on the table per location. Ouch!
- Customer experience impact: You staff your location to provide exceptional service for your customers, right? We want them to have a great experience and come back (often). The more days your customers interact with your understaffed locations, the more risk you take in return guest rates dropping, customers switching locations, or leaving a bad review. This looks like them experiencing long lines, incorrect orders, dirty or disorganized stores, or exposure to overwhelmed staff. This can have both short term and long term revenue impact. Double ouch!
- Employee turnover Spikes: The longer it takes you to hire, the more days your remaining staff needs to pick up extra shifts or work additional stations/locations — you are stretching them thin. What happens when strain / stress and a less than ideal schedule happens? More turnover. Understaffed locations consistently have higher turnover than fully staffed locations. That means the trough you are in just keeps getting deeper.
- Manager time is drained: For a lot of us in frontline hiring, our location managers are our recruiters. Our managers are already superhuman: They manage all operations of the restaurant from sales to staff to customer experience. It’s a BIG job. They are the quarterbacks who optimize revenue and experience. But what happens when their location is understaffed? They need to plug the holes themselves (cleaning tables, taking orders, etc.) and they need to find time to post, interview, hire, and onboard new employees. They are spread thin … and the location is suffering all the while. It’s no surprise understaffing results in a spike in manager turnover, too.
- More “bad hires”: It’s gotten so challenging in frontline hiring, I’ve heard “I’ll hire anyone with a pulse” a lot. Ghosting and candidate drop-off is frustrating and makes the process of hiring feel like it's taking forever. The slower we move to engage or interview an applicant, the more drop off we see. The longer we take to hire, the more compromises we make on who we hire (we just need a pulse!). The problem? Lots of hires who don’t show up on Day One or leave within the first couple weeks. Why is this a bad hire? You likely lost money with this person. You invested a lot of resources to hire and train them — but they never got ramped to bring in the contributions that would offset these costs. Ouch, again!
- Cost per hire increases: Job advertising is expensive. The longer your job sits open, the more you typically need to spend to increase candidates. We also continue to spend from our managers to reach out to candidates to schedule interviews or to screen people who never end up starting. A slow, clunky process has seen and unseen costs.
So, yup, understaffing is bad — and incredibly costly. It is something that should set off a loud, red alarm in your business. If your organization is hiring slowly, it means not only more days of understaffing, but dollars being left on the table for your business in the short term and long term.
This is where exceptional TA and HR leaders are swooping in. They are seeing a business opportunity (and a people one). This is the moment for a seat at the table for TA and HR.
Why does hiring frontline employees faster drive top line and bottom line results?
- Improved customer experience: More days fully staffed means more days of your customers getting the experience you intended. Reduced lines, better service, cleaner spaces, and more accurate order equals higher return guest rates.
- Optimized revenue: A staffed and trained team optimizes productivity. Ticket times are faster more often, more product is made, operations are more accurate (less waste), and more time with customers means possibility to meet further needs (“upsell”).
- Less drop-off and less spend: Hiring faster means moving faster than your competition at every stage. The first to get back to a candidate, schedule for an interview, actually interview, get an offer in their hands and then get them onboarded for Day One. Every step has drop-off if you move slowly — you are losing them to your competition. If you move fast, you have more candidates to select from and can reduce spend on job boards.
- Managers get time back: If they can spend fewer days hiring, they can use that time elsewhere; thinking about the business, resolving customer concerns, and training and supporting staff.
- Better hires: If you can move faster, you will have more candidates to select from. This means more candidates who meet your values and whose schedules match with your needs (note: One of the leading reasons for turnover is employees wanting more hours than an employer can provide). If you have better fit candidates joining fully staffed locations, you should see a decrease in short term turnover. You will naturally see more positive value employees as well. Since it costs less to hire them, their contributions will offset their costs faster (even if they ended up working the same amount of days).
You could be saving nearly $9,000 per hire.
Why does all of this matter? Let’s say understaffing costs your organization $500 per day in revenue (roughly 25-30 fewer transactions per day in quick serve restaurants). If it takes you 21 days to hire someone new to staff that location (the industry average), you’ve just lost $10,500 in revenue. Now multiply that by every understaffed location — the lost revenue stacks up quickly, and it’s all because you couldn’t hire faster.
But what if you could hire someone in just three days? Do the math: You would recoup 18 days of productivity… that’s $9,000 per hire! Do you think your C-suite would be interested in the technology that can actualize that? Yes, yes they will.
Time to hire isn’t just a talent acquisition metric. For organizations with frontline hiring, it’s now a key business metric — one that technology is finally well positioned to address at scale. At this juncture, 24/7 automation is the best way to keep up. And the kicker is: candidates actually prefer it, too.
Removing any waiting, lag times, or friction for candidates makes their experience feel instant, while the automation allows teams to have better results with less work and less spend. No more “ouch.”
More like: win, win, win.