How many candidates should you interview to hire a software engineer?
The Karat Team
We’re just a couple of months away from what is shaping up to be the busiest fall hiring season in decades. Engineering leaders are finalizing their headcount plans. Recruiters are filling their candidate pipelines. Talent acquisition operations leaders are doing the math to determine how many engineering candidates they need to source to meet hiring targets.
Karat took a look at the three biggest markets for technical hiring–San Francisco, New York, and Seattle–to help identify how many engineering candidates it takes to fill an open role.
How did we determine the number of software engineers you need to interview to make a single hire?
To calculate how many engineering candidates are needed in each tech hub, we considered four variables:
- Candidate quality — what percentage of software engineers in this market pass the average company’s tech screen?
- Onsite-to-offer ratio — how many candidates are brought onsite for each offer?
- Close rates — what percent of software engineers accept their offers?
- Candidate dropout — how likely are software engineers to drop out at any stage of the process?
Note: this analysis focuses on industry-level software engineers (i.e. no interns or new grads).
Last year we featured some research looking at remote hiring hotspots outside of the major tech hubs, but across the top-3 markets, the concentration of quality software engineering candidates is pretty similar.
The percentage of engineers in the San Francisco Bay Area who pass a standard tech screen is only marginally better than New York or Seattle, all of which are well ahead of the national average.
As a result, it takes fewer candidates at the top of the recruiting funnel to get to the onsite interview stage (or “final” interview stage for companies who are all-remote).
This ratio tends to vary more by company than by geography. We calculated offer ratios based on the average market bar. This input assumes an onsite to offer ratio of 3:1.
Close rate: how many candidates accept offers?
Seattle is the most competitive market for candidates receiving offers. In fact, only 40% of candidates accept offers in the Emerald City. This is slightly lower than the San Francisco Bay Area average of 44%, and well behind close rates in New York (56%), and the rest of the country. (Or well ahead if you’re a Seattle engineer currently enjoying the negotiating leverage of multiple offers, but I digress).
Candidate dropout rates are fairly uniform across all the leading tech hubs — 12-13% of engineers dropout of the process in each market. This is significantly higher than dropout rates in non-tech hubs of 8%, which is likely due to the intense competition for developers in those three cities (and another reason to consider remote hiring).
How many candidates do you need to fill a software engineering role?
Multiplying out all these variables, we can get to a candidate per hire ratio.
As you can see, when controlling for the hiring bar — Seattle is currently the most challenging market for employers hiring software engineers. Engineering leaders in Seattle need to screen nearly 6 more software engineers per hire than in New York.
This is driven by above-average dropout and low close rates. New York on the other hand is significantly less competitive for hiring managers due to higher close rates and comparable candidate quality.
How can talent acquisition and engineering leaders take action using this data?
If you need to hire amazing world-class software engineers, New York may be the most efficient market to do that in. If you’re exploring fully remote models, you might be able to capitalize on the high close rates in secondary markets — especially those with above-average quality.
It’s also worth noting that interview quality and consistency plays a huge role in creating an efficient hiring pipeline. The above numbers are based on Karat interview data, but standard market data for companies conducting in-house tech screens is even higher. Based on a recent survey of more than 300 engineering leaders, the national average was nearly 21 candidates per software engineering hire. This number is significantly higher than the Karat average because every false positive or false negative in your technical interview process adds another candidate to the pipeline.
Many factors go into your candidate per hire ratio, and we see that the leading tech brands can maintain a low cost per hire even in the most competitive cities. If you want to learn more about how Karat helps our partners efficiently hire 1,000s of software engineers per year, reach out here.
What else do you think differentiates hiring in these cities? If you’re a new founder, where would you start your office — or would you even have an office? Tell us in the comments below!
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