Recruiting Costs Are Up: New Survey Gathers Data from Nearly 4,000 Organizations and 800 Job Seekers

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The largest and most comprehensive survey of recruiting practices, in its seventh annual report, indicates that organizations are spending more to recruit the candidates they want but are getting less for their recruiting dollar. It also indicates that nearly 70% of job seekers are dissatisfied with the recruiting process and it’s starting to affect the organizations they work for.

Based on what continues to be the most comprehensive staffing performance survey in HR, recruiting costs have increased, efficiency has decreased and New Hire Quality measurement has climbed from 2% of participating organizations to 40%. These are just some of the findings reported by Staffing.org, which has just released its annual Recruiting Metrics and Performance Benchmark Report.

The new report contains data from almost 4,000 organizations, over 800 job seekers and 400 employees. Staffing.org is a leading source of information, metrics, processes, practices, tools and resources to measurably optimize the performance of people and work.

In its first report seven years ago, over 90% of organizations surveyed insisted that New Hire Quality was critical, yet less than 2% of them were making any attempt to measure it. This year, quality remains the top priority but now 40% of organizations are measuring it.

Only eight of the 27 industries analyzed spent more on internal recruiting expenses (operating expenses such as staff compensation) than on external recruiting expenses (primarily sourcing, such as job boards and agency fees). Increases in external expenditures are also outpacing increases in internal expenditures.

The average efficiency for all industries -- 84.2% -- has dropped 3.4 percentage points from last year and 1.7 percentage points from 2000. Pharmaceuticals and biotechnology continue to be the least efficient industry at 77.2% (a 1.4 percentage point drop from 2004). The energy sector, which has a Recruiting Efficiency of 91.7%, had the best efficiency.

Although there are indications that some recruiting practices and structures may foster better performance than others, the data indicates there is no single best way to recruit. There is no correlation between organizational structure, insourced or outsourced operations and a higher efficiency. Staffing.org expects that to change as organizations monitor their performance more closely.

“You can’t take the recruiter out of recruiting. The lack of direct communications is turning off candidates,” explained Nick Burkholder, founder of Staffing.org. “The single greatest improvement opportunity area for organizations is candidate communications. This has given second tier organizations the opportunity to out-recruit top tier organizations and they’re taking advantage of it.”

While a majority of employees are dissatisfied with immediate management, that is not a primary reason for changing employers, Burkholder adds. Rather, professional development is the biggest driver for employees looking to change employers.

About Staffing.org

Staffing.org was initiated in 1990 by the then CFO of the Johnson & Johnson Family of Companies. Headquartered in Willow Grove, Pennsylvania, it has operated since 1998 as an independent nonproprietary corporation. Nick Burkholder, founder of Staffing.org, is an authority on global workforce design and structure. His books include On Staffing and Outsourcing, the Definitive View, Applications and Implications, just published by John Wiley & Sons.

Inquires concerning the report may be directed to Tal Roth, telephone 215.431.0058.

This press release was distributed through eMediawire by Human Resources Marketer (HR Marketer: http://www.HRmarketer.com) on behalf of the company listed above.

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Alissa Stanley
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